Big cuts are coming to the Supplemental Nutrition Assistance Program.

As changes Congress made to SNAP in the “Big Beautiful Bill” phase in, including new work requirements, new paperwork requirements, and new requirements that states foot some of the bill for the food assistance program, more than half of the 42 million people who rely on SNAP could lose some or all of their benefits. 

That will not just affect their ability to afford groceries, it will also affect the stores where they buy those groceries. 

“I think most people don't recognize how many of the businesses, and especially food establishments in their communities, are bolstered by SNAP dollars,” said Lily Roberts, managing director for inclusive growth at the Center for American Progress. “SNAP is an incredible boost to local economies.”

Bill Hagedorn is worried about the cuts to the program. He manages Axis Natural Foods, a small, family-run store in the city of Auburn in central Maine that his in-laws started 55 years ago.

“We have a very economically diverse customer base,” Hagedorn said. “The Lewiston-Auburn area is a more affordable place to live than some places in Southern Maine. And so we do have customers who are very on a strict budget and coming in and looking for healthy food at a fair price.”

About 17% of people in Androscoggin County, where the store is, are low enough income that they qualify for SNAP benefits. For a single person, that’s about $30,000 a year or less.

“It's a significant part of our business,” Hagedorn said. “We are a very small business, and the grocery industry in general operates on very low margins. So every aspect of our customer base, every aspect of our revenue is critically important to us to survive.”

And any loss of customers, and revenue, “is a significant detriment to our business.” 

More than 27,000 retailers around the country are likely to be hit particularly hard by the coming cuts to SNAP, because they’re located in an area where a high percentage of people receive food assistance, according to a recent analysis from the Center for American Progress. That includes businesses ranging from farm stands to big box stores. 

“We're assuming that most of the effect will be on smaller stores,” Roberts said. “Because independent retailers, farm stands, bodegas, family-run businesses, many of them are hanging on by a thread.” 

SNAP accounts for about 12% of all grocery sales nationwide. For some stores, it’s much more than that, particularly in rural areas and in poorer neighborhoods in big cities.

“We have members that are in low-income communities, and they may have over 50, 60, 70 percent of their sales are from SNAP,” said Stephanie Johnson, vice president of government relations at the National Grocers Association. “For some, the stable SNAP benefits are what make it possible for them to open in those underserved communities and stay resilient.”

Now that the program is facing cuts, that loss of revenue may be enough to cause some stores to close. Those closures would ripple through the economy. 

“You can look at the supply chain in reverse, from table to farm,” said Greg Silverman, CEO and executive director of the West Side Campaign Against Hunger in New York City. 

When families lose SNAP benefits, they will have less money to spend at grocery stores, which means those stores will also start buying less from wholesalers. 

“And they're going to start purchasing less,” Silverman said. “You take that all the way back to the farm, and the agriculture sector — processors and farmers are going to be selling less product. So you're talking all the way along the food supply chain, you're going to see slashing of jobs.”

For small business owners, the cuts to SNAP are also not happening in a vacuum. In the last five years there’s been a pandemic, supply chain issues, and inflation, now there’s the uncertainty around tariffs and this coming loss of previously-stable revenue. 

“There is kind of a conflux of events that are coming together that make it more challenging for small businesses to continue to operate at a decent profit,” said Bill Hagedorn at Axis Natural Foods.

It’s a lot for an independent, family-run store in an industry where profit margins are usually about 1%-3%.