Why SNAP Shopper Spend Deserves More Attention From Retailers

As of December 2020, 13% of the U.S. population was participating in the federal Supplemental Nutrition Assistance Program (SNAP). That share is up 20% from 2019, representing 43 million individuals across more than 20 million households, according to the U.S. Department of Agriculture.

Throughout 2020, states and individual grocery retailers sought to expand access to online grocery ordering for SNAP participants. Stores certified to accept SNAP benefits online let customers input a SNAP personal identification number and use their benefits to purchase eligible items.  

But because the certification process itself can be time-consuming for retailers—especially smaller and independent grocers—and because SNAP participants are lower-income consumers, many retailers haven't put significant effort behind making their stores truly more accessible for SNAP recipients, especially online, according to Chicago-based research firm IRI.

That's a mistake, IRI asserts, especially as the share of the population participating in SNAP is expected to remain elevated through 2021. SNAP shoppers are more likely to live in larger households—19% live in households with five or more people, according to a recently released IRI report on SNAP consumers. Further, IRI's Jonna Parker noted in a presentation this month with FMI—The Food Industry Association, many SNAP shoppers lack childcare, making trips to the grocery store riskier and more challenging during the pandemic.

Unemployment has fallen from a pandemic high of 14.8% in April 2020 to 6.2% in March 2021. However, the government's unemployment figures exclude those who have dropped out of the labor force and haven't recently looked for work—a sizable group that includes parents, especially in single-income households, who have left the labor force to care for children while schools and child care providers have had their doors shut. 

Where retailers have stepped up to offer the opportunity to use SNAP benefits online, SNAP shoppers have responded: In December, 14.2% of SNAP households said they had purchased groceries online, ahead of the 13% of U.S. consumers overall who had, IRI reported.

In addition, online baskets for SNAP households are larger than those for non-SNAP shoppers, IRI noted: $295 per buyer for SNAP shoppers vs. $163 per buyer for non-SNAP shoppers in the second half of 2020. Overall, SNAP households accounted for $74 billion in grocery spending (minus produce, bakery and deli) in 2020, or 12% of total food and beverage spend. 

There is opportunity for retailers to gain the trust and repeat business of SNAP, participants by making it easier for SNAP shoppers to find affordable, family-feeding meal solutions online, according to IRI. Offering recipes built on SNAP-eligible ingredients—and making these visible and easy to access online, with recipe-to-basket functionality—can provide compelling value for SNAP shoppers, IRI suggested. Dollar retailers currently do a better job with this than larger supermarket chains, IRI suggested.

Private-label products account for 17% of SNAP shopper dollar spend, similar to the 18% among non-SNAP shoppers. However, 21% of SNAP participants' grocery spend is on snacking occasions, and here, SNAP shoppers gravitate toward national brands, according to IRI. Orienting promotions around the type of products that SNAP consumers want to buy for the occasions they're buying for (national brands for snacks, private labels more so for meal preparation) will help offers resonate better with SNAP shoppers, IRI suggested.