This summer, Amazon will begin accepting food stamps to pay for online grocery orders as part of a pilot program along with six other companies.
The two-year program by the U.S. Department of Agriculture could help to alleviate what are known as food deserts, areas where residents have little access to fresh food and groceries, while also relieving some of the stigma of using food aid.
Five national stores are taking part in the USDA pilot, Amazon, FreshDirect in New York, Safeway in Maryland, Oregon and Washington, ShopRite in Maryland, New Jersey and Pennsylvania and Hy-Vee in Iowa as well as two smaller companies, Hart’s Local Grocers and Dash’s Market, both in New York state.
The program could represent an opportunity for Amazon, which has typically ceded the lower-income food market to Walmart. Amazon shoppers in Maryland, New Jersey, New York will be eligible to take part.
While a Prime membership costs $99 a year, Amazon has been working to broaden its reach by making it more accessible. In April the company introduced a $10.99-a-month payment plan for Prime.
Amazon may feel the need to position itself to cover the full gamut of grocery customers, not just the higher end. Walmart is still the nation’s largest seller of groceries and coming soon are two European discount grocery chains, Aldi and Lidl, both of which are looking to expand in the United States, said Phil Lempert, a food marketing expert.
While a potential new market, selling to this demographic may also require a slightly different marketing push, said Lempert.
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SOURCE: USA Today, Elizabeth Weise