SNAP: Food Stamp Participation Decelerates

Takeaway: Dollar stores like $FDO and $DG rely on customers using food stamps to boost revenue. Fewer people on food stamps is a negative for them.

One of the most unique metrics out there is the Supplemental Nutrition Assistance Program (SNAP) participation rate. SNAP is a fancy term for food stamps and the rates had peaked a few months ago with nearly 15% of the country enrolled in SNAP. The latest stats dropped yesterday and participation growth is continuing to decelerate.

One sector that relies on a high SNAP participation rate is dollar stores. Think about it: dollar stores are basically taking in a boatload of federal cash as people on food stamps hit up Dollar General (DG) and Family Dollar (FDO) for their milk, bread, beans and other necessities. It’s been a boon for dollar stores, helping to drive comps, sales and traffic. If the SNAP participation rate continues to decline at an accelerating rate, dollar stores will likely see a decline in the aforementioned metrics unless they can make up for the lost SNAP customers.

SNAP: Food Stamp Participation Decelerates - SNAPrates