Trump budget’s ‘Blue Apron-style’ SNAP proposal raises industry eyebrows
A small section of the White House’s proposed budget for fiscal year 2019 could have big implications for recipients of the Supplemental Nutrition Assistance Program and food retailers. As part of President Donald Trump’s proposed changes to the Dept. of Agriculture — which include a 16% decrease in its budget from the 2017 enacted level — is a plan to send food benefits directly to beneficiaries’ homes that White House director of the Office of Management and Budget Mick Mulvaney compared to Blue Apron.
The effort, which the USDA has officially dubbed America’s Harvest Box would impact roughly 81% of SNAP households, or 16.4 million households that receive $90 or more per month in SNAP benefits. The USDA projects that the box will make up roughly half a household’s SNAP benefits, with the remainder delivered via Electronic Benefit Transfer card.
The USDA’s fact sheet, published by Agri-Pulse, notes that this effort has the potential to save $129.2 billion between FY2019 and FY2028. In a press briefing on Monday, Mulvaney highlighted the savings to the government from the program.
“It lowers the cost to us because we can buy prices at wholesale, whereas they have to buy it at retail,” Mulvaney said. “It also makes sure that they’re getting nutritious food. So we’re pretty excited about that. That’s a tremendous cost savings.”
CNBC reported that SNAP purchases drive 7.5% of overall supermarket sales, according to Customer Growth Partners. The Food Marketing Institute’s chief public policy officer Jennifer Hatcher on Monday noted that the proposal “makes major changes, but not changes that SNAP-authorized food retailers see as positive or even efficient.”
“FMI and our members have worked with the House and Senate Agriculture Committees and the USDA over several decades to achieve a national system, utilizing existing commercial infrastructure and technology to achieve the greatest efficiency, availability and lowest cost,” Hatcher said. “As we understand the proposal in the President’s budget to create a USDA commodity foods box of staples, each of these achievements would be lost.”
Hatcher also noted that while the savings from “Perhaps this proposal would save money in one account, but based on our decades of experience in the program, it would increase costs in other areas that would negate any savings.”
Indeed, one of the most potentially costly questions — that of fulfillment — is an open question for the program. “States will be given substantial flexibility to distribute these food benefits to participants. States can distribute these boxes through existing infrastructure, partnerships, and/or directly to residences through commercial and/or retail delivery services,” the USDA fact sheet said.
Hatcher said, “As the private partners with the government ensuring efficient redemption of SNAP benefits, retailers are looking to the administration to reduce red tape and regulations, not increase them with proposals such as this one.”
Walgreens, AmerisourceBergen in acquisition talks: reports
Updated Feb. 13, 1:03 p.m.
Walgreens Boots Alliance reportedly is interested in a potential acquisition of AmerisourceBergen. Representatives of WBA CEO Stefano Pessina reached out recently to AmerisourceBergen CEO Steve Collis’ representative about acquiring the roughly three-quarters of the distributor that WBA doesn’t already own, according to the Wall Street Journal, which cited people familiar with the matter.
According to the WSJ report, the companies are in early talks to combine, though sources reportedly stressed the uncertainty as to whether there would be a deal. As a result of the report, AmerisourceBergen shares increased roughly 12% after market close. In response to Drug Store News inquiries, Walgreens declined to comment on the news, and AmerisourceBergen said the company’s corporate policy is not to discuss rumors or speculation about possible mergers or acquisitions.
News of the potential combination of the companies — which recently added three years to their 10-year distribution partnership through which Walgreens Boots Alliance gained a roughly 25% stake in Valley Forge, Pa.-based AmerisourceBergen — comes as CVS Health is in the midst of its $69 billion acquisition of health insurer Aetna. Both moves come as Amazon continues to make overtures in the healthcare space — forming an insurance company with Berkshire Hathaway and JPMorgan Chase for the three companies’ employees and steadily acquiring pharmacy wholesale licenses in various states.
Walgreens’ market cap was $67.8 billion and AmerisourceBergen’s was $19.6 billion as of Feb. 12, according to Nasdaq.
Walmart’s app update to streamline in-store shopping
Walmart is making it easier for customers to plan their in-store shopping trips.
The discount giant is updating its mobile app with new services designed to streamline the in-store shopping experience. All upgrades will be featured through a feature called Store Assistant, which will be activated when customers walk in the door.
The new services include list-building capabilities that enable customers create shopping lists, and real-time access to stock availability — as well as product location — at a customer’s local store. It also calculates the cost of the shopping list.
The app also features “Store Maps,” a service the serves up maps unique to each of the chain’s 4,700 stores, as well as the aisle and shelf location of specific merchandise. The feature is already available for a handful of stores, and will be rolled out chainwide. It also highlights specific store departments, as well as operating hours and phone numbers.
The additions augment other features added last year, such as a prescription refill tool and the ability to wire money. In November, Walmart also added Mobile Express Returns, which enables online customers to begin the returns process in their app before even heading to their local store.
“We’re building a shopping tool unlike any other in retail – and one that makes virtually every element of the store shopping experience faster and more convenient,” said Daniel Eckert, senior VP, Walmart services and digital acceleration. “We’re excited about the Walmart app updates we’re launching this week, but we’re even more excited about what’s to come.”
For example, the app will give customers the ability to “drop pins” on a store map — a move that will help them more easily locate specific items on their shopping lists. It will also enable customers to book services — like an oil change — in advance. Walmart is also exploring the integration of artificial intelligence, which will enable the company to automatically create lists for its customers, according to the company blog.