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Walmart, Amazon and grocery chains such as ShopRite are hoping to conquer a lucrative new market: recipients of food vouchers who wish to shop online. For the first time, the US Department of Agriculture has given the go-ahead to recipients of the Additional Nutritional Assistance Program, or SNAP, to use their benefits to purchase from the online grocery store and the deliver home, announced Thursday the agency. Retailers are launching a two-year pilot project in New York that will allow some of the state's 2.7 million SNAP beneficiaries to use their benefits for online grocery orders. ShopRite and Amazon will serve the New York area, while Walmart will cover the northern destinations of the state. Other retailers are expected to join the pilot project in the coming months, and the test will eventually extend to other parts of New York, as well as to Alabama, in the United States. Iowa, Maryland, Nebraska, New Jersey, Oregon and Washington. The USDA has indicated that it wants the approximately 38 million Americans registered on food stamps across the country to shop online, which will make it easier for some elderly and disabled mothers to buy food. food. But the move also opens the market to online retailers. "People who benefit from SNAP benefits should have the opportunity to shop as more and more Americans – by ordering and paying for their purchases online," said Secretary of Agriculture Sonny. Perdue. "As technology advances, it's important that SNAP advances as well." Online shopping today only accounts for a tiny fraction of grocery shopping, but analysts expect a market growth. Amazon, Walmart and other countries are trying to stand out, as buying meat and products online is becoming increasingly popular among high-income and low-income buyers. Taking advantage of the $ 63 billion food stamp market could be a big boost for retailers in this area. Recipients currently buy a lot in big box stores and grocery chains. According to the latest data from the USDA, $ 52 billion, or 82% of all food stamps, have been spent at these retailers, according to the most recent USDA data. "It was only a matter of time before we saw the benefits of SNAP starting to impact the online grocery world," said Tory Gundelach, an analyst at Kantar. Key Customers The SNAP recipient is already an important customer of Walmart and other grocery stores. In the United States, about 4% of Walmart sales come from food stamp purchases, estimates analyst Michael Lasser of UBS in a report last year. Walmart refused to confirm this figure. Even small changes to food assistance benefits can affect retailers' sales. When the government shut down earlier this year, February's profits were distributed earlier, resulting in increased sales at Walmart and Dollar General. "A lot of money is injected into the food store system via SNAP, so retailers will try to maximize that," said Elizabeth Racine, professor of public health at the University of California. North Carolina Charlotte, who studies food aid policies. However, Walmart and supermarkets have lost market share of the food stamp to convenience stores, pharmacies and dollar stores, which are rapidly opening new locations and expanding their grocery selection. Dollar General, for example, adds product sections to hundreds of stores located in rural and urban food deserts. Walmart, Amazon and others hope that offering recipients food stamps the opportunity to buy online will help them stand out from moderately priced, non-moderated stores. t Delivery of offers. Preparatory work The new online shopping program has been in preparation for some time. The 2014 Farm Bill invited the USDA to test online shopping. The USDA is using the pilot project announced on Thursday to further test technical and safety issues before rolling out the program nationwide. Online purchases using food stamps require a higher level of security to prevent and detect misuse. Participants can use their benefits to purchase eligible items online, but not for shipping or service fees. Walmart and Amazon are also preparing for online orders to become a more important part of the ticket program. ;food. Since 2017, Walmart has been testing a separate pilot project that allows customers to use food coupons to order their purchases online and then pick them up in stores. It is currently available in 40 stores. But delivery was not an option in his pilot project. In the new pilot project announced in New York, Amazon removes premium subscription fees for customers buying food coupons that want to buy groceries and essentials from AmazonFresh and Prime Pantry. "What we are trying to do is strengthen our commitment to making food accessible," said Kristina Herrmann, who oversees Amazon's involvement in the USDA pilot project. Ms. Herrmann did not specify the scale of the market for the use of online food vouchers, but Amazon is prepared for the launch of the USDA Driver. She had to create a technology to accept payments from customers who purchased food stamps and create new web features for buyers using the program. Barriers to delivery The purchase of online groceries could to interest recipients of food vouchers living in food deserts in urban and rural areas, said Racine Professor of North Carolina. This could also work well for customers who do not have reliable transportation to get to grocery stores. However, retailers will have to overcome several obstacles before entering this market. Amazon and Walmart will have to deal with Delivery Difficulties to Ship Fresh Produce to Low-Income Areas According to the analyst, "The online grocery industry is already struggling to deliver perishable goods, so it will not go away with acceptance of SNAP, "said Gundelach of Kantar. According to experts, retailers will face additional challenges, including finding safe places to file grocery orders from their customers. Herrmann said that Amazon would offer customers of food coupons several different delivery options. Lack of Internet access in rural and low-income communities could also prevent recipients from ordering good products. 39, online grocery store. ", Noted Racine." The online ordering tool must work well on a cell phone. "
Walmart, Amazon and grocery chains Like ShopRite, we hope to enter a lucrative new market: recipients of vouchers who wish to shop online.
For the first time, the US Department of Agriculture has given the go-ahead for recipients of the complementary nutrition assistance program, called SNAP, to use their benefits to buy food online and have it delivered. home, the agency said Thursday.
Retailers are launching a two-year pilot project in New York, which will allow some of the state's 2.7 million beneficiaries to use their benefits for online grocery orders.
ShopRite and Amazon will serve the New York area, while Walmart will cover the northern areas of the state. Other retailers are expected to join the pilot project in the coming months, and the test will eventually extend to other parts of New York, as well as to Alabama, in the United States. Iowa, Maryland, Nebraska, New Jersey, Oregon and Washington. It is unclear what other grocery chains will be involved.
The USDA said it wanted the 38 million Americans listed in the country's food stamps to be able to shop online, which will make it easier for some mothers to buy food. work, as well as for the elderly and disabled. But the move also opens the market to online retailers.
"People who benefit from SNAP benefits should have the opportunity to shop in the same way as more and more Americans buy products – by ordering and paying for their purchases online," the secretary told Reuters. Agriculture, Sonny Lost. "As technology advances, it's important that SNAP advances as well."
Online shopping today represents a tiny fraction of grocery shopping, but analysts expect a market growth. Amazon, Walmart and others are trying to stand out, as buying meat and products online is becoming increasingly popular among high-income and low-income buyers.
Taking advantage of the $ 63 billion food stamp market could be a big boost for retailers in this area.
The recipients of food vouchers are currently buying a lot in big box stores and grocery chains.
According to the most recent data from the USDA, nearly $ 52 billion, or 82% of all food stamp dollars, was spent at these retailers.
"It was only a matter of time before we saw the benefits of SNAP starting to spill over to the world of online grocery shopping," said Tory Gundelach, an analyst at Kantar.
Main customers
SNAP recipients are already an important customer for Walmart and other grocery stores. In the United States, about 4% of Walmart sales come from food stamp purchases, estimates analyst Michael Lasser of UBS in a report last year. Walmart refused to confirm this number.
Even small changes in food assistance benefits can have an impact on retailers' sales. When the government shut down earlier this year, February's profits were distributed earlier, resulting in increased sales at Walmart and Dollar General.
"A lot of money is being pumped into the food store system via SNAP, so retailers are going to try to maximize that," said Elizabeth Racine, professor of public health at the University of North Carolina. North, Charlotte, who studies food aid policies. .
Yet Walmart and mass merchandisers have lost their share of the food stamp market in recent years to convenience stores, pharmacies, and dollar stores, which are rapidly opening new stores and expanding their product selection. ;grocery. Dollar General, for example, adds sections of products to hundreds of stores in rural and urban food deserts.
Walmart, Amazon and others hope that offering recipients of food coupons the opportunity to buy online will help them stand out from convenient convenience stores and dollar stores that do not offer delivery.
Preparatory work
The new online shopping program has been in preparation for a while. The 2014 Farm Bill invited the USDA to experiment with online shopping.
The USDA is using the announced pilot project on Thursday to deepen technical and safety issues before rolling out the program nationwide. Online purchases using food stamps require a higher level of security to prevent and detect misuse. Program participants can use their benefits to purchase eligible items online, but not for delivery or service charges.
Walmart and Amazon too are preparing for online orders to become a more important part of the food stamp program.
Since 2017, Walmart has been testing a separate pilot project that allows customers to use food vouchers to order their purchases online and then pick them up at the stores. It is currently available in 40 stores. But delivery was not an option in his pilot project.
In the new pilot project announced in New York, Amazon removes premium subscription fees for customers who accept food vouchers who want to buy groceries and essentials through AmazonFresh and Prime Pantry .
"What we are trying to do is strengthen our commitment to making food accessible," said Kristina Herrmann, who oversees Amazon's involvement in the USDA pilot project.
Herrmann did not say how big the market for online use of food stamps should be, but Amazon has spent the last two years preparing for the launch of the USDA pilot project. It was necessary to develop a technology to accept customer payments from the food stamp service and to create new web features for buyers using the program.
Delivery obstacles
Buying groceries online could interest recipients of food stamps living in food deserts in both urban and rural areas, said Racine, a professor at the University of North Carolina. It could also work well for customers who do not have reliable transportation to grocery stores.
However, retailers will have to overcome several obstacles before entering this market.
According to analysts, Amazon and Walmart will face delivery difficulties by shipping fresh produce to low-income areas.
"The online grocery industry is already struggling to deliver perishable goods, so it will not go away with the acceptance of SNAP," said Gundelach of Kantar.
Herrmann, however, said that Amazon would be able to use its existing distribution network to reach food voucher recipients in New York City neighborhoods and rural areas in later phases of the pilot project. .
According to experts, retailers face other challenges, including finding safe places to file customer groceries orders. Herrmann said that Amazon would offer food stamp customers several different delivery options.
Lack of Internet access in rural and low-income communities could also prevent recipients of food vouchers from ordering their errands online.
"Low-income people are less likely to have reliable internet access or computers," Racine said. "The online ordering tool must work well on a cell phone."
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