Our guest this week is Terry Clear, Director of Replenishment and Sales Insights for 8th & Walton discusses the impact of recent cuts and uncertainty in SNAP funding on supplier business decisions.
Lainie: As the federal shutdown delays full SNAP funding, what immediate challenges do you expect suppliers to face in terms of order volumes and inventory planning?
Terry: For many suppliers, especially those in the grocery field, there will be smaller orders because overall purchases will decline.
Some stats I’ve seen indicate that approximately 18% of Walmart’s grocery sales are SNAP, and Walmart receives roughly 25% of all SNAP dollars in the US. With SNAP not being available—and no one knowing how long this will last—there’s clearly going to be a drop in sales. Suppliers affected by SNAP should take note.
It’s important to understand what percent of your product sales at Walmart are purchased via SNAP, so you can estimate the potential impact. You should also look at ways to increase demand, such as advertising or other initiatives, to replace or recover from lost SNAP sales.
This situation will create a bullwhip effect in the supply chain.
Lainie: You were talking about trying to generate more demand.
Terry: Yes, I would focus on really analyzing demand signals and sales, and working closely with Walmart partners to anticipate what to expect. Nobody knows how long this SNAP disruption will last. The longer it goes on, the more severe the bullwhip effect will be.
Lainie: Is this something suppliers should keep in mind for future planning, considering the ongoing contention over government funding?
Terry: Absolutely. Hopefully, we won’t see another government shutdown, but it’s a good intellectual exercise. Now we’ll have a clear start and end period to examine how sales and orders were affected. That way, if another event occurs, we’ll have a method to estimate its impact on the supply chain.
3-Minute Insights is produced by 8th & Walton and recorded at The Ledger in Bentonville Square. The Ledger offers six fully bikeable stories of private offices, individual coworking spaces, meeting rooms, and event venues.
The Ledger’s stunning views and state-of-the-art amenities make it the perfect location for doing business, hosting events, and celebrating life’s milestones, including weddings. We hope you’ll join us next week for another episode of Three Minute Thursdays.
