NACS Depth of Stock Retailer Comment Letter with Filling Template

[ADD COMPANY LETTERHEAD]

November 24, 2018

Vicky Robinson

Chief, Retailer Management and Issuance Branch

Retailer Policy and Management Division, Room 418

3101 Park Center Drive

Alexandria, Virginia 22302

RE:Enhancing Retailer Standards in the Supplemental Nutrition Assistance Program, RIN 0584-AE27

Dear Ms. Robinson,

As a convenience store operator and retailer in the Supplemental Nutrition Assistance Program (SNAP or the Program), I write to express my concerns with the recently proposed rule from the U.S. Department of Agriculture’s Food and Nutrition Service (FNS) that modifies retailer eligibility requirements in SNAP. If finalized as written, the FNS rule would negatively affect my ability to continue as a SNAP retailer.

[INSERT BACKGROUND ON YOU AND YOUR COMPANY:

How many stores do you own?
How many of your stores participate in the SNAP program?
How many people do you employee in your stores?
Do you operate in rural, urban, or suburban areas?
Where are your stores? Give some flavor of the geographic region where your stores are located]

Convenience storespridethemselves on selling the products that people want to buy,and offering those products for sale in a manner that is convenient for consumers in terms of both location and hours of service. As such, we often operate in areas not served by larger format retailers, and we operate during hours of the day in which other stores might not be open. Our customers are frequently working class individuals, many of whom perform shiftwork during nontraditional work hours. Thus, convenience stores play a key role in ensuring access to nutrition for these individuals and families and are an integral part of the SNAP nutrition network.

Unfortunately, I am concerned that the FNS proposed rule would jeopardize my future participation in SNAP—and could in fact disqualify tens of thousands of convenience stores from participating. Under the proposed rule, the definition of a retail food store is modified to exclude any retail outlet with more than 15% of its total food sales in items that are “cooked or heated onsite before or after purchase.” This exclusion also applies if a store is under the same roof as another entity with more than 15% of its food sales “cooked or heated on site before or after purchase.” [If 15% or more of your store’s total food sales come from prepared foods, state that here. Also, if you have another food business (e.g. Subway or McDonald’s doing business under the same roof as your c-store, say that here.]

This provision unfairly targets the convenience store industry and would result in most, if not all, convenience storesbeing categorically eliminated from the Program. Most convenience stores offer hot, prepared foods to our customers. In addition, many convenience stores operate under the same roof as a separate restaurant franchise, such as a Subway or Burger King. Despite the fact that hot, prepared foods—whether sold in a convenience store or through a Subway—are not eligible for redemption with SNAP benefits, FNS unfairly targets retailers offering these products by excluding them from the Program even if they meet all other eligibility requirements. The end result of this provision will be the disqualification of thousands of small-format retailers from the Program,thus limiting access to those SNAP beneficiaries who utilize our stores to redeem their benefits and access nutrition.

The FNS proposal would also implement unworkable Depth of Stock requirements retailers must meet to be an eligible SNAP retailer. Under the proposed rule, retailers must offer at least seven different varieties of food items in each of the four staple food categories, including one perishable item in three of those categories. This requirement is consistent with the 2014 Farm Bill passed by Congress and represents a consensus approach to providing SNAP beneficiaries more nutrition options. However, FNS goes beyond congressional intent and requires that retailers publicly display at least six units of each of the 28 food items, a total of 168 items. Since these 168 items must be continually stocked, in reality, a retailer must stock far more than 168 items to replace any items that are sold and still be in compliance with Depth of Stock requirements.

[Add personal details about your store to show FNS how difficult this will be for you!

What is the total square footage of your average store?
Do you have storage space in a backroom or is your floor space your entire storage space?
Will you be able to stock 168+ items across the four staple food categories?
How frequently does your store receive shipments of food items (both perishable and non-perishable)?]

Stocking 168+ items will be a significant challenge for a small format retailer. However, under the proposed rule, FNS makes that challenge even more daunting by redefining “staple foods” to exclude multiple ingredient items. Most convenience stores stock a variety of soups, stews and frozen dinners that have traditionally counted toward retailer Depth of Stock requirements. Under the proposed rule, this would no longer be the case. These multiple-ingredient items are stocked because customers want to buy them and they provide substantial nutritional value. Eliminating these items from Depth of Stock requirements will not cause retailers to stop stocking these items nor will it cause SNAP recipients to stop purchasing them. The change only makes it more complicated for SNAP retailers to meet updated Depth of Stock requirements while still ensuring the food customers desire to purchase is on the store shelves.

FNS should also adjust its definition of “variety” so that what stores can stock reflects what our customers want to buy. For example, to meet the requirements for variety in the “meat, poultry, or fish” category, FNS has listed duck, catfish, shrimp, lamb, and tofu as acceptable variety options. Many of these items are exceedingly costly and are not the types of foods that consumers frequenting convenience stores want to (or are financially able to) buy. Variety should be an economically realistic construct; items that are different, such as ground turkey and sliced turkey (which are not interchangeable) should be considered different varieties.

Convenience stores are an integral part of SNAP. Small-format retail stores, like our stores, provide access to hundreds,if not thousands, of SNAP recipients. We open earlier, stay open later, and are located in many places where traditional grocery stores are not available. In rural and urban areas, we are often the only option for nutrition. The combined impact of the FNS proposal will be the elimination of convenience stores as SNAP retailers. While this would be unfortunate for my business, more importantly, it will harm SNAP beneficiaries by unfairly eliminating access.

As FNS considers revisions to its proposed rule, I would urge it to recognize the vital role convenience stores play in providing nutrition to SNAP beneficiaries. FNS should facilitate convenience stores’ participation in the Program by eliminating the 15% threshold, eliminating the six stocking unit requirements for each staple food, and maintaining the traditional definition of “staple foods” to include multiple ingredient items. The cost of complying with this rule will be much more than the inaccurate $140 per store price tag that FNS has calculated. In fact, it could end up being so cost-prohibitive that our company would ultimately decide not to participate in SNAP.

Thank you for your consideration of these concerns, and please let me know if I can provide any additional information.

Sincerely,

[INSERT NAME]