Trade-Offs: Allowing Food Stamps at KFC?Posted: April 2, 2011
According to the Louisville Courier-Journal, Yum! Brands has officially stated its interest in allowing food stamp users to redeem those welfare benefits at some of its restaurants. Yum! Brands famously owns American fast-food giants like KFC, Pizza Hut, and Taco Bell, and are headquartered in Kentucky. Currently Yum! officials are lobbying the Kentucky state government for this policy change.
On the one hand, relaxing the limits on food stamp purchases will expand access of hot, prepared, cheap meals to people that cannot typically afford adequate amounts of food. Many of these recipients are strapped not only for cash, but time; thus, fast-food is an attractive option that fits in with an overwhelming schedule.
Yum! officials also point out that consumers will have access to nutritional information, so they should be able to make healthy choices. Further, a Yum! vice president, Paul Carothers, notes that consumers can already use food stamps to buy unhealthy foods in grocery stores:
“The only thing they cannot use their benefits for … now are household products, alcohol, tobacco and those sorts of things…”
Let’s be clear:
Yum! stands to gain from this expansion, and will tap into a new market (government food assistance recipients). Yum! executives “haven’t tried to compute that [amount],” but we can assume it will be non-zero.
Low-income consumer preference in fast-food is a tricky subject, given that marketing is incredibly strong and these particular consumers are highly price-sensitive. We cannot assume that a consumer will eat healthier because nutritional information is available to them.
Certainly, food stamps are used to purchase unhealthy foods all the time in supermarkets. However, the government is in a different position when it deliberately expands access to these unhealthy foods. Grocery stores probably carry roughly more healthy options than unhealthy ones, whereas KFC may be troubled to make the same calculation.
Fast-food retailers can deliver unhealthy foods in a highly convenient method that is attractive to people short on time and money. When Yum! Brands insinuates that expanding food stamps to their retail locations is a pro-poor, pro-food security move, we should consider the complexities of both the short and long term.