When SNAP benefits lapse in November, the some 750,000 Oregonians who receive federal food assistance will be the first to feel the effects — but broader economic impacts could ripple throughout the entire state, prompting job cuts or price hikes across the board.
Those who receive monthly food stamps learned last week their Supplemental Nutrition Assistance Program benefits would halt by the month’s end amid the government shutdown.
As that deadline nears, industry leaders and experts have pointed toward SNAP’s larger role as an economic multiplier. Each dollar spent in SNAP benefits generates between $1.50 and $1.80 in economic activity — gains felt by farmers, manufacturers and grocery store employees alike.
Organizations like the Food Industry Association, the trade group that represents grocers like Walmart, Albertsons, Kroger and Target, have urged Congress to restore SNAP funding.
“When one leg of the stool that the government committed to provide is removed, it doesn’t just affect customers’ ability to feed their families,” Jennifer Hatcher, FMI’s chief public policy officer, said in a statement. “It also impacts store scheduling of employees, supplier orders and staffing, and the tax base of local economies across the country.”
Could grocery prices rise?
In Oregon, just over 6% of in-store grocery visits used SNAP benefits this year, according to research firm Numerator. So, when those benefits disappear, retailers in turn lose a substantial chunk of shopper traffic.
The extent of that impact varies based on location, said Keaton Miller, an economist at the University of Oregon.
Rural, low-income areas may attribute more than half of their grocery revenue to SNAP sales, he said, while more affluent neighborhoods in Portland tend to garner far lower percentages. Certain retailers are also more popular among SNAP users, with Walmart capturing nearly a quarter of spending, according to another Numerator report.
Grocery stores are not high-margin businesses, Miller said, meaning any loss in revenue can easily send locations into the red, prompting employers to make flash decisions about whether to reassess inventory or product prices.
But these judgements are steeped in uncertainty — particularly, about how long SNAP benefits will be affected by the federal government shutdown.
“If you’re running a Safeway or any major chain, you’re making some bets,” Miller said. “You’re going to see a variety of impacts driven in part by what decision makers at these different grocery stores believe about the future.”
Stores may initially try to renegotiate supplier orders, he said, for instance by pulling back on more expensive cuts of meat and instead stocking cheaper, calorie-dense alternatives. But if altering long-term agreements isn’t possible, retailers may be pushed to adjust prices in order to account for extra stock.
From there, stores are left with two options: They can increase demand by lowering the cost of difficult-to-sell items, or they can increase prices across a store’s entire inventory.
The latter seems more likely, Miller said.
“(Grocery stores) have to pay for their facilities. They have to pay for their staff. They have to pay for all of the logistics, no matter how much they’re selling to consumers,” he said. “So, that’s going to put potentially upward pressure on pricing.”
Walmart, Kroger and Costco — the top three destinations for consumer spending among SNAP benefit users — did not respond to questions about whether inventories or prices may be affected at their stores.
How might jobs be affected?
Similar forces could also target food workers, with store managers driven to reduce wages, hours or employees in an attempt to recoup lost revenue.
SNAP supported nearly 200,000 U.S. grocery industry jobs in 2020, according to a report by the Food Research & Action Center, an anti-poverty advocacy and research organization.
On Monday, the United Food and Commercial Workers International Union sent a letter to the U.S. Department of Agriculture calling on leaders to use contingency or other funding to keep SNAP benefits alive past Nov. 1.
The sense of urgency is shared by the union’s regional chapter, UFCW Local 555 — which represents most Albertsons, Safeway, Fred Meyer and QFC workers in Oregon and other Pacific Northwest states.
The impact of SNAP benefits go beyond just the individuals and families they directly serve, Miles Eshaia, a UFCW Local 555 spokesperson, said in a statement.
“A continuing loss on those sales to major retailers could lead to hour cuts for store workers,” Eshaia said, “and that will fuel a downward spiral of economic insecurity, not just for the most vulnerable among us, but for the whole community.”
Long-term impacts?
If the government shutdown — and lapse in SNAP benefits — drags on, economic impacts could trickle even further down the food chain.
Stores that are more dependent on revenue from food stamps might consider shutting down entirely, prompting nearby locations to raise their own prices as competition decreases, said Miller, the University of Oregon economist.
A similar domino effect could unfurl if grocery stores are able to renegotiate supply agreements and cut back on certain items.
“That just kicks the problem up a level of the chain,” Miller said. “My suspicion, assuming this goes on for a long time, is that starts looking like layoffs. If General Mills has less demand for Cheerios, they’re not going to need to operate the Cheerios factories as much.”
In that case, the next step would be a hit to the state’s agricultural industry, he said.
It all depends, though, on how long cuts to federal food assistance continue.
“It’s one kind of story if the shutdown ends and SNAP benefits are restored in a week or two weeks,” Miller said. “It’s another kind of story if it’s three months.”
©2025 Advance Local Media LLC. Visit oregonlive.com. Distributed by Tribune Content Agency, LLC.
