Retailers, consumers and prices
Food stamp ramp-up
Family Dollar is seeing more consumers buy food at its stores. It is also seeing more consumers use food stamps amid the recession.
It would seem like a winning opportunity for Family Dollar to attract more shoppers with its low prices. There’s just one hitch - less than half of the company’s stores currently accept food stamps.
The food stamp program, now known as the Supplemental Nutrition Assistance Program, has its roots in a program started in 1939 to help families during the Great Depression. During the current recession, it is getting more use. According to data cited by Family Dollar CEO Howard Levine during a call on Wednesday, an estimated 14 million households relied on food stamps in September, up about 17 percent from a year earlier.
Still, many of those households cannot use their stamps at Family Dollar, so the discount chain is speeding up its roll-out of technology that lets it accept food stamps, as well as credit cards. At the end of November, about 3,000 Family Dollar stores accepted food stamps and credit cards, Levine said. Most stores already accept debit cards. Expect to see the right technology in place in about 75 percent of Family Dollar’s stores by August, when its fiscal year ends, and in nearly all of its more than 6,600 stores a year from now.
Family Dollar did not say how much the technology upgrades cost, though the company did hint that they were higher than $5,000 per store.
(Reuters photo of shoppers leaving a Family Dollar store in Houston that was operating by generator and accepting cash only as the area recovered following Hurricane Ike in Sept. 2008)