SNAP Restrictions May Cost $1.6b for Retailers To Implement: Report

The significant cost and operational hurdles that food retailers face with new and proposed SNAP regulations are largely coming from the shift to give states more control over what SNAP consumers can purchase with their benefits card, FMI said in a statement.

“[P]roposed restrictions represent significant new costs and operational challenges,” the three trade groups said in a joint statement. “Without clear guidance and adequate time, these well-intended changes will create unexpected difficulties of both retailers and the customers they serve.”

Main cost drivers for food retailers include technology updates, software and point-of-sale system upgrades, as well as more labor to help meet new stocking, replenishment and labeling requirements.

The impact analysis report’s $1.6 billion estimate for upfront costs is an amount equal to 1.9% of 2024 net income for all food retailers. The report comes at a time when an increasing number of states are requesting and receiving approval from the USDA to set state-level restrictions on what kinds of foods consumers can spend their SNAP benefits on. So far, 12 states have been granted waivers.