Core Insights - Major US retailers and food manufacturers are preparing for a potential decline in sales due to a possible federal government shutdown affecting food aid programs, particularly SNAP, which supports approximately 42 million Americans [1][2] - The estimated revenue shortfall for grocers in November could reach $8 billion if SNAP payments are suspended [1][2] Retail Impact - Industry groups warn that the disruption may lead to lower supplier sales and reduced staff hours as beneficiaries cut back on spending [2] - Approximately 267,000 retailers are authorized to accept SNAP benefits, receiving $96 billion annually, which translates to $8 billion monthly, with three-quarters of this spending occurring at supermarkets and superstores [2] Company-Specific Effects - Walmart accounts for 26.1% of total grocery spending from SNAP, and could see a decline in fourth-quarter sales for 2025 by under 1% year-on-year if benefits are delayed [3] - Packaged food manufacturers like Kraft Heinz, JM Smucker, General Mills, and Tyson Foods may also experience a decline of a few percentage points in November sales if SNAP payments are suspended [4] - Smithfield Foods has already adjusted its operating profit outlook for fiscal year 2025 in anticipation of possible SNAP delays, noting that around 7.5% of spending in its categories is linked to SNAP usage [4] Strategic Responses - Smithfield is collaborating with retailers to promote affordable products in light of potential SNAP disruptions [5] - Kraft Heinz has actively sought to reduce its dependence on SNAP purchases, decreasing its share of sales linked to SNAP from 20% in 2022 to 13% by mid-2024 [5]