By Erin Rigik, Senior Editor
The recently enacted Federal Farm Bill is requiring new “depth of stock” mandates for convenience stores involved in the Supplemental Nutrition Assistance Program (SNAP), more commonly referred to as food stamps.
With the Farm Bill in place, the U.S. Department of Agriculture (USDA) next must iron out the exact regulations that will hit c-stores and other businesses involved with the program. Those regulations could be announced as soon as the end of 2014.
The changes to SNAP involve the number of items stores must supply in specific “staple food” groups.
Under the old SNAP rules, convenience stores, and other businesses involved in SNAP, were required to offer a variety of three different items in each of the four “staple food” groups (meat/poultry fish; fruits/vegetables; bread and cereal; dairy). In two of those categories, c-stores had to stock at least one perishable product.
Now instead of three items in each of the four categories, c-stores need to supply seven items in each of the four categories. And they must supply a perishable product in three of those four categories instead of just two.
USDA regulations stipulate that “staple food” means items intended for home preparation and consumption. Commercially processed foods and prepared mixtures with multiple ingredients are only counted in one staple food category.
“Perishable” foods under the definition of the law are items that are either frozen staple food items or fresh, unrefrigerated or refrigerated staple food items that will spoil or deteriorate in 2-3 weeks.
Impact on C-stores
Those against the changes argue that the new requirements go against the rule of supply and demand. In other words, if customers wanted these products, c-stores would already be supplying them. Simply adding more perishable and staple food products doesn’t mean customers will purchase them and the burden would be on c-stores to find space for these products at the expense of other items that are in demand.
The potential impact the rule is expected to have on c-stores is as diverse as the wide array of stores that comprise the industry. For top quartile stores that are already making fresh perishable foods a priority, they likely will barely be affected as they are likely already meeting the minimum requirements. Meanwhile, for smaller chains, such as a corner store in a big city or rural outlet that is not already stocking that level of food groups, the new rules could pose a larger—even unworkable—challenge.
“The convenience store industry is very diverse. The new requirements will impact different stores in different ways. At one end of the spectrum are stores that are already in compliance with the new requirements,” David Fialkov, a member of NACS’ legislative counsel, told CSD. “At the same time, there are stores that do not currently satisfy the new requirements. These stores will have to make a decision about whether or not they want to participate in the program. Some stores will make the requisite investments. Others will not.”
If stores stop offering SNAP, it could have consequences for the communities they serve, particularly for low-income families who would have to travel a further distance to buy groceries.
While time will tell the level of severity when the final rule is released by USDA, the mandates are coming, and c-stores should begin preparing themselves for potential changes. Once USDA reviews the mandate and comes up with a new rule, the public will have the opportunity to comment and then a final rule will be issued.
USDA may attempt to make the requirements even higher than the minimum of seven required, although during the normal comment period, retailers and customers should have a chance to voice any concerns.