SNAP reduction could hurt sales of food retailers, store brands

Food retailers and their store brands will take a hit if the Trump administration’s budget call for a $191 billion cut to the Supplemental Nutrition Assistance Program (SNAP), commonly referred to as the food stamp program, comes to fruition.

According to a CNBC report, Wal-Mart will take the biggest hit, losing $12.7 billion in U.S. sales over the next decade. Target could take a $5 billion hit from 2018 through 2028.

Deep-discounter Aldi, with an assortment of products that are 90 percent private brands, could lose between $4.4 billion and $4.9 billion.

The Kroger Co., the nation’s largest grocery chain, could lose between $3.6 billion to $3.9 billion in sales hit if the proposed SNAP reductions go through.

Diana Sheehan, a grocery analyst and director of retail insights for Kantar Retail, told CNBC that food spending “is not discretionary, it’s necessary,” and that consumers would have to change their budgets. “So, you reallocate budget dollars to spend on food if you have to,” she said.

The Congressional Budget Office said the average food stamp benefit is $252 per month. If the Trump administration's SNAP budget proposal passes, the monthly amount will fall by 31 percent to an average $173 a month.