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Buy Bulk With Food Stamps

By Dan Sewell and Sarah Skidmore, AP Business Writers

PORTLAND, Ore. (AP) — With many families suddenly struggling to feed themselves, the big warehouse clubs known for king-size packages of steak and jumbo boxes of Cheerios are increasingly competing with grocery stores for the 36 million Americans now on food stamps.

Costco Wholesale Corp. said Wednesday that it would start accepting food stamps at its warehouse clubs nationwide after testing them at stores in New York. That is a big about-face for a chain that has catered to the bargain-hunting affluent with its gourmet foods, and a reflection of the fact food-stamp use has hit new highs.

Costco joins warehouse-club competitor BJ's Wholesale Corp., which started taking food stamps last April, and Sam's Club, which began accepting them in the fall of 2008.

Up until recently, some wholesale clubs were skeptical poor people would be willing to pay the $50-a-year membership fee or would be interested in buying food in the bulk quantities for which the stores are famous.

But now, in this economy, stores are battling for every dollar and see a big potential market in the growing ranks of food-stamp recipients.

From warehouse clubs to supermarkets and mom-and-pop groceries, stores are retraining their cashiers and hanging new signs to welcome such customers.

"Certainly this economy was a wake-up call," Costco chief financial officer Richard Galanti recently told investors. "It is not just very low-end economic strata that are using these."

Read More:   budget & save, food, groceries
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