Walmart has too often found itself caught up in simplistic red versus blue state political debates. For many of these discussions, conservatives have held up the chain as a shining example of the American dream while liberals have vilified the company for its labor practices. The reality is undoubtedly much more complex than the stereotypes suggest as made clear by Walmart's recent 10-K filing. The document lists factors that affect its results including cuts to the Supplement Nutrition Assistance Program (SNAP), or food stamps, as well as other forms of government assistance.
The company's 10-K filing is not a surprise. Back in January, the retailer said cuts to SNAP were a major factor in its negative same-store sales for the last quarter. Per the Los Angeles Times, Congress cut assistance to families of three participating in SNAP by $29 a month in November and in January it cut assistance to 850,000 families by an average of $90 a month.
Today, Walmart drives more than half its sales from groceries. It follows that cuts to public programs used by its customers have real consequences for the chain's top and bottom lines. The chain is not alone, however, as traditional grocery stores as well as dollar outlets and others face the same issue. So what are these companies to do? Should they increase lobbying efforts to get Congress to change its position on SNAP and other programs or accept the reality of the cuts and look to attract shoppers who don't have to rely on the government safety nets?
What would you do if you were running a retail operator whose results were hurt by cuts to government programs such as SNAP?