Over 40 million Americans depend on the Supplemental Nutrition Assistance Program (SNAP) for food assistance. Recent legislation, a new administration, and the expected renewal of the Farm Act could all impact SNAP spending in the year ahead.
Spending by SNAP households accounts for about a quarter of consumer goods spending in the US, according to Numerator. Understanding current trends and potential shifts in that spending is crucial for retailers aiming to serve this demographic effectively.
Key trends impacting SNAP spending in 2025
Declining SNAP spending
After peaking at $113.9 billion in the fiscal year (FY) 2022, SNAP spending dropped to $106.9 billion in FY 2023. This reduction is primarily due to the expiration of emergency allotments that temporarily boosted benefits during the pandemic. With the renewal of the Farm Bill anticipated in 2025 and federal policy potentially in flux, the decline in SNAP funding is likely to continue.
Changing eligibility requirements
Recent modifications to SNAP eligibility may impact who qualifies for benefits and decrease overall participation. The Fiscal Responsibility Act of 2023 increased the working age requirement from 49 to 54 years old and decreased available state exemptions from 12% to 8%, both of which are expected to decrease overall SNAP participation. There is also uncertainty about proposed changes in product eligibility from policy changes at the state and federal level.
Shifting consumer behavior
As SNAP recipients face rising food prices, many beneficiaries are buying less from stores, 12% on average according to Numerator. They are also buying differently with many downtrading to less expensive products like own brand.
6 ways retailers can better serve SNAP customers and capture sales
1. Offer discounts on delivery and online memberships
As the popularity of online grocery shopping continues to rise, retailers that provide financial incentives for using delivery services can make shopping easier for SNAP recipients.
2. Upgrade point of sale (POS) devices to accept SNAP EBT chip cards
Enhancing payment security is a priority for many SNAP recipients. Implementing secure payment technologies can build trust and foster a safer shopping environment. Retailers can refer to the USDA’s SNAP EBT Modernization guide to get started.
3. Integrate Buy Now Pay Later (BNPL) payment plans
SNAP recipients may experience fluctuations in their benefits due to changes in eligibility, income, or household composition. By integrating BNPL options into customer digital wallets that track SNAP EBT trends, retailers can provide a safety net for these customers and retain their loyalty.
4. Optimize merchandising and forecasting using advanced analytics
Retailers can leverage advanced analytics to account for the dynamics of the SNAP program and its impact on consumer behavior, including identifying peak shopping periods that align with benefit allocations and shifts in customer purchasing patterns such as pack sizes purchased or product preferences.
5. Create SNAP personalized customer packages
About 9% of all SNAP and P-EBT benefits were redeemed online by the end of FY 2023. Retailers can further invest in personalized recommendations, offers, and greetings, such as curating existing offers and utilizing generative artificial intelligence (AI) capabilities, to increase customer loyalty and create SNAP personalized customer packages.
6. Strategically place in-store displays
With potential changes to SNAP-eligible food items and a focus on healthy food choices, grocers have an opportunity to reimagine displays and merchandising such as placement of SNAP-related displays in high-traffic areas like checkout lanes and near popular SNAP food items.
As SNAP continues to evolve, retailers who proactively implement these strategies will not only support their communities but also position themselves for success in a changing marketplace.