Thanksgiving crunch for US retailers

Delay in Snap money has belts tightening

- JULIE CRESWELL LINDA QIU

Jimmy Wright, who owns Wright's Market in Opelika, Alabama, said his customers were 'very much trying to stretch every dollar they have' NYT

Jimmy Wright, the owner of Wright's Market in Opelika, Alabama, is worried about his turkeys.

Ahead of the Thanksgiving holiday, Mr Wright stocked his grocery store with the large birds, potatoes, stuffing and other foods for his customers in the community, about 28 miles northwest of Columbus, Georgia.

But with payments on hold for the Supplemental Nutrition Assistance Program, or Snap, and continued uncertainty around when or how much recipients may receive, Mr Wright is anxious. As much as 45% of his store's sales come from customers using the food-assistance scheme, and he isn't sure whether those customers will be buying a Thanksgiving meal this year.

"I've got a freezer full of turkeys," Mr Wright said. "We ordered inventory for holidays, all this stuff months ago. We're on the hook for all of that."

For the better part of two years, well before the federal government shut down and Snap payments were paused, lower-income consumers have been slowing their spending, especially for discretionary items. Nearly three-quarters of individuals who receive Snap benefits live below the poverty line, making less than $32,000 (about 1.04 million baht) a year for a family of four.

The ripple effect of that spending pullback is being felt by retailers, food companies and restaurant chains.

"We have now one of the worst consumer sentiments we have seen in decades as we go into the holiday season," the Kraft Heinz chief executive, Carlos Abrams-Rivera, told investors last month.

Traffic from low-income consumers at quick-service restaurants declined by "nearly double digits in the third quarter, a trend that's persisted for nearly two years," the McDonald's chief executive, Chris Kempczinski, said on an earnings call last week.