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USDA Tests Food Stamps with Online Grocery

Image via Flickr Usdagov

The United States Department of Agriculture (USDA) is responsible for administering the Supplemental Nutrition Assistance Program (SNAP) for families in the U.S. who don’t have the resources to buy sufficient groceries. The program is getting an upgrade in 2017 with the introduction of online grocery shopping. Starting in the summer of 2017, some program participants will be able to use SNAP to purchase groceries from online. Online grocery shopping is a growing trend in the U.S., and the updated SNAP program could put even more pressure on retailers from a logistics standpoint.

USDA Tests Online Grocery Shopping With SNAP

In 2016, the USDA asked for volunteers to participate in the pilot program for purchasing groceries online with SNAP. Seven grocery retailers in seven states were selected. The group consists of both large and small retailers, allowing researchers to test a variety of settings. The test will happen over a two-year period and will start in summer 2017.

The following is a list of participants in the pilot program:

  • Amazon.com (Maryland, New Jersey, and New York)
  • FreshDirect (New York)
  • Safeway (Maryland, Oregon, and Washington)
  • ShopRite (Maryland, New Jersey, and Pennsylvania)
  • Hy-Vee (Iowa)
  • Hart’s Local Grocers (New York)
  • Dash’s Market (New York)

Joe Dash, owner of Dash’s Market said, “We’re now able to serve a segment of the population who we currently can’t get to and can’t get to us … Whether they’re low-income families, mobility-impaired, or without transportation, we’re now able to improve healthy food access to those community members who need it most.”

Make Healthy Food Available Through Normal Channels of Trade

The Food Stamp Act of 1964 clearly states that families who participate in the program should be able to do so through “normal channels of trade.” Online grocery shopping has become a normal channel, which is why the USDA wanted to test it out for SNAP recipients. The program doesn’t pay for delivery charges, but it does allow participants to purchase all of the food they would normally get from a trip to the grocery store through their EBT food cards.

The pilot program test will look at both payment and online ordering to make sure there are no technical or security challenges. More than 43 million people with low income use EBT food cards, and testing is necessary to ensure that people get their monthly benefits without issues in the future.

Grocers Need to Prepare to Fulfill More Online Grocery Orders

SNAP recipients welcome the addition of online grocery shopping to the USDA’s program because of the convenience it offers and the added flexibility to their grocery shopping routine. However, grocery retailers will need to prepare for an influx of new online grocery shoppers. This could put strain on supply chains, particularly for delivery service, where refrigeration is necessary.

While the trend for online grocery shopping has risen steadily over the past few years, many consumers still prefer to do their grocery shopping in person. The updated SNAP program could push a new group of online shoppers to try it out. Retailers will need to prepare to handle the new demand.

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