Chapter 1: What changes are happening to the SNAP program?
A holiday does not necessarily equal a light news day, these days at least. We've got IPOs, homebuyer stats, and the lowdown on a somewhat mysterious retailer that's trending by copying trends. From American Public Media, this is Marketplace. In New York, I'm Kristen Schwab in for Kyra's doll. It's Monday, May 25th. Good to have you with us on this Memorial Day.
Over the weekend, it seemed like the Trump administration and Iran were maybe getting closer to ending the war. Now progress seems to have slowed down. Of course, all of it continues to impact trade routes and the price of oil. And American businesses are left with little to do but follow the twists and turns. Though twists and turns might just be a part of doing business in America now.
To get a temperature check, we called up Daniela Velasquez de Leon, general manager of Organics Unlimited, a fruit importer in San Diego. Daniela, it's great to talk with you again. Great to talk to you, too. So it's been a few months since we've caught up. Tell me, how's business? What's happening? It's good. It's been a good year.
As always, there's stuff going on out in the world, but business has been good this year. Yeah, there's a lot of stuff going on in the world. What is sort of the thing that rises to the top for you? I mean, I think the biggest thing on a lot of people's minds is what's going on in the I mean, just from an overall humanitarian perspective, but also just the way it affects every single industry.
And of course, the tariffs, which will hopefully start getting the refunds here soon. Yeah, let's start with tariffs. Have you applied for that refund yet? So we're in the process of doing that through...
our customs brokers, we are qualified to do the phase one refunds.
So that would cover everything pretty much from April onward, though we do have some entries that came in from Mexico when there was like that 25% tariff for a few days in late March that are unfortunately not within that window. When you get that money, do you know what you're going to do with it?
It's going to help with the cost increases this year. I guess with what's happening in the Middle East, there's been increases in fuel costs from both Ecuador and Mexico. And so far, we've been absorbing that because, I mean, we understand that it's very hard for our customers as it is to try and maintain fuel. food prices at a good spot.
So we definitely don't want to be contributing to the inflation that people are seeing in their groceries. So that's definitely what we have planned for right now.
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Chapter 2: How are convenience stores adapting to SNAP restrictions?
The index funds are going to set the price of SpaceX, and the active managers will be the price takers. That's unprecedented.
Because SpaceX and the AI companies will likely be selling relatively few public shares at first, the rest are locked up with private investors, competition will be fierce and the price is likely to spike, says Paul Kedrosky, senior fellow at the MIT Initiative on the Digital Economy.
It's kind of like that scene in Oppenheimer where you're going to set the global atmosphere on fire.
Well, we had a moment where it looked like the chain reaction from an atomic device might never stop.
It's kind of like that. The risk is it's a self-perpetuating process that has no natural limit.
The more the share price rises, the more index funds have to buy, driving the price ever higher and forcing the sale of other stocks to make room. I'm Megan McCarty Carino for Marketplace.
More sour news for the housing market is coming in after a slow spring sales season. The first-time homebuyer in America is graying. The median age for first-time buyers is 40 years old, an all-time high according to the National Association of Realtors. Meanwhile, the share of all homebuyers who are first-time buyers fell to one in five, an all-time low.
Marketplace's Mitchell Hartman reports on what this means for Americans trying to put down roots and build wealth. I meet Kim Tate-Wistreich at his new home on a tree-lined street in Portland, Oregon.
Sorry, my dog, she's a rescue dog. I'm just going to come outside with her first, get to know you for a second, and then we'll go in together.
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Chapter 3: What challenges do smaller stores face with new SNAP requirements?
17-month-old twins. Tate Wistreich is 38.
For more than a decade, he and his wife lived in Thailand. Back in the U.S. with a young family, they started house hunting while moving from rental to rental.
The market was pretty tough and we actually bid above the market value, which was, you know, felt like a pretty bold move at the time, maybe not the right move.
But it was a move they could make, at least, with savings in the bank and help from their parents. Their broker, Israel Hill, sees a lot of similar first-time buyers.
Definitely an older crowd. The cost of homes has gone up.
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Chapter 4: How is SNAP impacting consumer purchasing behavior?
Someone needs to have a substantial down payment and be pretty stable in their economics to be able to afford a property.
Data from real estate site Zillow confirmed the trend, says senior economist Orfei Divungi. The typical prospective buyer is 39.
They have to have a much higher income than they used to to grab onto the first rung of the homeownership ladder.
Some analysts have disputed the National Association of Realtors finding that the typical first-time buyer is as old as 40, though NAR stands by its data. Redfin has done its own analysis and concludes the average age of first-time ownership has risen gradually over the past two decades, says Chen Zhao, head of economic research.
Partly for affordability reasons, partly because people just do everything later in life. They get married later, they have kids later, right? So they buy a house later.
As to whether it's a good idea to wait until age 35 or 40 to buy a first home, here's Northwestern Mutual Wealth Management Advisor Ashley Russo.
I like to remind people who are going for houses and it might be torturing themselves, right? Owning a home is not the only way to build wealth.
She says first priorities should actually be saving for an emergency fund and retirement. Orfeh Divungi at Zillow says delaying home ownership can have advantages.
If you are starting later, invested in the stock market, you're probably in good shape.
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Chapter 5: What does the USDA aim to achieve with SNAP changes?
Odds are that describes a lot of people these days. But first, let's do the numbers. U.S. markets were closed today in observance of the Memorial Day holiday. So let's talk oil prices, which reacted to the latest negotiations of a deal on the Iran war. Brent crude slid roughly 5% to a two-week low of about $98 a barrel. Gas prices dipped slightly to a national average of $4.50 a gallon.
AAA estimated that 39 million people would be traveling by car throughout the three-day weekend, a slight increase from last year. In international markets, Japan's Nikkei rose 2.9%, France's CAC 40 picked up 1.2%, and Germany's DAX surged 2%. You're listening to Marketplace.
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This is Marketplace. I'm Kristen Schwab. The Supplemental Nutrition Assistance Program, or SNAP, is going through a lot of changes. And those changes vary depending on where people live. By the end of the year, more than a dozen states are expected to implement their own restrictions on what recipients can purchase. And while most SNAP dollars are spent at grocery stores, about a
Marketplace's Carla Javier looks into how changes to Snap might impact these businesses. Moto, Inc. operates 84 convenience stores and gas stations, mostly in the Midwest. The company's president, Rob Forsyth, says almost all of their locations accept Snap. And he's generally supportive of the reasoning behind restricting the use of those food benefits to buy sodas and candy.
It's just that the devil's in the details.
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Chapter 6: What is Quince and how does it operate in the retail market?
more unhealthy foods than sort of non-participants controlling for income, controlling for education.
Chris Reedy, chief revenue officer at the cashback app Ibotta, says there's some early evidence that self-identified SNAP shoppers did change their shopping habits in the states that got waivers to implement the restrictions.
Soda purchase activity decreased 15% in the states where waivers went into place compared to 7.5% where they did not go into place.
Reedy says there's been a similar pattern for candy purchases. The USDA is also trying to increase access to healthier foods in stores that accept SNAP. By early November, all SNAP retailers will need to carry at least seven options in each of the staple food categories—dairy, vegetables or fruits, grains, and protein. And more of those items offered will have to be perishable.
This might have less of an effect at the larger grocery stores where most SNAP purchases happen and most SNAP dollars are spent. But Shelley Verplug at the National Center for Food and Agricultural Policy says meeting the requirements could be a challenge for smaller stores. There might be some new administrative costs and just hassle factors to participate in the program.
They may decide it's not worth participating in. which in turn could cause problems for SNAP recipients in areas where a supermarket may be far away. Those that may lack vehicles or may be constrained in their mobility, if they were using quite a bit of their benefits at smaller stores and those smaller stores end up leaving the SNAP program, it could really impact their access.
Verplug adds that with changes to eligibility requirements and fewer people receiving SNAP benefits, there's less spent by SNAP participants. And that just makes the program less attractive to stores to participate in for that reason, too. Back at Modo Inc. headquarters, Rob Forsyth worries if stores stop accepting Snap, that'll be a disservice to vulnerable Snap recipients.
He thinks most of Modo's convenience stores will be able to adapt to the changes. But at his smaller stores, he says adding foods like green beans, corn, peas, and diced tomatoes to meet the requirements would take valuable shelf space from better-selling items.
Who can possibly be against making more healthy food available to SNAP recipients? You know, everybody can agree with that, too. But some ideas are good in theory, but bad in practice.
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Chapter 7: How does Quince utilize data to inform its product offerings?
So it uses a data scraping operation to figure out what is selling sort of across the internet. in these categories that this particular consumer finds interesting.
So if a type of cardigan is selling really well from a bunch of smaller brands, like Quince will note that and note the sort of interesting things about that cardigan and use that type of information to come up with like the most optimized version of a product to fit those existing requirements.
And then the company has a really enormous supply chain, mostly in Asia, that they then sort of work in order to get the price on those products as low as possible. You know, in your story, people talk about Quince as a, not just a retailer, as a data company, as a supply chain company? How do you see it? I think that Quince is perhaps best understood as an arbitrage company.
What the company has done really, really effectively is look at all of the steps in getting a desirable consumer product to an end consumer and say, okay, what can we cut out? How can we consolidate processes and How can all of these things be adjusted in order to keep prices as low as possible? People don't really want polyester anymore, especially these higher income people want natural fibers.
They want organic materials. So if you can figure out how to make stuff in those materials for prices that are closer to polyester, then you can really move a lot of customers away from other products at other price points and onto your product. Do you think that this is a special retail category or do you think that this is what companies will move towards in the future?
I think that... Because it's pretty similar to what Shein does, right?
Right. Yeah, it's very, very similar to Shein.
And, you know, I thought it was interesting that we recently saw Shein by Everlane, which is sort of a clothing brand that has a similar aesthetic to Quince. But I think Shein wants to have an opportunity to... be in play for these higher and higher income consumers who do a really disproportionate amount of U.S. consumer spending. It would be hard for U.S.
companies that have to operate physical stores to operate on this model. But if a company is launching a new clothing brand or something like that in the future, it seems pretty obvious to me that If at all possible, they would try to launch it with a similar type of logistics operation and data scraping operation. Are you a Quince shopper, Amanda? I've never ordered anything from Quince.
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Chapter 8: What future trends might emerge in retail based on Quince's model?
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