Per capita annual spending on food in the US was $4,575 in 2014, the latest year for which figures are readily available. (1)
If you’re one of the unfortunate 10% of Americans with an income of less than $10,000 per year, food becomes a huge part of your budget. The Food Stamp program makes a difference for these people. With an average monthly amount per person of $126, it can offset perhaps 25% of what a careful shopper spends on food, and for the very poor, make a difference between eating and not eating.
The amount allotted to food stamps by the Federal Government has been cut each year starting with 2013. The Trump administration is now proposing a further 31% reduction in this benefit. Meanwhile, food prices are rising by between 1 and 2 percent per year.
The benefit cut is going to hurt the poor. However, it’s also going to bite some Trump supporters. The four largest grocery chains (Wal-Mart, Target, Kroger and Aldi) can all expect to see revenue reductions of over $1 billion from these cuts.
Wal-Mart itself receives 18% of the money allocated to food stamps, and so will be the biggest loser from these cuts.(2)
These cuts will impact profits, stock prices and shareholders.
If you still have Wal-Mart stock after all the negative news in retail, it’s time to reconsider.
- USDA, “FoodExpenditures_table1.xls” https://www.ers.usda.gov/data-products/food-expenditures.aspx
- Courtney Reagan, “Retail stands to lose $70 billion over 10 years if food stamp benefits are slashed, and here’s who gets hit the most,” CNBC, 29 June 2017. http://www.cnbc.com/2017/06/29/retailers-that-take-the-hardest-hit-if-food-stamp-benefits-are-cut.html
- Center on Budget and Policy Priorities, “A Quick Guide to SNAP Eligibility and Benefits,” 30 September 2016. http://www.cbpp.org/research/a-quick-guide-to-snap-eligibility-and-benefits
- Trading Economics, “United States Food Inflation, 1914 to 2017,” undated. https://tradingeconomics.com/united-states/food-inflation