Wal-Mart follows other retailers in testing online grocery pickup for SNAP customers

by Kim Souza (ksouza@talkbusiness.net) 180 views 

Low income customers who rely on food stamp (SNAP) benefits which are now transmitted electronically will have the opportunity to purchase grocery items online and pickup at a few Wal-Mart locations testing the service.

The retail giant said Tuesday the service is available in one store in Houston and four others near Boise, Idaho, but there are plans to expand that service to more market through the holiday season and beyond. Mike Turner, vice president of Wal-Mart’s e-commerce operation, noted in a blog posted on the company’s website Tuesday the company wants to make this service and convenient shopping option available to everyone.

“Convenience shouldn’t be dictated by the way you pay,” Turner said.

The hurdle in offering the service is SNAP recipients are required to pay for purchases at time and place of sale. A SNAP customer places their order online and chooses the pay-at-store option. Once the order is placed the customer selects a pickup time to retrieve the order. At the pickup a store employee brings a terminal where they swipe their SNAP cards. The employee verifies the SNAP information and prints a paper receipt and the customer can be on their way, said Molly Blakeman, corporate spokeswoman for Wal-Mart Stores.

The Supplemental Nutrition Assistance Program (SNAP) benefits are used by roughly 44 million consumers in the U.S. The customers often shop Wal-Mart stores and are sometimes standing in line at midnight to spend the funds as soon as their cards have been reloaded with the benefits, according to Wal-Mart executives who have spoken on the topic in recent years. Wal-Mart has also said its stores are the busiest on SNAP payment days.

Having the physical stores where SNAP benefits could be spent as soon as they are loaded seemed to be advantage for Wal-Mart, but in January Amazon announced it would begin testing SNAP for online grocery purchases with several other retailers in a pilot program with the U.S. Department of Agriculture which oversees SNAP payments. Wal-Mart was not part of that group.

Amazon’s pilot requires the SNAP customers to be Prime Members or have $49 minimum order to avoid the delivery fee. But since the acquisition of Whole Foods there are more opportunities for Amazon to offer free pickup and that is more competition for Wal-Mart.

Wal-Mart is also following on the heels of FreshDirect in New York; Safeway in Maryland, Oregon and Washington; ShopRite in Maryland, New Jersey and Pennsylvania; and Hy-Vee in Iowa. Two other smaller New York retailers — Hart’s and Dash’s Market — are also testing the service. Harris Teeter has begun accommodating SNAP customers using EBT ordering through an ExpressLane, which is it’s online shopping service.

Assuming the test goes well for Wal-Mart there is opportunity given the retailer now has online grocery pickup available in 1,000 locations across the country, a much bigger scale than any of the other retailers testing this service. Given Wal-Mart’s mission to low price and having online grocery with free pickup could be advantage for Wal-Mart who is tardy to the initiative.

Keith Anderson, vice president of strategic insights at Profitero, said if Wal-Mart’s competitors are offering the service it has no choice but to do the same. Carol Spieckerman, CEO of Spieckerman Retail, said Wal-Mart’s online option for SNAP customers is a logical progression as shoppers of all income levels migrate to digital in droves.

“This latest move benefits the entire retail ecosystem as Walmart once again builds bridges to underserved customers. Walmart is both serving a need and creating new possibilities for these customers,” Spieckerman added.

Last year more than $70.9 billion SNAP benefits were provided to U.S. consumers. In Arkansas that total was about $200 million in benefits. The average SNAP benefit per person was $125.51 per month.