The Merc Co+op started in Lawrence in 1974. It originally was a group of neighbors who pooled money together to buy foods like eggs, milk and fresh produce in bulk.
The group’s original goal was to ensure neighbors had access to healthy foods that weren’t always available for a good price. Eventually, the Merc opened a grocery store with that same mission. But grocery stores like the Merc face a cloudy future because of federal cuts by congressional Republicans signed into law by President Donald Trump.
The One Big Beautiful Bill will cut food assistance to Kansas, with one recent estimate saying 27,000 Kansans would be kicked off the Supplemental Nutrition Assistance Program.
Laura Marsh, marketing director at the Merc Co+op, said 5% of total sales at its Lawrence and Kansas City, Kansas, locations were paid through SNAP.
“In grocery, where margins are tight, small dips can have a big impact,” Marsh said over email. “Cuts to SNAP — particularly at this scale — will be deeply felt.”
Families losing benefits will face hard choices while budgeting and have less purchasing power in neighborhood grocery stores, Marsh said.
She’s not alone in her concern.
A recent Associated Press-NORC Center for Public Affairs Research survey found that 53% of adults say grocery prices are a major source of stress.
The nonprofit Food Systems for the Future held a virtual panel in July where grocery stores across the country sounded similar alarms.
A South Dakota-based grocery store said 60% of sales at some stores come from SNAP. Another Milwaukee-based store said 68%-71% of its customers use the Special Supplemental Nutrition Program for Women, Infants, and Children.
SNAP cuts will increase the number of food deserts, limit food access and reduce the numbers of grocery stores, research papers and experts told The Beacon. What isn’t known is to what extent that will happen.
A full grocery store parking lot and long lines at checkout may seem to suggest that grocery stores are making money. Some do, but stores usually have a 1%-2% net profit margin, said Stephanie Johnson, group vice president at the National Grocers Association.
Johnson said labor is a major cost. So too are refrigeration costs and credit card fees.
She said stores average about 12% of sales from food assistance, while some depend on food assistance for as much as 70% of sales. Some percentages are so high because stores use SNAP data to determine if a grocery store in that location will stay open.
“Those grocers in those low-income communities will really be fighting for their lives,” she said.
The recently approved budget bill cut food assistance in a handful of ways. It shifted millions in costs to states, which could be about $56 million more per year for Kansas. Kansas would lose all SNAP funding if it doesn’t pick up that additional cost.
The bill also imposed work requirements and kicked undocumented immigrants off the program.
Bekah Selby-Leach, director of the Center for Economic Development and Business Research at Wichita State University, said these reductions would mean more grocery stores close. But there isn’t a good estimate for exactly how many will shut down, or where. Rural areas will be hit hard, but that doesn’t mean urban areas will remain untouched.
“The answer to that is a little bit nuanced,” she said.
Researchers from the University of California, Davis Center for Poverty Research said SNAP’s original implementation decades ago increased sales at grocery stores by 1%-2%. SNAP increased grocery store employment by 3%-5%.
SNAP was created in the 1960s. Its creation meant “more people working in food and grocery stores, more employment, higher real payroll and higher real sales,” the 2020 research paper said.
The program had benefits both for people on the program and off the program, they concluded.
Maurice Wince, a grocery store owner in Milwaukee who spoke on the July panel, is hopeful his store will stay open.
He has the only grocery store within a two-mile radius, and five grocery stores nearby have announced they are closing.
Even if he stays open, there is constant risk that he must raise prices and reduce hours to stay afloat. But losing a large chunk of his business is just not sustainable.
“We combat childhood obesity, cholesterol, diabetes, heart disease and other heart ailments by bringing fresh fruits and vegetables to our customers,” he said.
This story was originally published by The Beacon, a fellow member of the KC Media Collective.
