GR Bonus Episode: Snap, Shutdowns, And The Penny Problem

A 43-day government shutdown turned food policy into a stress test for everyone from federal agencies to front-end cashiers. SNAP benefits were shut off for the first time ever, courts issued conflicting directives, and retailers faced a moving target of guidance while trying to keep communities fed. We sit down with Stephanie Johnson, Group VP of Government Relations at the National Grocers Association, to break down what actually happened, what changed at the register, and how independent grocers adapted in real time.

If food access, checkout operations, and policy risk affect your business, this is your map for what changed and what’s next. Listen, share with your team, and tell us how you’re preparing for state waivers and rounding rules. If you find this helpful, follow the show, leave a review, and send the episode to a colleague who runs the front end.

Government Relations - National Governors Association

Transcript

Meet NGA’s Government Lead

SPEAKER_00 0:00

Welcome to Checkout GR, a bonus episode of the Women Grocers of America podcast, Grocery from Her Seat. Your host, Kristen Popp, speaks with political influencers to understand new legislation, policy debates, and emerging trends. Together, Kristen and her guests explore how we can collectively be informed, take part in the conversation, and shape policies impacting our industry. Now, enjoy your bonus episode of Grocery from Her Seat.

SPEAKER_02 0:27

I'm your host, Kristen Popp, and today I have the opportunity to sit down with Stephanie Johnson with the NGA National Groceries Association to chat on all things government. So, Steph, can you go ahead and uh introduce yourself and your role with NGA?

SPEAKER_01 0:42

Sure. Thank you, Kristen. I'm so excited to join you here today. Um, my name is Stephanie Johnson. I'm the group vice president of government relations here at the National Grocers Association. So I help run our government relations team, which helps that, which means that we help liaise with Congress and the administration on all things grocery policy.

Why The Shutdown Happened

SPEAKER_02 1:04

And Stephanie, you know, you and your team do a fantastic job and uh a lot of moving parts happening in Washington. So appreciate all the work and uh time and effort that you guys put into everything that you do there. I know you guys make a big impact. And so I'm gonna go ahead and dive right in and ask some questions. We just concluded the longest government shutdown in US history. Before we get into the specifics of that, how did it happen and what happens when the government shuts down?

SNAP Halt And Store Impact

SPEAKER_01 1:32

Sure. So this was a very interesting time to be in Washington. Like you said, this was the longest government shutdown of all time. The fiscal year for the federal government runs from October 1st to September 30th each year. And so Congress has to essentially fund the functions of the government by September 30th. And they did not do that this year, which led to a shutdown. The politics that led to this shutdown are basically the Republicans have the House, the Senate, and the presidency. And so Democrats have had very little leverage this year to get any of their priorities through. And what the Democrats tried to use is this must-pass funding bill for the government to secure some of their wins on health care that they've been trying to fund. And so the government was shut down for 43 days, and the Democrats ultimately did not get a resolution on the healthcare issues that they were looking for. So during this shutdown, what happened was basically each department goes through and looks at who their essential staff are, who needs to stay there to keep the lights on. Then they send everyone else home on a furlough, and then all the programs stopped running. And so, because the government was shut down for so long, programs that normally have enough money to carry them during short shutdowns, like a few days or a few weeks, they ran out of money. And that includes WIC and SNAP. And so the USCA was able to move money around to cover the cost of WIC, but they were not able or willing to move money around to cover the cost of SNAP. And so this led to SNAP benefits being turned off for the first time in the program's history.

SPEAKER_02 3:16

So big impact, and obviously that impacts the grocers in a significant way, some more than others, depending on the demographic or the location of the stores that they operate. But can you kind of dive into that a little bit further and what other impacts grocers saw from the shutdown?

SPEAKER_01 3:32

Sure. So you're so correct in that you know it really depends where the store is located. We have members that have very few SNAP purchases, like less than 1%. But we also have members in um lower income areas where they have 50, 60, 70% SNAP purchases. And so when SNAP was turned off, that was a very concerning place for those members. Um, and because SNAP has never been turned off before, no one was quite sure how it would work out. And that included the USDA. The USDA determined, um, I think it was Friday night, October 31st, that they were not going to be able to fund SNAP starting November 1st, and that they were not going to be able to use their contingency fund to support SNAP. And so they were sued by a few different groups, and that kicked off this day by day, hour by hour, back and forth chaos that we all experienced with some courts saying that they had to push out partial benefits, others saying they could push out the full benefits, and then other courts stopping all the action altogether. So some states ended up releasing the full benefits while others ended up pushing out partial benefits. And again, this just led to confusion all around. We kept a list of what each state was doing and really did our best to keep folks apprised of the changing situation, especially because it was changing so quickly.

Courts, Chaos, And State Variations

SPEAKER_02 5:08

It was definitely changing very rapidly. And so to try and navigate that was a new opportunity that we haven't had to face. But how did you see independent grocers step up and serve the communities during this crisis time?

SPEAKER_01 5:22

We have so many wonderful members. Some of them donated money and some very large amounts of money to food banks, while others were able to give out gift cards to low-income households. And really, each of our members is so involved in their communities, they were able to find the right solution that worked best for their shoppers. So it was really impressive to see what our grocers were able to do and step up and really support folks during this difficult and confusing time.

SPEAKER_02 5:50

So you touched on as the shutdown happened, it's looked at what's needed to keep the lights on. And so obviously, some of those functions of government shutdown or pause during that shutdown time. What do you think will be some of the longer-term impacts from this specific shutdown?

SPEAKER_01 6:08

So I think the shortest long-term impact is really gonna be SNAP authorizations, right? 43 days without any SNAP authorizations has created quite a significant backlog. And so for anyone that has new stores coming up or maybe open during that time, you know, they're gonna have to wait a longer period than they normally would to get their authorization approved, unfortunately. And so as the USCA works through that backlog, we'll do our best to try to shepherd authorizations through. But again, they're 43 days behind and it can take several months for them to catch up. I think the biggest overall long-term impact that we're gonna see is a lack of trust in the program by the USCA, by retailers, and by participants. I think everyone kind of got burned in this process. And I hope that we're able to all learn from this as a community and an industry and be prepared if this ever happens again.

SPEAKER_02 7:07

There was really no plan to understand how to navigate it. So should we end up in the space again, what does that look like? And is this something that you think could happen again?

Grocers Supporting Communities

SPEAKER_01 7:18

Yes, so this is something that can definitely happen again. The reason it's possible is because SNAP is what's called an appropriated entitlement. So that means that everyone that is eligible for SNAP is entitled to those benefits. Similar to Social Security and Medicare, there are specific eligibility requirements, and if you meet those requirements, you're entitled to that benefit. But unlike Social Security and Medicare, SNAP is appropriated. So that means that every year Congress looks at how much money SNAP needs and they give SNAP that money. Whereas Social Security and Medicare are they just automatically get funded through mandatory funding. And so Congress never really has a chance to review the expenses, which is why you know there's a lot of concern about the spending in those programs. But all of these are entitlement programs, and so folks are entitled to the benefits if they're eligible. But I'm really hopeful that the government is able to work together and avoid issues like this in the future, especially because SNAP is so important, right? Food is foundational to functioning every day, and so we really want to make sure that folks that need it are able to eat.

SPEAKER_02 8:30

Stephanie, earlier this year, Congress passed the One Big Beautiful Bill Act. Included in the bill were some pretty drastic changes to SNAP funding and the way the program is administered. Could you go through these changes and what their impact on the industry will be? Sure.

Backlogs And Long-Term Trust

SPEAKER_01 8:44

The One Big Beautiful Bill Act, also known as OB3 or HR1, it's going by a lot of different names here in Washington, made kind of two big buckets of changes to SNAP, impacts to SNAP sales, and policies that won't impact SNAP sales. The biggest section of the bill that will more directly impact SNAP sales will be from the changes in eligibility. They made four different changes in eligibility in the one big beautiful bill, and that those changes are work requirements, internet deductions, utility deductions, and then what legal immigrants are able to access SNAP. Together, those changes will remove about$90 billion from the program by um removing participants from the program that should decrease SNAP sales around 9% over the next 10 years. So that's those are estimates. It'll really depend on where your store is located. But we are gonna see reductions in SNAP sales over time. The rest of the changes really impact how the program is funded. And what the federal government did is they shifted significant portions of the SNAP costs to states. And so states are gonna have to figure out how to come up with this money. So that means states are gonna have to shift their state budgets and try to find a lot of extra money to fund this program. For folks that want to learn a little bit more, I have a blog summarizing this bill and its impacts to SNAP on the NGA website. If you want to take a deep dive, because we spend a lot of time with this bill and there's a lot in there.

SPEAKER_02 10:28

There's definitely a lot to unwind in there. In addition to the changes at the federal level, we've always seen also seen numerous states apply for SNAP restriction waivers, and a dozen have been approved. Can you walk us through what these waivers look like and and do and how NGA is preparing grocers for their implementation?

SPEAKER_01 10:47

Sure. Another big issue we're facing in SNAP is these restrictions. 12 states have had their SNAP restriction waivers approved. That means that states are going to limit what foods SNAP participants can buy with their benefits. So unfortunately, each state has a different definition for which foods they are planning to exclude from the program, but most of them center around soda and candy. We've created a SNAP waiver tracker on our website. So if you go there, you can take a look at the states that you operate in, what the implementation date is, what the food definitions are, and any specific impacts to grocers. We are updating that tracker almost every single day. We're also going to be uploading resources as they're released. So whether that's a UPC list or signage for retailers, and we're going to have links for those things on there. And we're also working to help develop a UPC list for folks so they're able to better or more easily implement these restrictions. This has been a place where we've been incredibly active and trying to work with state associations and states directly to limit the harmful impacts of these policies as much as possible for our members.

Could SNAP Halt Again

SPEAKER_02 12:04

Well, and you mentioned the definitions change, which presents its own challenge. And then when you have to position a cashier to notify a SNAP eligible participant that something that they have doesn't qualify, that can also cause a lot of different opportunities, to say the least. So just another significant impact to the grocers that we need to be paying attention to and understand and realize how that's going to impact the end user at the checkout because it definitely does have that impact. So kind of shifting here a little bit, I want to get your two cents, no pun intended, on something that's been all over the news lately. Uh, the penny. So despite the minuscule size of the coin itself, the penny shortage looms large over retail. Can you explain how this happened?

SPEAKER_01 12:54

Sure. So um over the years, different presidents, different members of Congress, everyone's talked about getting rid of the penny. Um, but earlier this year, Trump tweeted that he was finally going to do it. He was going to get rid of the penny. And so um once that tweet went out, um, it seems as though the Treasury took that as a directive and they stopped minting the penny in May. So that means they stopped shipping those out to the Federal Reserve where um banks pull from for their pennies. And so, really, what happened is they stopped as minting and didn't tell anyone. And so we were kind of all just surprised when the Federal Reserve started running out of pennies. And so this has led to a rapid decline in access to pennies for stores to make change. One of those issues that kind of really pops up out of nowhere where you like knew it was coming, but you didn't know it was an emergency until it is an emergency. And so that's kind of where we're at right now.

OB3 Bill: SNAP Changes

SPEAKER_02 13:50

Uh, you couldn't be more wrong with that statement. It was on my radar, you know, for us as a retailer, but uh not necessarily as quickly as it needed to be. Right. Um, and so you know, with no notice, not getting your coin deliveries, and you get notified that day that the penny is not being delivered, you definitely have to pivot and make some uh quick decisions on what you're gonna do. So what impacts have you seen at the NGA? You guys have the broader perspective. What what impacts have you seen on the shortage on retail?

SPEAKER_01 14:24

Sure. So because the government stopped minting the penny without telling anyone how they were gonna handle rounding, stores have kind of been left to make those decisions on their own. And it's been hard for us to give rounding guidance because we don't want to tell folks one thing and they change their systems, and then we have to give them something different, right? Because there is no formal guidance on this. And so what we've seen stores doing is some stores are rounding down in favor of their customers, some stores are rounding up and giving the proceeds to charity, and then others are rounding similar to how we round, you know, learn to round in elementary schools. So your one, two, six, and seven are rounded down, and your three, four, eight, and nine are rounded up.

SPEAKER_02 15:08

And uh yeah, it is all over the board with no guidance. And there's also some bills that have been introduced, such as like the Common Sense Act, that could have a uh uh implication on how that is determined through retail as well, correct?

SPEAKER_01 15:23

Yes. So the Common Sense Act, we've been working with Congress kind of back and forth on what that's gonna look like. But I think we're in a really great place now where they are gonna handle rounding, they are gonna officially end the penny and different things like that. And they're gonna fix some of these legal pitfalls that we have been warning our members about, which happen around state and local taxes, paycheck check, paycheck caching, and SNAP. And so all of those transactions require exact change. And you know, we were worried about our members' liability when it came to um any issues that they might have by not being able to give exact change on those types of transactions. So we're really hoping the Common Sense Act is able to pass both the House and the Senate this year and provide national guidance so all retailers are able to follow the same rules.

SPEAKER_02 16:17

So, Stephanie, as we'd like to wrap up, I just have two more questions for you. What would you say have been NGA's biggest wins for this year?

State Waivers And Restrictions

SPEAKER_01 16:25

Sure. The biggest win we had this year was extending the tax cuts in the Big Beautiful bill. So even though the Big Beautiful bill made some changes to SNAP that we didn't love, it did extend all those tax cuts from 2017 that have been hugely important for our members. So we're really excited to see most of them made permanent. If that bill hadn't passed, most folks would have seen a dramatic increase in their tax bill come January. And so we are just so thrilled to see those pieces included in the Big Beautiful bill. Additionally, while the snap cuts in the Big Beautiful bill are bigger than we would like, they were going to be even bigger. And so we were able to reduce the the impact to SNAP on the Big Beautiful bill. And so we're really excited to get those final changes in the final text.

SPEAKER_02 17:17

Well, and again, I know I mentioned at the beginning, but you and your team and uh everybody at the NGA does quite a bit of work and constantly in meetings, constantly trying to keep up on the changes and the moving parts and everything happening there in Washington. So truly appreciate the impact that you make. And then Stephanie, as we look to 2026, what what do you see things uh and how do you see them going next year in the upcoming calendar year?

SPEAKER_01 17:42

Sure. So the good thing is SNAP is funded through the end of September next year, and next year is an election year. I feel confident saying that they're not going to not fund SNAP again. I'm hopeful that we don't have to worry about those issues at the moment. I think what we'll see a lot more of is the Maha movement and folks looking at how make America healthy again. Policies can be integrated into the retail space. And so I think there's a lot of exciting ideas to look forward to there. We're also seeing some regulations on the food side about stocking standards and SNAP, and um, I think we're gonna get some sort of definition on ultra-processed foods, which also might impact SNAP. And there's definitely some opportunities and threats on the Maha side. I think we're also getting to strong support for our antitrust legislation in different states across the country, and so we're looking at pushing that out further. So I think there's a lot of opportunities there, and hopefully the penny issue will be solved by next year so we can spend that time working on other issues that are impacting members like energy costs and labor. 2025 has been quite a surprising year, but we could see another big reconciliation bill in 2026. Um, we're just going to be prepared for whatever comes at us. But um hopeful that we'll have another um great year for NGA members.

SPEAKER_02 19:08

Well, and rest assured, it will be a lot of moving parts that we need to stay up on. So I will look definitely look forward to our next update. Stephanie, thank you so much for sharing your time with us today. I appreciate all the key points that you've uh brought us up to speed on that we need to be paying attention to and the impacts that they have and you know just what we need to be keeping our eye on. So I look forward to connecting on our next uh GR update and keep up the great work you guys are all doing over there in Washington.

SPEAKER_01 19:36

Thank you, Kristen. Thank you so much for having me.

Checkout Friction And Training

SPEAKER_00 19:38

Thank you for tuning in to Check Out GR, a bonus podcast episode of Women Grocers of America. We hope today's conversation inspired you to be more engaged with the policy issues shaping our industry. Subscribe to Grocery from Her Seat for more insights and conversations with women leaders in the grocery world. Stay informed, stay engaged, and share Grocery from Her Seat on your favorite podcast listening platform.