Leveling the SNAP Online Purchasing Playing Field for Independent Grocers

September 11, 2020

By Molly Pfaffenroth, Director of Government Relations

With Americans sheltering in place during the coronavirus pandemic, online shopping has been consumers’ saving grace. And while grocers, deemed essential providers during the crisis, have not been squeezed as much as other merchants, e-commerce has allowed food sellers to give consumers seeking to limit contact outside their homes some additional peace of mind.

Independent grocers, in particular, were prepared for this dramatic shift in consumer need. Twice as many independent supermarkets started offering online shopping in 2020 than did so a year earlier, according to the 2020 edition of the Independent Grocers Financial Survey, a joint study between the National Grocers Association (NGA) and FMS Solutions.

Since the beginning of the COVID-19 pandemic, independent grocers have been working diligently to serve their customers and feed their communities in the most efficient and effective ways possible. Many consumers have also shifted their shopping habits and have been ordering their groceries online with delivery or curbside pickup options. But still, a significant segment of the consumer population remains underserved, particularly those in need, as household acceptance of e-commerce blossoms.

The U.S. Department of Agriculture’s Food and Nutrition Service (USDA FNS) has recognized the need for individuals qualifying for Supplemental Nutrition Assistance Program (SNAP) to have the option to use their benefits to order groceries online on retailers’ websites, an option that was only accessible via four retailers, including two independent grocers, in eight states before the pandemic struck. Beginning in March, FNS quickly expanded its limited SNAP Online Purchasing Pilot to 47 states.

Although the pilot is now operating essentially nationwide, store options are still very limited for SNAP customers to use their benefits online. Specifically, for many SNAP participants, the only options to apply their benefits online are Amazon and Walmart. Yet, according to USDA Economic Research Service (ERS), independent grocers play an important role in helping to ensure food access for consumers, particularly in low-income and rural areas. A USDA ERS study found that independent grocers outnumber chain grocery stores in remote rural areas and operate at higher rates in counties with a large share of Black and Hispanic citizens.

Dozens of independent grocers are interested in offering this service to their customers, and many have applied to FNS to participate, but no additional grocers other than the pilot retailers have yet launched SNAP Online Purchasing during the pandemic due to burdensome requirements and several barriers that are uniquely faced by small retailers. These barriers include technical challenges, a testing process that must be performed with each individual store location, financial constraints to launch and continuously operate the program, and a lengthy application and approval process.

NGA has been serving as a critical partner in helping independent grocers maneuver the application process, while also actively lobbying Congress and the administration to create a level playing field for independent grocers in SNAP Online Purchasing. Given the studies that show that independents are more attuned to the needs of the community and offer lower prices for certain products, NGA is urging the government to launch more independent retailers as soon as possible so grocers can best serve their customers according to their needs and help fight food insecurity during this critical time of the COVID-19 pandemic.

NGA is supportive of S. 4202 and H.R. 7535, the Expanding SNAP Options Act, legislation introduced by Sens. Dick Durbin (D-IL) and Tammy Duckworth (D-IL) and Rep. Robin Kelly (D-IL), to make it more technically and financially feasible for independent grocers to participate in SNAP Online Purchasing. NGA also this week hosted a virtual meeting with FNS Administrator Pam Miller and approximately 25 independent grocers and e-commerce representatives to discuss the barriers and challenges small retailers face when working through the SNAP Online Purchasing application and testing process.

NGA commends FNS for its robust efforts to expand the program throughout the pandemic. We look forward to continuing our work together with USDA to expand the SNAP Online Purchasing program to more independent grocers so that they can help to feed Americans when they need it most.