Since February when the US tightened eligibility requirements on food assistance, the number of groceries US shoppers buy has dropped so significantly that it is even dragging down sales, which until recently have been buoyed by price hikes, according to market data.
What groceries Americans buy, where they shop and how they seek value have also shifted dramatically since the passage of HR 1, known more colloquially as the “One Big Beautiful Bill Act,” on July 4, 2025. The law substantially altered who qualifies for benefits under the Supplemental Nutrition Assistance Program.
The budget reconciliation law expanded work requirements for adults through age 64 years, eliminated exemptions for veterans, people experiencing homelessness and youth transitioning from foster care. It also required many caregivers of children 14 years and older to meet work requirements that historically did not apply to adults with dependents. Among other changes, it also eliminated coverage for many humanitarian immigrants, including refugees and asylees.
As a result, within months of going into effect Feb. 1 and enforcement beginning March 1, the number of households using SNAP dropped dramatically. In March, participation was down about 10% and by May it was closer to 14% compared to the same period last year, according to Circana.
At this rate, Circana estimates total electronic benefit transfers for SNAP funds will fall by $10 billion in 2026 vs 2025 due to lower participation.
“The impacts of HR 1 will be felt throughout our communities,” according to the Food Research & Action Center. It notes in a report released this month the brunt of the cuts will fall on the poorest 20% of people in the US by an average of 3.8%, and it predicts over the next decade a decline in household food purchases could cost farmers $24 billion.
How are SNAP cuts impacting grocery sales?
The fallout will hit grocers more immediately. FRAC predicts that within six months, as participants lose access to SNAP funds, “small grocers could see sales decline by as much as 6.7%.”
The decline in grocery volume accelerated sharply after the SNAP changes took effect, according to Bain & Company’s analysis of NielsenIQ data. Year-over-year grocery volume fell 2% in February, followed by declines of 0.4%, 2.2%, 1.9% and 1.8% in each of the following months through June.
While volume declines began long before the changes to SNAP, the monthly drop was significantly sharper. For example, in May 2025 the percentage change in volume fell 0.1% compared to 1.9% this year. Likewise, in June 2025 it was up 0.1% compared to a drop of 1.8% this year.
The drop may appear even more significant to retailers and manufacturers because price increases have not kept pace, according to Bain & Company’s analysis.
“Our analysis of NielsenIQ grocery data shows a trend in negative unit growth starting in mid-2025, masked by steady price increases. But since February 2026, units have stepped down sharply enough to pull sales lower across the US,” it notes in recent report.
“Prices are still climbing 2% to 3% year over year, roughly in line with food-at-home inflation, while units are about 2% year over year in most months since February,” it adds, explaining, “pricing growth and inflation can no longer hide that shoppers are buying fewer items.”
Indeed, year-over-year monthly sales growth has been slashed in half, if not more, since HR 1’s SNAP changes took effect. According to NielsenIQ data cited by Bain & Company, the year-over-year percentage change in sales in April and May 2026 increased only 0.5% compared to 5.2% in April 2025 and 1.8% in May 2025.
At the same time, the year-over-year percentage change in price is higher in April and May 2026 at 2.8% and 2.5% compared to only 0.8% in April 2025 and 1.8% in May 2025, the data reveals.
How shopper spend is shifting
The impact of these declines is hitting some categories and channels harder than others, according to NIQ’s SNAP Policy Tracker.
“SNAP users generally expect to trade off purchases of non-essentials like ice cream and [carbonated soft drinks] for more essential items/staples in the coming months,” according to NIQ.
NIQ found 65% of SNAP buyers expect to buy less of at least one key category, including cookies, bakery items, chocolate, frozen dinners and entrees, condiments, non-chocolate candy, meat and ready-to-eat meals.
It also found 79% of SNAP users expect to buy more of at least one key category, including breakfast cereal, water, rice/pasta/grains, cheese, fresh produce, poultry, bread, eggs, milk and meat.
The shift is also driving more value-seeking. Half of SNAP shoppers say they plan to buy lower-priced food brands, while 45% plan to shop at lower-priced stores and 45% will look for more promotions and discounts. Another 23% plan to buy less food overall, according to NIQ.
‘Grocery has become a share game’
These shifts appear to favor value players, including discount, mass and club retailers, which are gaining consumers, according to Bain & Company, which argues “grocery has become a share game and leaders are starting to pull away from laggards.”
FMI: The Food Industry Association’s latest data reinforces this shift.
“For the first time, shoppers now go to a mass retailer just as much as they do to supermarkets when shopping for food. When shoppers were asked where they spend the most on groceries, 37% named a mass retailer as their primary store, compared with 36% who chose a supermarket. This gap has been narrowing over the years, and the preference for mass grew six percentage points over the previous year,” Debbie Walyus, manager, web and digital communications at FMI wrote in a blog post Aug. 19.
Pulling from FMI’s 2026 US Grocery Shoppers Trends report, Walyus said, “everyday low prices and the convenience of one-stop shopping are key reasons mass has become increasingly appealing to families.”
Tips to gain market share
“Small changes” can help supermarkets compete as mass retailers gain more traction, according to Walyus.
“For younger shoppers, demonstrate how to create delicious, budget-friendly meals using products available in your store, using digital channels like TikTok and your own website. For families, convenience is key. Curated snacks and ready-to-go meal solutions make it easier to meet busy schedules. Across all generations, focus on what supermarkets do best: providing fresh produce and quality meat,” she said.
For food manufacturers, the shift could put additional pressure on premium and discretionary categories while creating opportunities in staples, private label and value-oriented products.
