Walmart, Amazon and grocery chains like ShopRite hope to tap into a lucrative new market: Food stamp recipients who want to shop for groceries online.
For the first time, the US Department of Agriculture has given the green light for recipients of the Supplemental Nutrition Assistance Program, or SNAP, to use their benefits to buy groceries online and get them delivered to their homes, the agency said Thursday.
The retailers are kicking off a two-year pilot in New York that will enable some of the state’s 2.7 million SNAP recipients to use their benefits for online grocery orders.
ShopRite and Amazon (AMZN) will service the New York City area, while Walmart (WMT) will cover upstate locations. The USDA said FreshDirect, Safeway, Hy-Vee and Dash’s Market will join the New York pilot, and the test will eventually expand to other parts of New York, as well as Alabama, Iowa, Maryland, Nebraska, New Jersey, Oregon and Washington. It’s not yet clear which other grocery chains will be involved.
The USDA says it eventually wants the more than 38 million Americans on food stamps nationwide to be able to make online purchases, which will make it easier for some working moms, as well as the elderly and disabled, to buy food. But the move also opens up the market to online retailers.
“People who receive SNAP benefits should have the opportunity to shop for food the same way more and more Americans shop for food — by ordering and paying for groceries online,” said Agriculture Secretary Sonny Perdue. “As technology advances, it is important for SNAP to advance too.”