Technology

How Online SNAP Can Boost Independent Grocers

NGA, industry partners working to expand the program
SNAP program logo

The National Grocers Association (NGA), along with federal legislators and the U.S. Department of Agriculture’s Food and Nutrition Service (FNS), is working to expand Supplemental Nutrition Assistance Program (SNAP) Online Purchasing capabilities to more independent grocers.

NGA hosted a virtual meeting with FNS Administrator Pam Miller and several independent grocers and e-commerce providers to talk through the issues that independents have with the application and testing process for the program.

“SNAP dollars can represent anywhere between 5% and 6% of an independent retailer sales,” said Nick Nickitas, CEO of Rosie, an e-commerce platform provider that offers a platform for retailers to offer SNAP online, in an interview with WGB. Rosie was a participant in the NGA virtual meeting and is working with independent grocers on the application and certification process for the SNAP Online Purchasing program. “They want to make sure that [SNAP] portion of their sales don’t go to Amazon or Walmart.”

The SNAP Online Purchasing program has grown from its initial eight-state test in four retailers, including two independent grocers, to a nearly national platform (now available in 47 states) since the coronavirus pandemic began in March.

Adding more retailers to the program can also help alleviate food deserts, merchants say. “A challenge for many small towns and rural areas is that they do not have the population density to support a profitable full-service brick-and-mortar grocery store, and in turn, those communities become food deserts,” said Jimmy Wright, owner of Wright’s Market and one of the retailers who participated in the pilot program with the help of Freshop. Wright was a participant on the NGA call. “Our mission in our business is nourishing families and strengthening communities, and SNAP online purchasing can help us bring that mission to fruition, by making it easier to serve folks most in need whether or not they can physically come to the store,” he said.

Walmart and Amazon are currently often the sole participants in the program in a given state, a situation that NGA and others in the independent grocery community are trying to change. As a result of the virtual meeting, NGA offered the following recommendations to the FNS:

  • Explore ways to increase choice in the third-party payment providers space and alleviate some of the onboarding costs for retailers.
  • Work quickly and efficiently in approving and launching retailers, while expediting any possible aspects of the process.
  • Determine if FNS needs more funding and resources from Congress to most quickly and successfully administer SNAP online purchasing.

“Since the beginning of the COVID-19 pandemic, grocers have been working diligently to serve their customers and feed their communities in the most efficient and effective ways possible. Independent grocers play an important role in feeding America’s rural communities and helping to eradicate food deserts,” said NGA Director of Government Relations Molly Pfaffenroth. “As consumer behavior and expectation shifts to online offerings, it is incredibly important that independent grocers have the opportunity to offer SNAP online purchasing so they can continue to best serve their customers according to their needs and help fight food insecurity during this critical time.”

NGA also is supporting the passage of the Expanding SNAP Options Act, which they say would make it technically and financially easier for independent grocers to participate in SNAP online. According to the USDA Economic Research Service (ERS), independent grocers play an important role in helping to ensure food access for consumers, particularly in low-income and rural areas. An USDA ERS study found that independent grocers outnumber chain grocery stores in remote rural areas and operate at higher rates in counties with a large share of Black and Hispanic citizens.

Several independents are in the application process of the SNAP online purchasing program, but as of yet, only the two independents that were approved to participate in the pilot are offering the service primarily because of what they say are burdensome requirements of the process.

In order to participate, retailers need to submit a letter of intent to the USDA FNS and once accepted, the retailer is assigned a FNS number, an internet retailer number. Then, they must go through a certification process with FISERV/Pay Secure and FNS before they can start accepting SNAP benefits online. Once they are certified, the retailer can then offer the option for the customer to input their SNAP PIN number to purchase eligible items. The customer can order groceries as usual and will see two totals at checkout: one that will be deducted from their SNAP benefits, and one that will be charged to their credit or debit card.

“There’s a lot of different steps to the process, but we would encourage all retailers to start applying now so they can get their hat in the ring and get up and running as soon as possible,” Nickitas said. It typically takes about three to four months for retailers to move through the entire process, with four to eight weeks needed for the government approval process, he added.

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