SNAP benefits a headwind to industry sales, says Wolfe Research

Wolfe Research analyst Spencer Hanus says the One Big Beautiful Bill cut Supplemental Nutrition Assistance Program benefits by 20%, creating a 150-200 basis point headwind to retail industry sales, while the government shutdown is interrupting benefits from being paid on November 1. This has an immediate effect on staples and grocery products, and lower-income consumer confidence “takes a hit heading into important seasonal events,” the analyst tells investors in a research note. Wolfe points out that numerator data implies Walmart (WMT) (Walmart), Dollar General (DG) and Dollar Tree (DLTR) are most over-indexed to the SNAP benefits shopper. Target (TGT), Costco (COST) and Amazon’s (AMZN) Whole Foods are the most under-indexed, contends the firm.