Over the last four years, small businesses have been tested and squeezed. Inflationary pressures, supply chain challenges, government red tape and tax uncertainty, labor shortages and high labor costs have made it more difficult to operate and grow a business. Small businesses optimism is at its lowest since 2012, and delinquency rates on rent have hit a three-year high. Now, more than ever, Congress and the Biden Administration must work to restore business confidence and an environment that encourages growth and success.
At the heart of American commerce lie grocers, convenience stores and supermarkets. These businesses boost local economies, they support community health, and they promote community vibrancy. These businesses not only provide significant economic benefit to local communities, they are the key source by which families put food on the table. Yet, like many other businesses, these stores face significant pressure to stay afloat in cities and rural areas where food insecurity is already high and profit margins are slim.
An idea has popped up in Congress that would make it even more difficult for grocers to operate in rural and urban areas. Some lawmakers are pushing to impose new restrictions on families that rely on the Supplemental Nutrition Assistance Program (SNAP) so they can only purchase “nutrient dense” food items. The trouble is, there’s no definition for this standard and would empower the government to potentially eliminate everyday grocery items like white bread, peanut butter or bacon
Encouraging people to eat healthier is an important goal that needs to be fully encouraged, but placing arbitrary restrictions on what families can put in their grocery carts is fraught with problems. It would turn clerks and cashiers into the food police by requiring they enforce a “good food” list. This adds an enormous obligation to small businesses already struggling to survive. Grocery and convenience stores operate on really tight profit margins, so Congress must ensure that any changes to SNAP do not unduly harm these businesses.
The SNAP program has been in existence for nearly six decades. It has successfully provided families in need with reliable and affordable access to food with the added benefit of boosting local economies and their overall wellbeing. Today, more than 40 million Americans--over 22 million households-- rely on these benefits to feed their families. The Electric Benefits Transfer (EBT) system is widely used across the country, which allows SNAP recipients to pay for food. For many convenience and grocery stores, EBT cards are an integral part of their business model, particularly in high-poverty areas where SNAP purchases account for a significant proportion of a stores’ total sales.
Today, more than 250,000 retailers partner with the United States Department of Agriculture to provide SNAP benefits. Of those, more than 80% are smaller retailers such as locally-owned grocery stories, bakeries, farm stands and more.
As a result, the trade association that represents these important businesses, the National Grocers Association (NGA), opposes efforts to limit SNAP choice. A recent NGA letter notes: “Restricting eligible items to those approved by the U.S. Department of Agriculture will quickly drive-up food costs and strangle the program with needless red tape,” all the while harming retailers.
Efforts to reduce SNAP choice would doom many small businesses across the country. Again, restricting certain categories of foods and beverages from SNAP eligibility means SNAP recipients could only purchase “nutrient-dense” food that aligns with existing dietary guidelines. This essentially forces the government to examine over 600,000 new products on a yearly basis and would require small business owners and their employees to police these purchases at the store.
Wrapping businesses with bureaucratic red tape is nothing new for the federal government, but some efforts are too meddling and too costly. Restricting currently eligible items on top of examining new products would create a vast new bureaucracy, and snowball into higher costs for businesses and higher prices for consumers.
As small businesses continue to navigate an array of inflationary and competitive challenges, elected officials should focus on policies that stabilize and energize our economy, not burden businesses and their customers with new mandates that make it harder to make ends meet. SNAP has proven to be successful, and adding arbitrary restrictions will only hamper the ability of small businesses to effectively partner with the government on this program while serving and supporting their local communities.
Karen Kerrigan is the president and CEO of the Small Business & Entrepreneurship Council
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