A starving grocery business? Kroger loses $12 billion to competitors as SNAP cuts strain family budgets — now 3,000 workers are being laid off

That’s because grocery stores rely on the dollars consumers spend through programs like SNAP and the Women, Infants and Children program (WIC) program, which is also being cut.

In 2023 alone, SNAP accounted for $124 billion in food sales, according to James Ziliak, director of the Center for Poverty at the University of Kentucky. The loss of that could be devastating, or even fatal, for small supermarkets and community grocery stores.

The nonprofit Commonwealth Fund predicted that SNAP cuts could result in the direct loss of 78,000 food-related jobs in agriculture, retail grocery and food processing.

Now there are signs that this prediction could be coming true.

Here’s what’s at stake and what to do if you’re affected.

Kroger faces staggering $12-billion loss to competitors

On Oct. 13, Cincinnati-based grocery store chain Kroger announced plans to lay off 3,000 corporate employees over three years.

The company has 409,000 employees and operates more than 2,700 stores under the Kroger brand as well as Ralphs, King Soopers, Smith’s, and Fred Meyer.

CEO Greg Foran suggested the workers’ jobs would be at least partially automated with AI tools that can “reduce duplicative work and look closely at where work is best fit to be done.”

According to ABC News, Kroger has floundered under pressure from competitors in the discount space, including Aldi, Lidl and even Amazon, and it took a major blow after a proposed merger with Albertsons fell apart in 2024.

But a September earnings call revealed deeper issues at the company — and they all stem from the severe strain that poor and working-class families are under.

Despite running numerous discounts and promotions, Kroger has lost more than $12 billion in spending on consumer packaged goods to Amazon, Walmart, and Costco over the past year, according to Numerator.

Numerator found that lower-income Kroger shoppers reduced their spending on packaged goods by 5.2% over the past year and made 30 million fewer trips.

The shifts in spending paint a picture of higher food prices and slashed discretionary spending: While spending on basics like canned goods and drinks is up by $800 million at Kroger, spending on health and beauty products is down $178 million.

“Reductions in SNAP benefits, higher fuel prices, and softer consumer confidence are all putting pressure on household budgets. Customers are buying more on need,” Foran told investors.

President Trump’s SNAP cuts

President Trump’s One, Big, Beautiful Bill shifted administrative costs for SNAP — shared equally between the federal and state governments till now — onto the states, leaving them responsible for 75% of the cost.

The Urban Institute projected that 22.3 million of the 42 million families who rely on SNAP will lose some or all of their benefits as a result.

Grocers that support SNAP recipients — many in rural areas, according to Politico — will have to consider layoffs, raising prices or alternatives like e-commerce to contend with the impacts.

IGA’s John Ross, CEO of the independent grocery store chain, told CNN that the cuts will result in store closures and “more food deserts in urban and rural areas.”

“A key advantage of SNAP is that money is spent locally,” Ziliak said.

Alabama grocer Jimmy Wright said the SNAP program allows his customers to buy fresh fruits, vegetables and milk through United States Department of Agriculture (USDA) programs such as SNAP and the Women, Infants and Children program (WIC), which in turn support local farmers.

In fact, the USDA estimates that every $5 the federal government spends on SNAP generates $9 in return in jobs. The SNAP cuts could change that equation.

What you can do if your local grocer closes

Cuts to the SNAP program may see recipients traveling long distances to grocery shop in the future.