WASHINGTON, D.C.: U.S. supermarkets and food companies are bracing for a sharp downturn in sales next month as the Supplemental Nutrition Assistance Program (SNAP), which serves nearly 42 million Americans, faces its first-ever funding lapse due to the ongoing government shutdown.

Industry groups and economists warned that without congressional action or intervention from the U.S. Department of Agriculture (USDA), the program's federal funds will run out, potentially wiping out US$8 billion in monthly grocery spending and forcing retailers to cut hours or lay off workers.

"It's not only poor people who are on SNAP who are going to be affected. It means the places where they spend the money aren't going to get that money," said Marion Nestle, professor emerita of nutrition at New York University.

The National Grocers Association urged lawmakers to reopen the government and restore SNAP funding, warning of "serious consequences for local grocers, their employees, and the food supply chain." Rob Karr, head of the Illinois Retail Merchants Association, said unsold perishables could go to waste. "Retailers are going to be in a terrible situation here trying to manage costs and inventory," he said.

A USDA spokesperson described the situation as "an inflection point for Senate Democrats," continuing the agency's criticism of lawmakers who have withheld votes on spending bills in protest of rising healthcare costs.

According to USDA data, 267,000 retailers across the country are authorized to accept SNAP, with supermarkets and big-box stores accounting for 75 percent of redemptions. Walmart alone captures over 26 percent of total SNAP grocery spending, research firm Numerator estimates.

If benefits lapse, analysts expect Walmart, Dollar General, and Dollar Tree to see quarterly sales dip by up to one percent, depending on the shutdown's duration, according to brokerage Bernstein. Walmart declined to comment, while the two dollar-store chains did not respond to requests.

The looming disruption adds to existing industry pressures, including new USDA stocking rules and spending cuts from President Donald Trump's July tax-and-budget package.

Small grocers in low-income areas are especially vulnerable. "If you're looking at a small-sized grocery store in a low-income area, this is quite concerning," said David Ortega, a food economics professor at Michigan State University, adding that some may raise prices to offset lost volume.

The United Food and Commercial Workers Union, representing grocery and food production workers, said members "could see a reduction in hours and wages if SNAP dollars aren't available to be spent."

Packaged-food makers such as Kraft Heinz, General Mills, J.M. Smucker, and Tyson Foods could also see November sales slip by a few percentage points, according to Bernstein.

Smithfield Foods, the nation's largest pork processor, said it had already factored in potential SNAP delays even as it raised its full-year profit outlook. "It does affect 40 million households in the U.S.," CEO Shane Smith said.

Kraft Heinz, which saw sales fall after pandemic-era benefit expansions ended, said earlier this year it has reduced its reliance on SNAP purchases to 13 percent from 20 percent three years ago to limit volatility.