New rules are coming for Supplemental Nutrition Assistance Program (SNAP) benefits, often known as food stamps.
In addition to new federal changes to SNAP recipient eligibility requirements, many states are rolling out restrictions on the types of food eligible for SNAP purchases to cover only “nutrient-dense” foods, such as fresh produce, lean proteins, and whole grains, and restrict items like soda, candy, or certain processed foods.
The State-by-State Changes
As of now, 12 states are enacting their own restrictions and receiving federal waivers to do so. Find the current list of state SNAP restrictions on the USDA website. Here are some examples:
- West Virginia is removing soda from its SNAP coverage as of January 1, 2026. West Virginia’s Bureau for Family Assistance (BFA) says it will help implement SNAP retailers comply with the new requirements before the deadline.
- Florida will remove soda, energy drinks, candy, and prepared desserts from its SNAP eligibility effective Jan. 1, 2026.
- Texas will remove candy and sweetened drinks (explained as drinks that contain artificial sweeteners or five grams or more of added sugar) from SNAP eligibility come April 1, 2026.
The Total Impact of Proposed SNAP Restrictions
According to a recent report from the Food Industry Association (FMI), the National Association of Convenience Stores (NACS), and the National Grocers Association (NGA), U.S. food retailers combined could face:
- $1.6 billion in one-time costs – from software upgrades to staff training constraints
- $759 million per year in ongoing costs – maintaining new systems, annual FTEs, and cross-functional complexities
These added costs are a big deal for a low-margin industry that’s already under extreme pressure from inflated food prices, more conscientious consumer spending, and tariffs on overseas suppliers.
What One-Time Costs Do Retailers Face as a Result of SNAP Restrictions?
Mainly around technology and staff relearning, these are the individual up-front investments that food retailers can expect to face in order to comply with the new SNAP rules.
- Point-of-sale (POS) updates and relabeling: Food retailers will require anywhere from 20-40 added hours per week (for smaller format grocery stores) to over 100 added hours per week (for supercenters) of implementing changes to POS scanners and product labels.
- Upgrading integrated systems: Many retailers will need to invest tens of thousands of dollars into new software integrations. Supermarkets, though, are looking at massive projects (over six figures) to update their software to integrate with inventory-management systems.
- Retraining staff: Checkout line staff at most food stores are predicted to spend 20 more person-hours per week learning the new SNAP restrictions and POS software changes. Add this onto an anticipated dip in productivity and customer service as customer-facing staff are consumed by retraining.
What Ongoing Costs Do Retailers Face as a Result of SNAP Restrictions?
These are operational costs food retailers can expect to add to their ongoing budgets in continual compliance with the new SNAP changes.
- Maintaining new systems: Continually updating POS and inventory software with SNAP nuances will remain a significant operating cost and time constraint for all food retailers.
- Hiring staff: Additional personnel will need to be hired to ensure compliance with the new rules. Supermarkets will bear the biggest impact here, expecting up to 10 new annual full-time employees needed for this enforcement.
- Customer and revenue loss: Though out of the retailers’ control, the new SNAP restrictions on previously covered food items are likely to frustrate customers, who may either choose to shop elsewhere or purchase less from their previously go-to retailers.
- Marketing burdens: New labels, catalogs, weekly ads, and more marketing materials will get extremely complicated as restrictions may vary even more state-to-state.
- Legal risk: Mislabels can happen anywhere, but the new SNAP rules mean that mistakes could lead to hefty regulatory fines…or even loss of eligibility.
Main Takeaways for Food Retail Leaders:
If you’re a food retailer, or a wholesaler to food retailers, here’s what you need to be thinking about in regard to SNAP changes:
- Costly Software Changes: Updating scanners, labels, inventory systems, and software integrations will be a major IT project, particularly for supercenters and supermarkets.
- Labor Implications: Most food retail staff, from the cash register to stocking and elsewhere, will be burdened with learning and implementing the new rules. Smaller-format grocery stores and convenience stores will feel the impact on staff the most.
- Compliance: Ensuring compliance is more than just a new product label; it’s connecting all internal functions, such as supply chain operations, marketing, retail, procurement, and legal, to the complicated web of consistency and ensuring a clear customer experience.
- State-by-State: Some states are moving forward with faster timelines and state-specific waivers. Understand the changes in your regions of operation, and inquire of state-offered assistance to implement technology changes in advance of the compliance deadlines.
The grocery industry is facing increasing levels of risk and uncertainty from suppliers, government regulations, and consumer behaviors. In an industry where single digit profit margins are a given, leadership teams are working harder than ever to maintain the metrics that matter to their stakeholders, while appealing to customers and associates at the same time. Technology may be the only way to satisfy all constituents and some of this technology will challenge existing norms and standards. – Scott Zahn, Productivity Advisor, Mountain Leverage
Looking for Next Steps?
While the numbers sound grim, the new SNAP rules could also open the door for innovation in compliance and efficiency. Retailers and wholesalers that embrace integrated, automated solutions can turn a burden into a competitive advantage and position themselves as trusted partners in healthy food access.
For example, this specialty food retail distributor capitalized on a moment of regulatory changes to drastically improve food picking processes, implement a new WMS, and adopt new data traceability solutions – all under a tight timeline and high consumer demand. How? They had a strong supply chain technology partnership with Mountain Leverage.
Mountain Leverage has been designing efficient compliance solutions for food retailers and wholesalers for over two decades. Our solutions can help you offset the regulatory burden, protect profit margins, and automate the most labor-intensive food retail costs amid growing pressure across the industry. Reach out today to get ahead and learn more about your options.
