The U.S. Department of Agriculture plans to launch a two-year pilot program this summer with seven retailers to allow food stamp recipients the ability to purchase their groceries online.
More than 44 million Americans participated last year in federal government’s low-income food assistance program, called SNAP, or the Supplemental Nutrition Assistance Program. Last year, the average benefit each person received was just over $125.50 per month. “Online purchasing is a potential lifeline for SNAP participants living in urban neighborhoods and rural communities where access to healthy food choices can be limited,” USDA Secretary Tom Vilsack said in a release. “We’re looking forward to being able to bring the benefits of the online market to low-income Americans participating in SNAP.”
The pilot program will take place in seven states, in both urban and rural areas.
Online grocery still represents only a small portion of the overall at-home food category but it is growing faster due to the success of companies such as Amazon and others.
Amazon will participate in the pilot in Maryland, New Jersey and New York. The six other retailers selected include: FreshDirect in New York; Safeway in Maryland, Oregon and Washington; ShopRite in Maryland, New Jersey and Pennsylvania; as well as Hart’s Local Grocers and Dash’s Market in certain New York locations.
“Amazon is excited to participate in the USDA SNAP online purchasing pilot,” the Seattle-based ecommerce giant said in a statement. “We are committed to making food accessible through online grocery shopping, offering all customers the lowest prices possible.”
FreshDirect, the Northeast online food retailer, said in a statement, “With the SNAP pilot, we look forward to bringing the online purchasing option to SNAP clients and positively impacting all the communities that we serve.”
Brick-and-mortar chains such as Wal-Mart are aggressively expanding into the online grocery space and also offering both delivery as well as pick-up service at certain locations. Wal-Mart wasn’t listed as one of the pilot participants; CNBC reached out to Wal-Mart for comment.
The department said it eventually anticipates being able to add additional retailers after confirming the “system is operating as required.”
USDA said the retailers selected for the pilot “represent a variety of store types, including national online retailers as well as large grocery chains and smaller, regional networks to appropriately test online SNAP purchasing in different settings.”
Kroger wasn’t immediately available for comment when contacted by CNBC.