Initial Announcement

  • For the millions of struggling Americans, the 2.7 million New York recipients of SNAP, there was a positive development in April 2019, that grocery chains like Walmart, Shoprite and Amazon are offering the Food Stamp recipients to avail the online shopping facility.
  • It is the first time that the US Department of Agriculture has given go-ahead to the beneficiaries of Food Stamp program to use their benefits to buy groceries online and to get them delivered to their addresses. This service facility is initially piloted in the State of New York through a two years project. Starting with New York City, different stores will offer this service to the whole state. After the successful implementation of the test, it will expand to other neighboring states of Alabama, Iowa, Maryland, Nebraska, New Jersey, Oregon, and Washington in the coming years, according to USDA. The online stores like FreshDirect, Safeway, Hy-Vee and Dash’s Market are also expected to join this pilot project in New York City.
  • According to the statement of the UDSA, it plans more than 38 million Food Stamp recipients nationwide to have the access to online purchases, making the lives of some working moms, as well as the elderly and disabled, to buy food without taking the pain to go to supermarkets. The move also opens up the new market to online retailers, as there is only a small portion of grocery purchases made online and this is expected to grow.
  • As per statistics of the U.S. Department of Agriculture, about 20% of SNAP participants are either elderly or disabled and face challenges getting healthy food from grocery stores.

Other Options For Home Delivery

There are some websites that offer home delivery of the online shopped groceries in certain localities of specific states, they include;

Schwann’s – The website does not point out the locations of their service. Instructions: “Place your order online and choose “deliver to my door.” When your Route Sales Representative delivers your order, you need to present your Electronic Benefits Transfer (EBT) card to him or her. EBT is only available for home delivery orders. You cannot place a mail order and pay via EBT.”

  • Fresh Direct – for Bronx, New York.
  • Shoprite – Select locations in MD, NJ, and NY. (Locations only. Not the entire state.)
  • Fresh Madison Market – Madison, Wisconsin and surrounding area.
  • Safeway & Albertsons – Arizona only. For individuals with disabilities only using EBT benefits and needs to use Safeway’s home grocery delivery service because of disability, please call 1-877-505-4040 or email us at deliverysupport@safeway.com”

Food Stamp Market Impact

 

  • Food Stamp market is worth $65 billion and has the potential to give a boost to these retailers when the majority of beneficiaries start shopping online. According to the recent figures, in 2017, $52 billion (around 82%) of this amount was spent at these retailers.
  • The data shows that 4% of Walmart’s total sales in the US come from food item purchases. The SNAP recipients are already an important part for many grocery stores and chains as a lot of money is pumped into the food storage system. For example, during the Government shut down in February, Food Stamp benefits were handed over early that significantly increased the sales in a number of leading grocery chains.
  • At the same time, the convenience stores are gaining over big-box retailers like Walmart, as they are rapidly opening new branches with an extended variety of grocery selection. It is expected that the new online service will help stores like Walmart and Amazon to compete rather take a share of the grocery market from these convenience stores as they do not offer delivery.

The Preparatory Effort 

  • The online shopping program has been in the planning since 2014 when Farm Bill called for USDA to test it. It is in the furtherance of the same that the recent announcement of the pilot is made. Using food stamp for online purchasing of groceries needs a high level of security to prevent misuse, as food stamps only cover permitted food items and not the delivery charges. It is for this reason that Amazon is waving its Prime Membership fee for food stamp customers in the New York pilot project.
  • Both Amazon has spent the last two years getting ready for the commencement of the USDA pilot. It had to build technology to accept food stamp customers’ payments and create new web features for shoppers using the program.

Delivery Barriers

Buying groceries online could appeal to food stamp recipients who live in urban and rural areas with no nearby grocery store or for those customers who don’t have transportation to get to grocery stores.

At the same time retailers will have to rise above several obstructions before they enter this market, namely:

  • The delivery of perishable food items is a big obstacle and online grocery stores are already struggling with it.
  • Finding a secure drop off spots for the grocery items.
  • Absence of internet access in some areas can also potentially hinder many food stamp customers in such areas from ordering their groceries.

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