Wal-Mart Stores Inc. has introduced a program that will enable food stamp recipients to order groceries online and pay for them at the store through the company's pickup service.
The Bentonville-based retailer opened the online grocery pickup option last week for consumers who use Electronics Benefits Transfer cards at five locations. The cards are used to distribute funds for government assistance like the Supplemental Nutrition Assistance Program, the Temporary Assistance for Needy Families and Women, Infants and Children programs.
"Everyone deserves this kind of satisfaction," Mike Turner, Wal-Mart's vice president of U.S. e-commerce operations, said in a blog post on the company's website. "Convenience shouldn't be dictated by the way you pay."
Supplemental Nutrition Assistance Program recipients using Electronics Benefits Transfer cards currently are required to pay for their purchases at the "actual time and place" of sale, according to regulations. Through Wal-Mart's new option, customers who use the cards can order groceries online, then pay for them when they collect their order at the pickup location. A Wal-Mart employee will carry the groceries to the customer's car and scan the card for payment.
The practice is being tested at a store in Texas, and at four stores in Boise, Idaho. Turner said the company plans to extend the service to "more markets through the holiday season and beyond."
Analysts said opening the door for customers who use food stamps to order groceries online makes sense for Wal-Mart, which is planning to have its grocery pickup service available at about 1,100 U.S. locations by the end of the fiscal year.
The retailer continues to invest heavily in programs and services intended to make shopping more convenient for customers as it competes against retailers like Amazon.com.
Carol Spieckerman, a retail consultant and president of Spieckerman Retail, said the Electronics Benefits Transfer cards announcement is another example of Wal-Mart "building a bridge to underserved customers."
"Wal-Mart knows that low-income shoppers are migrating to digital in droves and, with dollar stores still sitting out the click-and-collect opportunity, Wal-Mart stands to benefit mightily from this move," Spieckerman said. "The entire industry will benefit at the end of the day as Wal-Mart indoctrinates these shoppers to the ease of digital shopping."
The Supplemental Nutrition Assistance Program provided nearly $67 billion in benefits to about 44 million Americans last year. Wal-Mart was one of the largest beneficiaries. The retailer generated about $13 billion in sales from shoppers who used the program, according to the Wall Street Journal.
The U.S. Department of Agriculture -- which oversees the food stamp program -- launched a 2-year pilot program over the summer to test online ordering and payments for eligible items. Seven retailers, including Amazon and New York-based FreshDirect, participated in the initial announcement in January. Wal-Mart later joined the companies participating in the pilot program.
Amazon has made other efforts to attract Electronics Benefits Transfer card users. In June, the company began offering discounts on Amazon Prime -- its subscription-based service -- to U.S. residents who are receiving government assistance. The program reduced the cost of a Prime subscription from $10.99 to $5.99 a month for up to a year with the ability to cancel at any point.
Brian Yarbrough, a retail analyst with Edward Jones, said at the time that he didn't believe Amazon's move would have a big impact on low-income shoppers. But he also said Wal-Mart would need to continue finding ways to keep those customers satisfied or risk losing business to other retailers.
Yarbrough said he's not certain there's a big market for low-income consumers to shop for groceries online yet as Wal-Mart opens its pickup service to Electronics Benefits Transfer card users.
"It's a very important customer," Yarbrough said Thursday. "They don't want to see that customer go elsewhere. I'm just not sure that this is going to mean much. We'll have to wait and see."
Carlos Calderon delivers groceries to a customer in May at a Bentonville Wal-Mart. The retailer recently opened the online grocery pickup option for consumers who use Electronics Benefits Transfer cards at five locations.
SundayMonday Business on 09/24/2017
Print Headline: Wal-Mart tests food-stamp plan