As Illinoisans lose federal food assistance, independent grocers face debt, store closure

(Capitol News Illinois) As households across Illinois brace to lose their federal food assistance this month,  grocery stores, especially independent grocers across the state, are preparing for the devasting effects of decreased spending.

For some independent grocers, whose profit margins average 2%, a decrease in consumer spending associated with cuts to the Supplemental Nutrition Assistance Program could lead to store closures.

Changes to SNAP from the “One Big Beautiful Bill Act,” also known as H.R.1, mean that thousands of Illinois households will lose access to their SNAP benefits in May if they did not fulfill new work requirements or submit for an exemption.

Grocery stores operate on some of the slimmest profit margins of any business because combined with high operating costs, they sell almost exclusively low-priced items and so must sell a lot of product to make up for small sales, said Craig Norrenberns, a fourth-generation Illinois grocer.

“We’re in what we call the penny business, meaning that, like, we count and we survive on the penny,” Norrenberns said. And because grocers deal with many perishable items, it’s very easy to lose that profit, he added.

Norrenberns is a member of the Illinois Retail Merchants Association, which represents independent and corporate grocers of all sizes.

Retailers have the narrowest profit margin of all business sectors, IRMA President Rob Karr said. Within that, grocers have the narrowest profit margins, averaging between 1% and 2%.

Tariffs and fuel prices have a “major impact” on retailers, who deal in transporting, packing and importing a lot of products, Karr said.

Add stiff competition to that, and SNAP cuts will put grocers at “real risk for closure,” Karr said. When communities lose independent grocers, it impacts their ability to access food, especially products like fresh produce.

“It might actually have the inverse effect of driving more people into supplemental programs like SNAP,” Karr said.

Family business

Norrenberns has been working in his family’s business for 15 years and now owns four independent grocers in southern Illinois, including the space his great-grandfather originally opened as a butcher shop in the 1930s.

His grandfather Tom worked in and eventually bought a grocery store in Mascoutah, and along with his wife Betty Ann, expanded the operation throughout southern Illinois. The pair passed the business to their three sons, TJ, Don and John.

Craig’s father, TJ, later bought two Independent Grocers Alliance stores: Red Bud in 1995 and Millstadt in 2005. The Independent Grocers Alliance is a nationwide coalition of independent grocers that provides brand support to compete against chain stores while allowing those businesses to remain independent.

Norrenberns saved the original Tom’s Supermarket from a bankruptcy sale in 2022, adding the store to the two his father bought. He renamed it Betty Ann Market after his grandmother, and it remains the only independent grocery store in Mascoutah.

Then, just before Thanksgiving 2025, Norrenberns purchased a fourth independent grocery in Highland using the Advantage Illinois program. Advantage Illinois is a state program that uses federal financing to help small businesses obtain loans by sharing the lending risk.

“That interest rate from Illinois Advantage might be, let’s say, 2%, so a pretty low interest rate, which is great, but the bank’s interest rate at the time was like 6 or 7%,” Norrenberns said. “What they do is they take a blend of those two and we ultimately end up paying like 4%, or 4.5%.”

In 2023, the state established the Illinois Grocery Initiative, aiming to address food insecurity in part by offering grants to establish grocery stores in food deserts. Access to groceries, particularly fresh and healthy food, is directly correlated to community health.

Norrenberns said the state has done a “pretty good” job of making loans and grants like those available, but they don’t cover everything — grocery stores are expensive to run, especially with rising energy costs.

“It costs more to get the food to our door, and it costs more to get the food on the shelf,” Norrenberns said. “It’s very seldom in our business that we see like, ‘Oh hey, that fee now has been reduced, or that cost of this has gone down.’ It’s not, that’s just not the reality that we’re living in right now.”

The (Gov. JB) Pritzker administration has put effort into using discretionary money to provide relief for grocers and pharmacies, Karr said. But there’s only so much the state can do, and what would provide real relief is if the federal government revisited their changes to SNAP, he said.

SNAP cuts’ effects

In a worst-case scenario, owners may just not have enough money to pay the bills, Norrenberns said.

“It’s math, right? It’s not rocket science here,” he said.

Many independent grocery stores struggle to make substantial profits, with high overhead costs and inconsistent consumer habits. And when consumers’ spending power is limited, like when they lose SNAP benefits, local businesses feel the effects of their limited spending. During the federal shutdown last fall, when some SNAP recipients didn’t receive their November benefits, Norrenberns said he knew some business owners who saw the effects of that.

“They did what they had to to get by,” Norrenberns said. “I think there’s a lot of people that are struggling with like, credit card debt, you know. It’s like, hey, we can’t wait. What else do we do?”

Norrenberns and Karr said it’s important to hold these programs accountable and minimize fraud and overspending. But it’s gone too far. Karr said: “It’s gone so far as to be very hurtful and impactful, not only to the recipients, but to those who are serving them.”

If the worst happens — bankruptcy, store closure — communities can lose a vital piece of their economy.

“We’ve seen this happen in quite a few towns where the community loses the grocery store, but it has like this trickle-down effect. … The grocery store seems to be a part of the heartbeat of the community,” Norrenberns said. “If you’ve got a really strong grocery store, you’ve got a really strong school district, other things are going to follow suit. … But without those two things, like, it gets really hard for communities to thrive.”

The communities that Norrenberns operates grocery stores in are not ones where the majority of residents are SNAP recipients. But he also works as a consultant with other business owners, including one that’s looking to open a grocery store in Venice, an impoverished community in Madison County where most of its residents receive SNAP benefits.

“The reality is, like, everybody’s got to eat,” Norrenberns said. “What happens when there’s a hunger crisis — well, it leads to crime, it leads to the kids not being able to perform in school because … they don’t have food at home.”

On April 29, a House committee held a hearing on three bills lawmakers introduced to address the needs of those losing SNAP benefits. Committee members heard testimony from advocates, including Norrenberns, on behalf of the retailers’ association.

While the House versions all missed committee deadlines, the Senate versions of the bills are still alive in the Appropriations Committee.

Nolan Downey, senior director of policy at the Greater Chicago Food Depository, said in his testimony that for every meal that food banks and food pantries provide to those in need, SNAP provides nine, and pantries can’t keep up with the kind of need associated with losing SNAP benefits.

“At the end of the day, like, people have to come together, and we’ve got to find some middle ground that makes sense,” Norrenberns said. “But the answer can’t just be, ‘Well, let’s just do more tax, right?’ … There’s got to be … some new vision cast, whether that’s from the current (Pritzker) administration or new administration.”

(Reporting by Jenna Schweikert and UIS Public Affairs Reporting (PAR), Capitol News Illinois)

Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.

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