food stampsGrocers and retailers had to brace themselves for a consumer spending drain when the food stamp benefits’ boost expired late last month. The change left forty-eight million American citizens with approximately sixteen billion dollars less to use in the next three years. This change comes a few months following the end of consumers’ monthly benefits due to a payroll tax cut expiration. From the business perspective, the cuts will have a great impact on discounters, grocers, gas stations and dollar stores, which heavily rely on low-income consumers and shoppers. There has been weak spending in the strained consumer segment and this has led to retailers such as Target Corp. and Wal-Mart Stores Inc. to reduce their sales prediction for the remaining part of the year prior to the holidays.

According to Midwestern grocer Roundy’s Inc., Spokesperson, Jim Hyland, the change will definitely affect the food chain and the entire grocery industry. Kroger’s stores experienced a softening of food stamp use from late August to early September. However, consumers are expected to make up for the cuts by making use of more cash to purchase groceries. Following the expiration of the temporary increase, the benefits of a family that receives maximum allotment is expected to lower by 5.4 percent. This equates to approximately 36-million dollars per month or a hundred and twenty dollars per year. These statistics were presented by the United States Agriculture department. According to federal records, food companies and retailers such as Wal-Mart have spent a lot of money over the past few years pushing to get nutritional assistance. These concerns have been raised to lawmakers with the hope of yielding results. In September, a bill was passed by the House to curtail the money spent on food stamps by at least five percent.