SNAP Benefit Reductions Create a Value-Focused Grocery Marketing Opportunity

Now more than ever, campaigns focusing on value are a grocery marketing opportunity to win loyal customers. The emergency allotments that increased SNAP benefits during the COVID-19 pandemic ended in February of this year1.

 

Now more than ever, grocery marketers have an opportunity to win loyal customers by focusing on value. The emergency allotments that increased SNAP benefits during the COVID-19 pandemic ended in February of this year1. According to a report released by Dunnhumby in May, 1 in 8 grocery shoppers are stressed due to tighter budgets and are looking for grocery retailers to offer solutions2.

The SNAP benefits reduction has the potential to drive down revenue for U.S. grocers by as much as $20 billion. Grocers who respond by offering value to ease budget concerns for shoppers affected by the reductions can gain loyal customers for the long term2.

About the SNAP Consumer:

  • 92% of households are near poverty line, $30,000 for a family of four.3
  • 86% of households include a child, elderly person or person with disabilities3.
  • The challenges consumers with tight grocery budgets face make them even more likely to become loyal customers2.
  • They visit fewer grocery stores than higher-income shoppers in an average month – giving a greater share of their grocery budget to one retailer2.
  • SNAP shoppers also tend to be limited on time to shop, according to the Dunnhumby report. Retailers that make it easier for them to get food that they can afford have an opportunity to win their loyalty2.

Did you know?

  • 12% of U.S. customers choose a grocery store because it accepts SNAP and WIC.4
  • The March 1st expiration of increased benefits is already affecting customer behavior.5
  • Grocery units purchased fell 12% in March (YOY U.S.).6
  • Rural counties were the largest segment of the U.S. receiving payments.4
  • Nearly 90% of counties with highest food insecurity rates are rural.4
  • Opportunity in print and digital to offer strong values on commodity items.7

Coupons and deals will be sought after more than ever before, particularly among SNAP shoppers in rural markets. Adapt your marketing strategy to pinpoint target these consumers with messaging that communicates value.

Keep in mind, the unique rural consumer requires a different approach.

Limited media options to reach rural consumers:

  • Continuous rapid newspaper decline
  • 28% of rural still without broadband5

Inflation impacts rural consumer spending 9% more than urban consumers.

Two significant contributing factors are:

  • Rural income gains lag behind the rate of inflation, reducing discretionary income for rural consumers.
  • Rural consumers drive more out of necessity and buy more gasoline. Increases in fuel prices have a greater impact on rural consumer budgets.

Grocery, gas, dining out, and home improvement all are affected.

  • 45% of rural consumers are driving less4
  • 40% are making fewer shopping trips4

In response, rural consumers are more likely to shop sales and 21% more likely to use coupons than urban shoppers. Coupons and advertising inserts are a key driver of purchase decisions for grocery shoppers nationwide4.

When print ads are coordinated with direct mail across multiple channels, it boosts campaign performance.

  • 60% of consumers are driven to online activity after receiving direct mail8.
  • Integrating digital ads with direct mail increases program performance as much as 28% vs. direct mail alone9.

Grocery marketers have an opportunity to engage SNAP shoppers by consistently offering them opportunities to maximize their shopping budgets. Reach out today to plan an integrated strategy that targets your best potential customers with offers that communicate value.

Sources: https://www.fns.usda.gov/snap/changes-2023-benefit-amounts1; The SNAP Rollercoaster: A Dunnhumby Special Report on Hunger in the U.S.2; Food Research & Action Center, 20233; Prosper Insights & Analytics4; The Daily Yonder Feb. 20235; Winsight Grocery Business May 20236; RPM 20237; SC360 – The Future of Direct Mail, 20228; Historical program performance9