Walmart is actually testing the use of Supplemental Nutritional Assistance Program (SNAP) benefits to pay for online grocery orders at a few stores, CNBC reported. SNAP is popularly known as food stamps but recipients usually pay with a card through electronic benefits transfer (EBT).
"Access and convenience have long been a part of who we are," Mike Turner, the Walmart vice president for ecommerce operations wrote in a blogpost. “Convenience shouldn't be dictated by the way you pay.”
The story did not say if Walmart is planning to add EBT to its growing grocery delivery program. Around 1,000 Walmart locations in the United States now participate in the company’s pickup program for online shopping orders.
Not be outdone, Kroger, the nation’s standalone grocer, is testing EBT payment for groceries at its Harris Teeter subsidiary. Walmart is America’s largest grocer, while Kroger is the largest owner and operator of traditional supermarkets in North America.
It is easy to see why Walmart and Kroger are interested in adding SNAP to online groceries. Around 44 million Americans use SNAP to put food on the table.
Will Amazon Accept Food Stamps Next
Walmart’s biggest rival Amazon (NASDAQ: AMZN) is also interested in getting a piece of the food stamp pie. The Everything Store was on a list of companies that signed for the United States Department of Agriculture (USDA) test of SNAP payment for online grocery orders, CNBC reported.
There is no evidence that Amazon is participating in SNAP; but it just purchased Whole Foods Market, which operates around 400 standalone grocery stores in the USA. Since Amazon is cutting prices at Whole Paycheck, adding SNAP benefits would be a logical progression. New stories indicate that Amazon plans to add pickup and returns for online merchandise at some of its stores.
Amazon is also accepting returns via Kohl’s (NYSE: KSS) a department store that targets working-class customers, CNBC reported. Since food stamps are now a regular feature of working-class life in the United States Amazon will need to tap them to attract such customers.
This will be a major threat to dollar store operators; Dollar Tree (NASDAQ: DLTR) and Dollar General (NYSE: DG), which depend heavily upon working class customers. Also in Amazon’s crosshairs is the fast-growing discount grocery chain Aldi; which is now a fixture in many lower-income neighborhoods in the Rust Belt.
Walgreens’ Rite Aid Buyout Finally Official
The Federal Trade Commission (FTC) will let Walgreens pay $4.375 billion for 1,932 Rite Aid drug stores and three distribution centers. That would make Walgreen the nation’s drugstore operator with 10,107 locations. Walgreens currently operates 8,175 stores making CVS Health (NYSE: CVS) the largest drugstore operator in the United States.
The stores and distribution centers purchased will be converted to the Walgreens brand name over time. The rest of Rite Aid’s stores will be sold or sold to Fred’s (NASDAQ: FRED) a smaller drugstore operator based in Memphis.
A logical next step would be for Walgreens to add Amazon pickup and returns to its stores. It looks as if the retail landscape is changing beyond recognition.
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.