Independent Grocers Urge White House to Bag 'Harvest Box' SNAP Proposal

After numerous retailers and partner associations spoke out against President Donald Trump's SNAP proposal following its announcement last month, the National Grocers Association (NGA) is taking initiative.

The NGA has sent a letter on behalf of the independent supermarket industry to Capitol Hill urging opposition to the White House's “harvest box” proposal, which aims to replace 40% of SNAP benefits that are currently redeemable at grocery stores and other eligible retailers with a government-funded food delivery box that would include only nonperishable items.  

The letter—which calls the proposal a “major step backward” that could potentially exacerbate both nutritional food access and the food desert problem as supermarkets would struggle to survive in underserved communities—was signed by nearly 900 independent grocers from all 50 states, and illustrates what Greg Ferrara, NGA's EVP of advocacy, public relations and member services, called “extreme concern” following the initial announcement.

Those who signed the letter believe that “putting the government in charge of nutrition benefit distribution fails to appreciate the free-market, competitive efficiencies achieved through the successful public-private SNAP partnership. History demonstrates that when the government doles out food, not only is it inefficient and more expensive to the taxpayer, but low-income populations also end up hungry and malnourished.”

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The letter also details negative impacts on the “ancillary economic activity in many communities where the local economy is heavily reliant on the success of Main Street supermarkets. Fierce competition among food retailers, which operate on less than 2% net profit margins, drives consumer prices down and ultimately benefits those on a tight budget. Without competitive forces involved in the market for food, there is little doubt that such a proposal would increase food insecurity.”

Instead of pursuing what the letter calls “radical changes," NGA suggests that Congress build on its successes and work with food retailers to address their current challenges. Food access programs such as the Food Insecurity Nutrition Incentive program and the Healthy Food Financing Initiative have “increased purchases of nutritious and healthful foods and helped supermarkets expand to underserved areas that lack access to quality food products.”

In a recent message to IGA’s U.S. retailers regarding the proposed changes to the SNAP program, John Ross, president and CEO of IGA Inc., said that from the perspective of a retailer, the proposal prompts “all kinds of questions,” the foremost being: “How does the federal gov think it can ship food directly into consumers’ homes cheaper and more efficiently than we can deploy it in this mature ecosystem that we know as the wholesale-to-retail grocery industry?”

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In fact, Ross said, “The costs to deliver food directly to a consumers’ home vs. the cost to deliver to your local grocery store may turn out to be as much as three to four times greater,” which he said is self-evident in the pricing models of established direct-to-home delivery systems. As an example of the potential impact of costs to taxpayers, Ross cited how grocers can sell two dozen eggs in-store far cheaper than the cost of shipping a single egg to a consumers’ home.

“As for impact on local retailers,” Ross said, “if you were to pull half or more of the subsidies out of local grocery stores and pull it into some sort of food delivery system, essentially what the government is doing is disintermediating the local retailer.” Moreover, the proposal’s impact on many IGA-member stores, who Ross said serve between 20% and 40% of federal subsidy shoppers, "could be devastating, and many might not survive. And the ones that did would have to shave services and cut costs.

“We live in a world today of increasing complexity,” said Ross, noting that the proposal represents a classic case of a not broke, don’t fix it scenario by challenging “the world's most efficient delivery system—from production to warehouse to store. We in the U.S. are able to deliver fresh and healthy products directly to a local grocery store in a way that rivals any independent distribution system of any kind.”

Ross tossed out another rhetorical question: “Imagine trying to unbundle that network and replicate it using federal resources—it just seems ridiculous. Not only will it make it more difficult for poor families to get fresh healthy food for their families, but it will also put an entire ecosystem at risk”—particularly the two- and three-store operators that have been owned and operated by families for 50 to 100 years, which he says would not be a stretch to see them “disappear tomorrow. The impact on our industry could be billions of dollars.”

Noting strength in numbers and “retailers’ very strong voice,” including local independents, Ross said it’s crucial that the industry “gather those voices together and make our views known” at the upcoming Washington, D.C., rally on April 10-11, “to have a dialogue about programs like SNAP. It's important that we bring our voice forward in a bold and loud way.”