SNAP Changes Impact Consumer Spending Habits

Sweeping changes to the Supplemental Nutrition Assistance Program are expected to reduce EBT funding by about $10 billion in 2026 compared with 2025 and are pushing remaining recipients toward fresher, more deliberate baskets, according to a Circana webinar that examined the program’s first-half impact on consumer packaged goods.

Circana hosted “SNAP in Transition” July 22 to walk retailers and manufacturers through participation declines, category shifts and retailer responses. Sally Lyons Wyatt, Circana global EVP and chief advisor for consumer goods and foodservice, led the session with Daniel “DJ” Joyner, a Complete Consumer consultant at the firm.

State waivers rolled out early in the year, with multiple states launching USDA-approved pilots restricting benefits from purchasing categories such as soda, candy and energy drinks on a phased basis. Federal changes followed, including tougher work requirements that raised the age cutoff to 64; limits on benefit growth; and the elimination of SNAP-Ed, a budget/nutrition/health education program for benefits recipients.

A June court ruling then struck down waivers in five states, halting bans on soda and candy and casting uncertainty over others. The most significant effect has been a decline in participation, which accelerated in the spring following full enforcement of the new requirements.

Lyons Wyatt outlined that fewer participating households mean fewer SNAP dollars flowing through the market, and Circana estimates a reduction in EBT funds in 2026 versus 2025, creating pressure on food and beverage categories.

Participation fell to about 12.5 percent of households in the first quarter, down about 1.6 points and representing a drop of about 2 million households, or roughly 11 percent, year over year. Baskets with SNAP EBT dollars now account for about 7 percent of total retail food and beverage dollars, a shift of about three points versus 2023.

SNAP households spent an average of 1.1 percent more per household versus a year ago on CPG food and beverage in the first quarter – slower than the 4.3 percent growth among non-SNAP households. They put aggregate Q1 CPG and grocery spending at about $43 billion, down about $4.6 billion year over year.

Joyner said SNAP trips leaned further into fresh foods and meal-building basics while pulling back on prepared and convenience options. The refrigerated and produce departments grew as a share of SNAP trips, while deli declined.

Awareness of the changes ran high, particularly among those affected. More than eight in 10 consumers who used SNAP within the past month said they were aware of the new restrictions when surveyed in April, compared with about six in 10 among those who had never used the program.

The clearest behavioral signal came in waiver states. For carbonated soft drinks – restricted in eight states and covering about 1.14 million households – the share of SNAP/EBT trips including the category fell nine percentage points year over year in waiver states, while remaining relatively flat elsewhere.

First-quarter soda spending among SNAP households in waiver states declined, falling from $159 to $146 per household, even as non-waiver states saw about a 4 percent increase.

Circana’s analysis reflects a Q1 snapshot, and the mix of states and implementation timing varied, Lyons Wyatt cautioned, as the industry adjusts to the new environment of SNAP, with retailers moving beyond just accepting SNAP toward digital support.

Some retailers, like Kroger and Walmart, have launched programs offering discounts on fresh produce and other essentials to SNAP recipients, while others, like Albertsons and Target, have introduced loyalty programs and online payment experiences tailored to SNAP households.

These changes will have a lasting impact on consumer behavior and the retail setting.