For retailers with an e-commerce grocery service, a new market is emerging.
For the first time, Supplemental Nutrition Assistance Program (SNAP) participants will be able to select and pay for their groceries online, during a two-year pilot just launched in New York State.
Amazon and Walmart are participating in the initial pilot launch with ShopRite set to join this week. Additional retailers are slated to participate in the pilot in coming months.
The change could open up a huge market for retailers if it moves past the pilot stage. SNAP accounts for about 10% of the food that U.S. families buy for their homes, according to the Center on Budget and Policy Priorities. Participants spent $63 billion in SNAP benefits for food purchases, supporting retailers of every size, in fiscal year 2017.
The pilot will test both online ordering and payment, but New York state’s 2.7 million SNAP recipients won’t be able to use their benefits to pay for service or delivery charges.
Additionally, the pilot system only allows online purchasing by SNAP households with electronic benefit transfer (EBT) cards issued by New York to start and online retailers will be limited to delivery in the pilot areas in New York only.
Lessons learned from this pilot are expected to inform future efforts to expand online purchasing in SNAP.
“People who receive SNAP benefits should have the opportunity to shop for food the same way more and more Americans shop for food – by ordering and paying for groceries online,” U.S. Secretary of Agriculture Sonny Perdue said. “As technology advances, it is important for SNAP to advance too, so we can ensure the same shopping options are available for both non-SNAP and SNAP recipients. We look forward to monitoring how these pilots increase food access and customer service to those we serve, specifically those who may experience challenges in visiting brick and mortar stores.”
For the pilot, ShopRite and Amazon are providing service to the New York City area and Walmart is providing online service in upstate New York locations.
Dash’s Market, FreshDirect, Hy-Vee, Safeway, Wright’s Markets are slated to come onboard in the coming months, as the pilot will eventually expand to other areas of New York as well as Alabama, Iowa, Maryland, Nebraska, New Jersey, Oregon and Washington. The current pilot retailers went through a Request for Volunteers (RFV) selection process in late 2016 and were selected in 2017.
The 2014 Farm Bill authorized the U.S. Department of Agriculture (USDA) to conduct and evaluate a pilot for online purchasing prior to national implementation. The pilot phase is intended to ensure online transactions are processed safely and securely. USDA anticipates all eligible and interested retailers who can meet the requirements to process online SNAP transactions will eventually be able to take part, though the timeline is dependent on the progress of the pilot and any regulations which may need to be issued.