Gone in a Snap?

Snap! Just like that, a significant number of convenience stores could be wiped out of the federal Supplemental Nutrition Assistance Program (SNAP), meaning drastic drops in their grocery category sales, if new eligibility standards are enacted. SNAP, known in its earlier days as the food stamp program, provides nutrition assistance to low-income individuals and families.

“Problematic” is what NACS, the Association for Convenience & Fuel Retailing, has called the proposed retailer eligibility standards, which were published in February in the Federal Register by the U.S. Department of Agriculture’s Food and Nutrition Service (FNS). Problematic because the proposed rules “went well beyond the intent of Congress in the 2014 Farm Bill,” according to Anna Ready, director of government relations for NACS, and would result in significant negative, unintended consequences for c-stores and many SNAP beneficiaries.

“In fact, if enacted as drafted, our survey data shows that this rule would wipe ou tens of thousands of c-stores — a very significant amount of the over 106,000 stores currently in the program,” Ready told Convenience Store News.

And that clearly was not the intent or the expectation, as the industry sees it.

FNS’ proposed rule will implement statutory provisions of the 2014 Farm Bill, which was supported by NACS, requiring retailers to stock more varieties of products in four “staple food” categories in order to meet SNAP requirements: meat, poultry or fish; bread or cereal; vegetables or fruits; and dairy. Specifically, retailers must stock no fewer than seven different varieties of food items in each of the four staple food categories.

Prior to the 2014 Farm Bill, retailers had to stock three different varieties in each. So, the minimum number of staple food items would rise from 12 to 28. In addition, retailers would be required to offer at least one perishable food item in three categories, rather than two. NACS expected and supports these changes; the expanded requirements are not in contention. What is in contention is the fact that the definition of a “staple food” item would now exclude multiple-ingredient items, meaning a can of chicken noodle soup, a box of macaroni and cheese, a frozen pizza, a frozen dinner or a mixed fruit cup could no longer be counted in a staple food category and would not go toward a retailer’s “depth of stock” requirements.

This is a dramatic shift from current rules, which permit multiple-ingredient items to be counted in one staple food category based on the main ingredient. For instance, since the main ingredient in macaroni and cheese is pasta, it counts today as one item in the bread/cereals category.

The FNS’ new proposal would also add a “stocking requirement” whereby retailers would always have to have six different units of any food item in a store at any given time. So, multiplying that by the 28 staple items required, retailers would have to have a minimum of 168 SNAP items on their shelves at all times.

“This requirement is unrealistic for small-format stores where shelf and storage space are limited,” Ready argued.

And there’s even more bad news for c-stores in the FNS proposal. If 15 percent or more of a store’s total food sales come from items that are “cooked or heated on-site before or after purchase,” that store would be automatically ineligible to participate in SNAP. This provision alone would push tens of thousands of convenience stores out of the program, according to NACS.

Dennis Lane, a 7-Eleven franchise owner in Quincy, Mass., pointed out that approximately 6,000 of 7-Eleven Inc.’s 8,000 U.S. c-stores currently sell hot food.

Aside from the ramifications for convenience store operators, who this will also ultimately hurt is the many SNAP recipients who use their benefits at convenience stores, the association noted. Many times, convenience stores are the only stores that are close by or open late at night when SNAP beneficiaries are looking to buy necessary food items for their families.

With 50 percent of SNAP households having a family member who is a shift worker, “oftentimes the only place to go at the end of a shift to get milk or cereal is your local convenience store,” Ready explained. “Many SNAP families depend on our stores for the times when they cannot easily get to a larger retailer.” Even if the new SNAP proposal is enforced, Lane said he will do whatever it takes to keep accepting food stamps. “I’ve been doing this for 42 years. We feed our communities and neighborhoods,” he said. “I don’t want to see people become collateral damage. It disadvantages folks who are already disadvantaged.”

WHAT CAN BE DONE?

Help may be coming for the industry from Capitol Hill. In late April, the House Appropriations Committee passed an amendment to the 2017 Agriculture Appropriations Bill that prevents the FNS from using any funds to enact or implement its proposed rule altering retailer standards for SNAP beyond what was agreed upon by Congress in the 2014 Farm Bill.

As of press time, the bill was awaiting consideration by the full House of Representatives.