Dive Brief:

• The U.S. Department of Agriculture (USDA) is seeking applications for a $5 million grant aimed at increasing the number and diversity of retailers offering online payments for shoppers using EBT cards by providing them with education and technical assistance, per a press release on Thursday. 
• With the grant, the agency is aiming to help smaller, independent retailers, especially ones serving rural shoppers and meeting “cultural food preferences,” access the technology needed to support online EBT payments.
• The USDA also said it is developing a pilot program to allow SNAP consumers to use their phones to buy groceries at the checkout counter and will soon seek states to participate.

Dive Insight:

As SNAP online purchasing becomes more widespread within the grocery industry, the USDA is looking to make the capability available to shoppers through a broader range of retailers.

“The retailers who were first to offer SNAP online purchasing typically were larger grocery chains with established online shopping offerings to use as a foundation,” the USDA announcement noted. “Many retailers, especially smaller ones, face technical challenges or a lack of resources to deploy e-commerce sites, or update existing sites, that allow them to provide online services that meet SNAP requirements.”

The USDA will accept applications for the grant through Sept. 6 and said it will provide an update later in the fall. Funding for the grant comes from the American Rescue Plan, an economic relief package signed by President Joe Biden in early 2021 that includes nutrition assistance and improvements to the food supply chain. 

The upcoming pilot to allow for mobile EBT payments in-store follows work by Sam’s Club to start accepting EBT payments with its Scan & Go service at participating locations.

The USDA’s latest efforts tie to its larger ambitions of modernizing SNAP and increasing online shopping access across the U.S. 

The push for retailer diversity with SNAP online purchasing follows a sharp spike in SNAP e-commerce. The USDA said more than 3 million SNAP households shopped online in May 2022 — up from approximately 35,000 in March 2020 — crediting the recent rapid adoption by grocers of SNAP online purchasing for the increase.

Last year, the National Grocers Association found in an economic study that independent grocers accounted for 33% of U.S. grocery sales, up from 25% a decade ago. That finding indicates that expanding SNAP online purchasing to smaller grocers could boost not only grocery e-commerce availability to consumers, but also help independents increase their sales. 

During the last two years, roughly 130 retailers, representing “thousands” of stores, added the capability, according to the press release. Initially dominated by Amazon and Walmart, the availability of SNAP online purchasing, which varies state by state, has expanded to include other chains, such as Whole Foods Market, Aldi and certain Albertsons’ banners. Regional grocers including Meijer and Bashas’, along with some independent retailers, also offer the service. 

Along with size, the types of retailers are also diversifying: Club retailers, including Sam’s Club and BJ’s Wholesale Club, have recently added digital payment options for SNAP recipients. 

Following in the footsteps of SNAP online purchasing, efforts are also underway to allow participants of the Special Supplemental Nutrition Program for Women, Infants and Children to buy groceries online, with several states, including Washington and New Mexico, currently running pilots.