The “One Big Beautiful Bill Act”: How Major SNAP Reforms Will Reshape the Independent Grocery Industry

By Stephanie Johnson, Group Vice President, Government Relations & Political Affairs

On July 4, President Trump signed the One Big Beautiful Bill Act, which includedmany ofthetop legislative prioritieshe campaigned on. Extending tax cuts from the 2017Tax Cuts and Jobs Act, the bill also provides increased funding for immigration enforcement andnationaldefense. Topay for the president's priorities, Congress made cuts to Medicaid insurance coverage and the Supplemental Nutrition Assistance Program(SNAP).

Congress made many changes to SNAP,some of which will directly impact SNAPsales, while others will not. Additionally, manyimpacts will be state-specific, which I outlinelater on. It'salso important to note what this bill did not impact,which are the SNAP waivers to restrict so-called "unhealthy food." SNAP waivers are a different topic altogether, and you can learn more about waivershappening at the state level here.

Provisions that Impact SNAP Sales: Eligibility Reforms

The bill includes several provisions that impact eligibility for SNAP participants, including work requirements, utility allowances, internet deductions, and undocumented immigrant participation. The total cuts to eligibility are estimated to total $88 billion over the next ten years.

NGA reviewed the Congressional Budget Office analysis and created Table 1 to help visualize the impacts by year.

Table 1 - Estimated Decrease to SNAP Sales through 2034

The impact will vary based on state demographics andhow quickly statesimplement changes. The changes will be adecrease in SNAP shoppers, not a decrease in SNAP benefits.

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Over the next six months, as SNAP participants are removed from the program, you may see a decrease in SNAP customers, which could impact sales up to 6.7%. Over the next nine years, SNAP sales are expected to decrease on average by 8.7% from the current spending levels.

These are estimates based on the economic impact of SNAP nationwide; the impact on your store(s) may vary depending on the location of your business and the demographics of your community.

WildCard Provisions: State Cost Share Reforms

Under the new law, states will now be required to co-share the cost of SNAP benefits with the federal government. Traditionally, states have split the administrative costs with the federal government 50/50. Starting in 2028, states will be responsible for 75% of the administrative costs and a percentage of the benefits.

The amount states will need to cover will be based on their error rate, or the mistakes made when disbursing benefits. The cost share for states will be as follows:

• States with <6% error rate will pay 0% of benefits

• States with 6-8% error rates will pay 5% of benefits

• States with 8-10% error rates will pay 10% of benefits

• States with >10% error rates will pay 15% of benefits

• States with error rates higher than 13.34% will begin in 2029 or 2030, depending on their 2025 and 2026 error rates respectively.

Click to see your state'serror rate here.

Because the impact tostates can be zeroto billions of dollars, it is difficult to predict what will happenin each state. States do not have the ability to change benefit amounts,but they can change factors that impacteligibility, like asset testing,to reduce their costs. We could see states attempt to reduce furtherparticipation to decreasetheir cost share.

Provisions with Limited Impact to Grocers

The bill ends the national education and obesity prevention grant program. This program provides nutrition education to SNAP participants, often through university extension programs. Additionally, the bill makes future thrifty food plan reevaluation cost neutral. This prevents any large increases moving forward like the 21% increase we saw in October of 2022. The yearly inflationary increases remain intact.

Final Thoughts

The impactsof this legislation will unfold gradually, with immediate effects on SNAP eligibility and longer-term changes in state administration and funding. For independent grocers, the most notable impact will be the potential reduction in SNAP customers, though the degree will vary by location. As states respond to new responsibilities and budget pressures, the grocery industry will need to stay informed and engaged to understand how these policy shifts play outat the local level.