The data: Almost 9% of Americans—over 3.5 million people—lost SNAP benefits between July 2025 and February 2026 due to changes under President Trump’s “Big Beautiful Bill,” according to an analysis by the nonpartisan Center on Budget and Policy Priorities.

The impact varies by state. Arizona lost 51% of its SNAP beneficiaries, while Tennessee and Virginia saw declines of nearly 16% and 15%, respectively. Participation is likely to fall further as more states—including California and New York—implement stricter work requirements to comply with federal law.

Why it matters: Tougher SNAP rules are affecting everything from how much money consumers have to spend, what they can buy with those benefits, and where they can shop.

• More states are applying for waivers that would exclude soft drinks, candy, and other foods from SNAP eligibility—which could cause sales in those categories to decline by at least $830 million, according to Numerator.
• Retailers also face stricter stocking requirements that are intended to increase access to healthy foods but could, in practice, decrease the number of SNAP-authorized stores.
• The combination of reduced SNAP benefits and rising costs of living is contributing to an increase in food insecurity, according to a recent report by the New York Fed.

Implications for retail: Tax refunds may have helped cushion the immediate impact of SNAP reductions among lower-income households, but the outlook for the rest of the year is bleaker.

• Volatile energy prices threaten to absorb a larger share of consumers’ budgets while reigniting inflation across multiple categories.
• The loss of SNAP funds will give consumers less recourse to manage higher food prices, which the US Department of Agriculture expects to increase 3.4% this year.

Retailers and consumer packaged goods (CPG) companies will have to sharpen their value messaging—and pricing—to stay relevant with budget-constrained consumers.

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