Grocers do the math on food stamp cuts

A sign in a market window advertises the acceptance of food stamps in New York City.

Outside the Rightway Food Express in Baltimore a big sign reads “we accept food stamps.” Manager Erick Perez estimates about 40 percent of the store’s revenue comes from the program.

Starting today, his customers will have less to spend every month. A temporary increase in benefits leftover from federal economic stimulus efforts in 2009 expires today, reducing aid for more than 47 million people. For a family of four, that means living on about $36 less per month.

Perez takes out a pencil and, on a door in a back room, multiplies that by 100 customers. That’s $3,600 less that those families can spend. For a store like his, it adds up quickly.

“It’s going to impact everybody,” Perez says. “I know it’s a hard time right now, but it’s going to be hard.”

Small grocers aren’t the only ones doing the math. Larger chains like Wal-Mart are bracing for the change. In a conference call with analysts last week, Michigan-based Spartan Stores warned that the cuts could be “meaningful” to the company’s business.

And grocers aren’t the only businesses that might feel a pinch. Low-income families will face even tougher choices about their spending, says Stacy Dean with the nonprofit Center on Budget and Policy Priorities.

“Do I pay the light bill, or do I buy milk for my kids?” she says. “I think that means that it won’t just play out as being an impact on retailers, but any number of the other kinds of businesses that low-income families frequent.”

Rightway customer Nicey Ross says the reduced benefits will make it harder for her to feed her family of five. “Why take them away when I really need food stamps to buy food?” she says.

The increase in benefits, part of the 2009 American Recovery and Reinvestment Act, was meant to be a temporary boost for families struggling in the recession. Asked if the economy has improved since then, Ross says “no.”

Congress is weighing even bigger cuts to the food stamp program.  A version of the Farm Bill passed by the House would cut benefits by nearly $40 billion over 10 years.

About the author

Amy Scott is Marketplace’s education correspondent covering the K-12 and higher education beats, as well as general business and economic stories.

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