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A little more than a year ago, Ryan Sprankle welcomed President Donald Trump to one of the three grocery stores his family owns near Pittsburgh. Trump was on the campaign trail; they talked about high grocery prices, and the Republican nominee picked up a bag of popcorn.But these days, Sprankle would have a different message if Trump or any lawmakers visited his store. He wants them to know that delayed SNAP benefits during the government shutdown hurt his customers and his small, independent chain.“You can’t take away from the most needy people in the country. It’s inhumane,” Sprankle said. “It’s a lack of empathy and it’s on all their hands. The Trump administration froze funding for the Supplemental Nutrition Assistance Program at the end of October, impacting food access for some 42 million Americans. On Monday, the U.S. Senate passed legislation that would reopen the federal government and replenish SNAP funds, but the U.S. House of Representatives still must consider the bill. It’s unclear when SNAP payments might resume if the government reopens.In 2024, SNAP recipients redeemed a little more than $96 billion in benefits, according to the U.S. Department of Agriculture, which administers the program. The majority 74% was spent at superstores and supermarkets, a category that includes big chains like Walmart and Kroger but also some independent stores like Sprankle’s.Around 14% was spent at smaller grocery and convenience stores, businesses often tucked into neighborhoods and more easily accessible to SNAP beneficiaries. A stalled economic engine Etharin Cousin, a former director of the United Nations World Food Program and founder of the nonprofit Food Systems for the Future, said the cutoff of SNAP benefits had immediate impacts on grocers and convenience stores of all sizes, most of which operate on slim profit margins of 1% to 2%.“SNAP isn’t just a social safety net for families. It’s also a local economic engine,” Cousin said. “SNAP benefits flow directly into neighborhoods, stores, regional distributors and community jobs.”Walmart declined to comment on the impact of the SNAP funding lapse but noted that it has been lowering prices and donating to local food banks. Kroger also declined to comment.Shoppers not receiving their food benefits affects all retailers but becomes “a big problem more quickly” at small chains, Sprankle said. His Kittanning, Pennsylvania, store gets 25% of its revenue from SNAP, but customers who don’t get government assistance also are worried about the shutdown, according to Sprankle. They’re spending less, trading down to cheaper goods or heading to food banks, he said.Sprankle said lower sales cut into the overtime he can offer to the chain’s 140 employees. Many are worried about losing their jobs, he said.“They have families to feed, they have kids for buy gifts for,” he said. “If I have to sell my truck, we’re going to give Christmas bonuses.”Liz Abunaw, the owner and operator of Forty Acres Fresh Market in Chicago, recently saw a customer putting back a full cart of groceries because she couldn’t afford them without SNAP.Abunaw opened the supermarket in September after years spent selling produce at pop-up markets and in delivery boxes. Only about 12% of Abunaw’s revenue comes from SNAP benefits right now, she said. But without it or if SNAP recipients spend less money in her store — it will slow Forty Acres’ growth and make it harder to pay the workers, suppliers and farmers who depend on her, she said.“SNAP is currency. I get money I then use in this economy. It’s not a food box,” Abunaw said. “The economic impact of SNAP is larger than the dollars spent.” From neighborhood shops to food pantries The suspended food aid also had an immediate impact on Kanbe’s Markets, a nonprofit that stocks produce in coolers at 110 convenience stores around Kansas City, Missouri. Kanbe’s distributes a mixture of donated food and food purchased from wholesalers to keep prices low, founder and CEO Maxfield Kaniger said.Kanbe’s also distributes free food to 50 food pantries and soup kitchens around the city.Kaniger said some of the convenience stores he works with saw their sales drop 10% in the days after Nov. 1, when SNAP benefits weren’t paid. At the same time, the food pantries he supplies asked for double or triple their usual orders.Because it’s giving away more food than usual, Kanbe’s has to spend more buying produce for the coolers it stocks. It’s frustrating for Kaniger, who must make decisions quickly before food spoils.“It should be enough that people are going without food. Period, end of sentence. People going without food is wrong,” he said.Babir Sultan sells berries, lemons, potatoes, bananas and other produce from Kanbe’s at his four FavTrip convenience stores in the Kansas City area. His stores are in food deserts, far from other groceries or big retailers, he said, so it’s important to him to stock fresh produce for those neighborhoods.Sultan said foot traffic at his stores fell 8% to 10% in early November after SNAP funding ceased. He decided to offer $10 of free produce to SNAP beneficiaries but said he’s also happy to help out other customers who might be struggling right now.“If you’re in need, just ask, we’ll take care of you,” Sultan said. “Everybody is affected whenever the customer is feeling the pinch.” Durbin reported from Detroit. Associated Press data journalist Kasturi Pananjady in Philadelphia contributed to this report. Dee-Ann Durbin, AP Business Writer
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E-Commerce
Circle Internet Group released its third-quarter earnings on Wednesday, November 12, announcing a 66% jump in revenue and reserve income year-over-year (YOY). The $740 million figure stemmed, in large part, from a 97% increase YOY of average USDC in circulation. USDC, Circles flagship cryptocurrency stablecoin, is pegged to the U.S. dollar. Its also one of the largest stablecoins in the world. In August, Circle announced Arc, a public blockchain designed specifically for stablecoins, such as USDC. In the earnings report, Circle claimed that over 100 companies are taking part in the launch of Arc public testnet. Jeremy Allaire, cofounder, CEO, and chairman at Circle, said the test was met with extraordinary enthusiasm from partners across traditional and digital financeevidence of the deep and diverse ecosystem forming around open, programmable money.” Furthermore, Circle reported a net income of $214 million, a 202% improvement YOY. Notably, this is only Circles second earnings report after going public in June. All YOY figures are reported by Circle based on private earnings during quarter three 2024. CRCL takes a tumble in premarket trading Despite impressive revenue and net income growth, Circle shares (NYSE:CRCL) still took a tumble. After already closing 5.57% down on Wednesday, the drop continued in premarket trading on Thursday, falling more than 5%. One factor could be Circle raising its expected 2025 adjusted operating expenses from between $475 million and $490 million to $495 million and $510 million. Circle blamed the updated outlook on growing investment in building our platform, capabilities and global partnerships to meet the accelerating market interest and opportunity, as well as higher payroll taxes anticipated from option exercises. New York-based Circle Internet Groups IPO was one of the most high-profile listings of the year. After shares were priced at $31, they reached a high of close to $300 less than a month after their market debut. But the stock price has swung wildly since then. It’s down roughly 28% over the last month as of Tuesday’s close.
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E-Commerce
The longest government shutdown in history could conclude as soon as Wednesday, Day 43, with almost no one happy with the final result.Democrats didn’t get the heath insurance provisions they demanded added to the spending deal. And Republicans, who control the levers of power in Washington, didn’t escape blame, according to polls and some state and local elections that went poorly for them.The fallout of the shutdown landed on millions of Americans, including federal workers who went without paychecks and airline passengers who had their trips delayed or canceled. An interruption in nutrition assistance programs contributed to long lines at food banks and added emotional distress going into the holiday season.The agreement includes bipartisan bills worked out by the Senate Appropriations Committee to fund parts of governmentfood aid, veterans programs, and the legislative branch, among other things. All other funding would be extended until the end of January, giving lawmakers more than two months to finish additional spending bills.Here’s a look at how the shutdown started and is likely to end: What led to the shutdown Democrats made several demands to win their support for a short-term funding bill, but the central one was an extension of an enhanced tax credit that lowers the cost of health coverage obtained through Affordable Care Act marketplaces.The tax credit was boosted during the COVID-19 pandemic response, again through President Joe Biden’s big energy and health care bill, and it’s set to expire at the end of December. Without it, premiums on average will more than double for millions of Americans. More than 2 million people would lose health insurance coverage altogether next year, the Congressional Budget Office projected.“Never have American families faced a situation where their health care costs are set to doubledouble in the blink of an eye,” said Senate Democratic leader Chuck Schumer, D-New York.While Democrats called for negotiations on the matter, Republicans said a funding bill would need to be passed first.“Republicans are ready to sit down with Democrats just as soon as they stop holding the government hostage to their partisan demands,” Senate Majority Leader John Thune, R-South Dakota, said.Thune eventually promised Democrats a December vote on the tax credit extension to help resolve the standoff, but many Democrats demanded a guaranteed fix, not just a vote that is likely to fail.Thune’s position was much the same as the one Schumer took back in October 2013, when Republicans unsuccessfully sought to roll back parts of the Affordable Care Act in exchange for funding the government. “Open up all of the government, and then we can have a fruitful discussion,” Schumer said then. Democratic leaders under pressure The first year of President Donald Trump’s second term has seen more than 200,000 federal workers leave their job through firings, forced relocations or the Republican administration’s deferred resignation program, according to the Partnership for Public Service. Whole agencies that don’t align with the administration’s priorities have been dismantled. And billions of dollars previously approved by Congress have been frozen or canceled.Democrats have had to rely on the courts to block some of Trump’s efforts, but they have been unable to do it through legislation. They were also powerless to stop Trump’s big tax cut and immigration crackdown bill that Republicans helped pay for by cutting future spending on safety net programs such as Medicaid and SNAP, formerly known as food stamps.The Democrats’ struggles to blunt the Trump administration’s priorities has prompted calls for the party’s congressional leadership to take a more forceful response.Schumer experienced that firsthand after announcing in March that he would support moving ahead with a funding bill for the 2025 budget year. There was a protest at his office, calls from progressives that he be primaried in 2028, and suggestions that the Democratic Party would soon be looking for new leaders.This time around, Schumer demanded that Republicans negotiate with Democrats to get their votes on a spending bill. The Senate rules, he noted, requires bipartisan support to meet the 60-vote threshold necessary to advance a spending bill.But those negotiations did not occur, at least not with Schumer. Republicans instead worked with a small group of eight Democrats to tee up a short-term bill to fund the government generally at current levels and accused Schumer of catering to the party’s left flank when he refused to go along.“The Senate Democrats are afraid that the radicals in their party will say that they caved,” House Speaker Mike Johnson, R-Lousiana, said at one of his many daily press conferences. The blame game The political stakes in the shutdown are huge, which is why leaders in both parties have held nearly daily press briefings to shape public opinion.Roughly 6 in 10 Americans say Trump and Republicans in Congress have “a great deal” or “quite a bit” of responsibility for the shutdown, while 54% say the same about Democrats in Congress, according to the poll from the Associated Press-NORC Center for Public Affairs Research.At least three-quarters of Americans believe each deserves at least a “moderate” share of blame, underscoring that no one was successfully evading responsibility.Both parties looked to the November 4 elections in Virginia, New Jersey, and elsewhere for signs of how the shutdown was influencing public opinion. Democrats took comfort in their overwhelming successes. Trump called it a “big factor, negative” for Republicans. But it did not change the GOP’s stance on negotiating. Instead, Trump ramped up calls for Republicans to end the filibuster in the Senate, which would pretty much eliminate the need for the majority party to ever negotiate with the minority. Damage of the shutdown The Congressional Budget Office says that the negative impact on the economy will be mostly recovered once the shutdown ends, but not entirely. It estimated the permanent economic loss at about $11 billion for a six-week shutdown.Beyond the numbers, though, the shutdown created a cascade of troubles for many Americans. Federal workers missed paychecks, causing financial and emotional stress. Travelers had their flights delayed and at times canceled. People who rely on safety net programs such as the Supplemental Nutrition Assistance Program saw their benefits stopped, and Americans throughout the country lined up for meals at food banks.“This dysfunction is damaging enough to our constituents and economy here at home, but it also sends a dangerous message to the watching world,” said Sen. Jerry Moran, R-Kansas “It demonstrates to our allies that we are an unreliable partner, and it signals to our adversaries that we can’t work together to meet even the most fundamental responsibilities of Congress.” Follow the AP’s coverage of the federal government shutdown at https://apnews.com/hub/government-shutdown. Kevin Freking, Associated Press
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E-Commerce
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