• by Sarah Mahoney  @mahoney_sarah, July 28, 2023

To make shopping easier for those on public assistance, Walmart is cutting the price of its Walmart + membership program to $6.47 a month, or $49 per year. That’s half of the standard price of $98. Members potentially get  hundreds in annual savings.

The announcement has outsized significance for retailers as seismic changes pressure lower-income Americans. First, funding related to the COVID emergency ended earlier this year, drastically reducing the benefits people can receive. Further cuts, which became a sticking point in recent debt-ceiling legislation, go into effect in September and should intensify retail food declines.

Walmart is the most vulnerable to these changes, since it's the favorite store of America’s 41.2 million Supplemental Nutrition Assistance Program customers. Data from Numerator finds that Walmart captures 25.5% of SNAP grocery dollars, and 97% of recipients have shopped for food at Walmart in the last year. Dollar General, Dollar Tree, 7-Eleven and Winco Foods are also popular with this group.

The end of some COVID-related funding earlier this year, dubbed the “hunger cliff” by some policy experts, meant that recipients in 32 states saw a cut to SNAP benefits. Those reductions averaged about $82 per month.

The average household benefit is $182 per month per household, or about $6 per day, according to the Center on Budget and Policy Priorities.

The end of COVID benefits means those consumers have $23 billion less to spend each year. Circana, the market research company, says SNAP households have responded by cutting monthly food and beverage spending by about 35% of cut benefits. They pared back non-food purchases at a much higher rate.

The new laws, set to go into effect in September, focus on work-reporting requirements for certain age groups. The Center on Budget and Policy Priorities says this means up to one million American adults are set to lose SNAP benefits, with 750,000 older Americans newly at risk.

“We continue to monitor changes in buying behaviors of SNAP households,” writes Alastair Steel, executive, client engagement at Circana, in its report. “Over the coming months, SNAP households may reduce their discretionary spending more than they have to date to free up dollars for food and beverage purchases. The SNAP benefits cuts are still likely to impact food and beverage spending for these consumers in the months ahead.” 

Walmart launched the membership service, which brings together online and in-store benefits, in 2020 as a way to compete with Amazon Prime. Amazon has been providing a similar discount to government-assistance customers since 2017.

Circana reports that SNAP customers are less likely to buy groceries on Amazon, while non-SNAP shoppers spend about 18% more, likely due to larger household size.

Walmart also partnered with the USDA’s SNAP program back in 2019, piloting an online purchase test. And with the recent addition of Alaska, it is now the first retailer to accept SNAP benefits online in all 50 states.

It estimates that by using Walmart +, customers can save up to $75 in gasoline, and hundreds in free shipping and grocery delivery fees.