B2B | Shopper Connection | October/November 2010
Grow categories in a SNAP
The addition of 3 million United States households to the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps) in October raises the number of eligible households to 18 million and creates new promotional and merchandising opportunities with the early-in-the-month dollar flow.
Majority of eligible families receive their federal funds on electronic cards within the first two weeks of the month, depending on the state in which they live. Therefore, retailers can attract more of these price-sensitive families when they promote deep values on food and beverage staples when shoppers have the resources to stock up.
Timing is key because the money surge can be significant. Depending on income, a household of four can receive $668 per month1, said Tim Miller, senior director-shopper insights, ConAgra Foods, noting that most recipients are inner city or rural residents. Collectively, SNAP funds account for an estimated 15%-17% of all retail food and beverage sales.2
While point-of-sale systems restrict the use of funds for alcohol, nonfoods products, or ready-to-eat foods, the vast majority of center-store can be bought. “Despite the SNAP name, cash registers don’t enforce nutritional-only purchases, so nutritional education is an important part of the program.” he added.
Miller said “These shoppers are intent on saving money, and they know value because they compare circulars and stores, and teach these skills to their children. They definitely prefer brands they trust because they can’t afford to buy foods that might go to waste, and they don’t want to be forced into buying products they currently don’t buy.”
Practical tips for retailers:
- Know the items these shoppers index high on, and make sure they’re available and merchandised at the right time of the month in each market. Some examples: shelf-stable prepared pasta, dry dinner mixes, shelf-stable single-serve puddings, economy frozen single-serve meals, and toaster pastries.
- Add extra displays when running temporary price promotions.
- Include “free” and “buy one get one” offers, which they prefer. Also, share ideas on how to stretch food dollars, and visually depict different meals that can be made with, say, a pound of ground beef.
1 USDA.gov (FY2011 Allotments & Deduction Information / 48 contiguous U.S. states)
2 IRI S3 Data
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SNAP Shoppers Spend More in Early Part of Month
Retailers can capture SNAP shoppers at the beginning of the month, by doing the following:
- Move food category events that index high to
SNAP households - Utilize in-store displays to ensure in-stock levels
- Adjust inventory levels on key categories and brands to address increased consumer needs
*Supplemental Nutritional Assistance Program
Source: Government Assistance/Food Stamps In-Depths Fusion 4/10, Retailer SNAP tender data
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