Target Seeks To Profit From Food Stamp Recipients

Target Corp. is preparing to let shoppers use food stamps to pay for online orders, following in the footsteps of Walmart Inc. and Amazon.com, in a move that could help the nation's seventh-largest retailer gain market share among lower-income shoppers, Arriana McLymore and Siddharth Cavale reported for Reuters.

Photo Insert: Offering food-stamp payment for online orders could help Target fill a long-time gap in its e-commerce strategy.

Roughly 21.7 million US households use food stamps, which are mostly restricted payments to cold food items, non-alcoholic beverages, and seeds and plants. Target disclosed to Reuters last week that it will begin to accept payment online with food stamps, tentatively starting in late April, through a service offered by Shipt, its delivery arm.

A Target spokesman said Thursday that it hadn't "shared any official launch date" for the service, which also will include drive-up and pick-up orders.

Offering food-stamp payment for online orders could help Target fill a long-time gap in its e-commerce strategy and reach households that might otherwise purchase groceries at so-called "dollar store" chains, or at Walmart.

Amazon and Walmart already accept purchases with food stamps on their websites since 2019 as part of a program with the US Department of Agriculture (USDA), which distributes food stamps. Grocery delivery service Instacart also offers the option.

Still, even though Target has lost the early mover advantage, investors and industry watchers were positive on the move. Accepting food-stamp payments online could build customer loyalty and help it sell other products, said David Klink, senior equity analyst at Huntington Private Bank, which holds over $30 million in Target shares.

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