By Nathaniel Meyersohn, CNN

New York (CNN) — Wright’s Market has been a fixture of Opelika, Alabama, a town of around 30,000 near Auburn University, since the 1970s. The supermarket relies on the Supplemental Nutrition Assistance Program (SNAP) for roughly one-third of sales.

SNAP is a “big piece of what we do,” said owner Jimmy Wright, who has worked at the store since he was 12 and bought it almost 30 years ago. “We see very hardworking people who are using this program to try to feed their families and pay rent.”

SNAP, formerly known as food stamps, is the largest anti-hunger program in America. Recipients receive, on average, about $6.16 a day, according to the Center on Budget and Policy Priorities.

But President Trump’s One Big Beautiful Bill Act makes the largest cuts to food stamps in the program’s 86-year history, jeopardizing assistance for more than 42 million people. It also imperils the program’s role as an economic anchor for grocery stores and communities, particularly in rural areas, according to grocers and economists.

SNAP is a “great economic driver for our industry and the supply chain,” including farmers, manufacturers and wholesalers, Wright said.

In May, progressive think tank Center for American Progress identified 27,000 retailers — mostly in rural areas with large shares of SNAP recipients — likeliest to shoulder the brunt of cuts.

Large chains such as Walmart, Kroger, and Dollar General can absorb the hit. It’s the small, independent grocers that depend heavily on SNAP to sustain razor-thin profit margins that will be hit the hardest, food experts say.

These independent grocers are often the only full-service supermarket in rural and low-income areas. Cuts to SNAP, along with changes to Medicaid, will likely impact a wide swath of vulnerable Americans that the GOP promised to protect.

At Wright’s Market, shoppers using SNAP benefits are a reliable customer base and help guide business decisions. For example, the store designs its food selection and prices to meet the budgets of low-income customers on assistance. It also participates in Agriculture Department programs designed to help SNAP recipients buy fresh fruits, vegetables and milk.

But SNAP cuts may force Wright’s Market to raise prices or cut jobs.

“If we start dropping in revenue, we’ll have to find ways to compensate for that to keep going,” Wright said.

The Agriculture Department has said that every $5 in new SNAP benefits generates as much as $9 of local economic activity. Food stamps also lead to more stores and higher employment, sales, and salaries, a 2020 study by University of California, Davis, researchers found.

SNAP is “such a part of stores being able to exist,” said Wright, who is also a national advocate for independent grocers. Small stores “don’t have the sales volume to lose, and they are more dependent on the SNAP program being strong and customers being able to use it.”

‘More food deserts in urban and rural areas’

The nonpartisan Congressional Budget Office says the law will reduce federal spending on SNAP by around $187 billion over the next decade.

House Republicans say the changes will “restore integrity” to the program and benefit grocers by pushing more people to work. New work requirements in the law expand to parents with children older than 13 and people ages 55 to 64.

“A significant number of people who currently are on SNAP through unemployment will now be climbing a ladder of opportunity, which (means) they’ll be able to have more resources to buy more food. So, our grocers are going to do well with this,” House Agriculture Committee chair G.T. Thompson, a Pennsylvania Republican and top negotiator in the plan to slash SNAP, told Politico.

But studies have shown work requirements for SNAP do not increase employment.

SNAP cuts may even result in job losses. A study earlier this year by the nonprofit research group Commonwealth Fund estimated that cuts could result in the loss of 143,000 food-related jobs in agriculture, retail grocery and food processing.

The grocery industry lobbied hard against the reduction in funding. In 2023, SNAP accounted for $124 billion in sales at 262,000 retailers, half of which were at superstores such as Walmart, while a quarter went to supermarkets.

SNAP generates a “tremendous amount of economic activity that is targeted at a specific sector of the economy — grocers,” said James Ziliak, the founding director of the Center for Poverty Research at the University of Kentucky. “A key advantage of SNAP is that money is spent locally.”

“It is a very component of the local economy for poor communities, both urban and rural,” as well as wealthier communities with large low-income workforces, he added.

John Ross, the CEO of IGA, a chain of independent grocery stores, estimates total funding for SNAP will be cut by 5-6% in the short term and 8-9% in the long run. Those figures, he said, could be the difference between “grocery stores being able to survive and failing.”

“There’s a possibility of creating more food deserts in urban and rural areas,” he added.

Stabilizer during downturns

Many economists say SNAP is one of the most effective social safety net programs because it acts as an automatic stabilizer during economic downturns. As incomes drop, SNAP spending typically increases as more people become eligible and enroll.

Between 2018 and 2023, 12% of US households received food assistance. Roughly half are families or include a person with a disability. Among other requirements, households must be at or below 130% of the federal poverty lines to qualify.

SNAP has been successful because it’s integrated with the market, said Diane Whitmore Schanzenbach, an economist at Northwestern University who studies social policy.

SNAP relies on the “private sector to provide the food that people can buy. It really plays to our strengths,” she said. “What the government does very well is give resources to people to have them spend through the normal channels of commerce — at stores in their local area.”

But the new law makes several major changes to SNAP that will impact grocers both right away and in the future.

Instead of drawing more people into the labor market, work requirement changes will push people in poverty off food assistance, Schanzenbach said.

“These folks have huge barriers to work. It’s not that they are laying around on their couch and playing video games,” she said. “They’ve got addiction problems. They’ve got mental health problems. Saying ‘We’re going to take away your food and that’s going make you work’ defies logic.”

The legislation also shifts some of the cost burden of the federal program to many states for the first time.

States have more limited borrowing power than the federal government, so SNAP will become a less effective stabilizer the next time a recession or state budget crunch hits, Schanzenbach said.

During the Great Recession, SNAP was the largest source of spending for low-income Americans, helping keep businesses afloat.

“People are still going to need to eat,” she said. But instead of going to grocery stores and stimulating their local economy, “they’re going to have to go to food banks, which do not have the capacity to fill this need.”

CNN’s Tami Luhby contributed to this report.

The-CNN-Wire
™ & © 2025 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.