0:02 If you haven't heard by now, we are in a
0:04 government shutdown and a lot of
0:07 government services stop during a
0:09 government shutdown. One of the biggest
0:11 ones that people are worried about right
0:14 now are the SNAP benefits that are going
0:16 to come to an end at the end of October
0:18 if nothing is done by November 1st,
0:21 which it looks like probably there won't
0:24 be. But the thing is this end and snap
0:27 benefits actually reveals a much bigger
0:31 underlying problem of just how dependent
0:34 businesses and people are on the
0:36 government. Because we all know that a
0:39 lot of people rely on SNAP benefits to
0:41 be able to get groceries and be able to
0:43 feed themselves and their families.
0:46 However, one thing you probably don't
0:48 know is just how reliant so many
0:52 different grocery stores as well as even
0:55 big grocerers like Walmart rely on these
0:57 SNAP benefits and just how much of a
1:00 revenue loss there's going to be due to
1:03 there being no more SNAP benefits. Right
1:05 now, you have everyday shoppers that are
1:07 cutting back right now on all different
1:11 types of unnecessary groceries. And 42
1:13 million Americans actually depend on
1:16 SNAP benefits. And the upcoming stop to
1:18 these benefits is forcing a lot of
1:20 people to already start rationing out
1:23 the groceries they're buying, downgrade
1:25 their meals or groceries or skip certain
1:27 groceries or some of their favorite
1:29 foods altogether. And let's start with
1:32 the small independent grocery stores.
1:34 Take this store for example called Save
1:37 A Lot in Springfield, Missouri. I
1:41 believe 65% of the sales of this small
1:43 grocery store actually come from
1:45 customers who pay with their SNAP
1:49 benefits. 65% guys, that is more than
1:52 half. I saw another story here in the
1:57 Bay Area where 90% of the store sales
1:59 come from SNAP benefits. So, if these
2:02 people suddenly have no money to go in
2:04 and spend, well, gets game over for
2:06 these stores. The store manager at this
2:08 Save a Lot grocery store is already
2:11 reporting fewer customers each day as
2:13 shoppers spend all their assistance
2:15 early in the month and then they stop
2:17 coming in. So, as a result, the store is
2:19 ordering less stock and they're having
2:21 to cut prices just to be able to keep
2:24 some sales coming in and they still end
2:27 up throwing away unused goods because
2:29 that's how it goes, right? You have a
2:31 grocery store. Groceries are perishable.
2:33 They can't save them forever. And here's
2:36 the thing, grocery stores already run on
2:39 razor thin profit margins. It's one of
2:43 those very small margin businesses, and
2:45 they really only make a couple of
2:47 pennies on the dollar. So, they they
2:49 rely on bulk purchases. They rely on
2:52 selling a lot of volume in order to make
2:54 their money. And the owner of this Save
2:56 A Lot grocery store says if sales dip
2:59 for just a couple of months, he may have
3:01 to close his doors for good. So these
3:04 grocery stores cannot survive more than
3:07 two or three months tops without
3:09 receiving these benefits. You would
3:10 think it'd be one thing for people not
3:12 to get them, but actually these grocery
3:14 stores could be shutting down by the
3:17 thousands or hundreds of thousands if
3:19 people cannot get these benefits. And it
3:22 just goes to show you how reliant our
3:24 entire economy is on government
3:27 assistance, which is not a good thing.
3:29 And by the way, I am here at the
3:32 waterfront in downtown Tibber. And I had
3:35 to do one more video over here before I
3:37 left because it is just so beautiful out
3:40 here. And I'm going to miss seeing these
3:42 views until next summer heading back to
3:45 Florida in about a week or so. And the
3:47 thing is this grocery store slowdown
3:49 doesn't just affect the grocery stores
3:52 or the people who receive SNAP benefits.
3:55 It also affects local distributors and
3:58 suppliers. For example, you have a bread
4:00 or milk delivery driver now delivering
4:03 25 units instead of 100, shrinking
4:04 income throughout the local supply
4:07 chain. This can also lead to layoffs as
4:09 if there's not as much delivery needed
4:10 to be done. Well, then they're going to
4:12 start letting people go or cutting back
4:15 on people's hours because there's just
4:17 not as much work to go around. So, you
4:19 can see it has this big ripple effect
4:21 throughout the economy. And some people
4:23 are even facing a double threat. Like
4:26 for example, here's a woman that
4:29 receives SNAP benefits, okay? And she
4:31 also works at a grocery store and she's
4:35 a cashier. And if the benefits stop, not
4:36 only is she going to have a hard time
4:38 affording groceries, but she might
4:41 actually lose her job working at the
4:44 grocery store because there's no SNAP
4:46 benefits. So, it's it's kind of wild,
4:48 guys, when you really look at the
4:50 problems with this and how much people
4:52 stand to lose. It's kind of shocking.
4:55 Like I wasn't even aware that it really
4:58 runs this deep into the system and how
5:00 much SNAP benefits actually keep the
5:03 grocery sector of the economy going. And
5:05 I'm not advocating for, you know, having
5:08 everybody rely on it. I'm just kind of
5:10 shocked by how deep the roots of this
5:12 actually go. And then it brings us to a
5:14 grocery store like Walmart, which
5:17 Walmart is actually the largest grocery
5:19 store in the country now. In fact,
5:23 Walmart has more grocery sales than any
5:25 other grocery chain. Now, Walmart has
5:28 actually seen their US sales increase
5:32 4.6% year-over-year. So, they're still
5:34 doing pretty good. And foot traffic,
5:36 according to Placer.ai,
5:40 has risen 1% year-over-year in the last
5:43 quarter. But even with this increase in
5:46 sales, the CEO of Walmart says that
5:49 middle and lower income customers are
5:51 avoiding purchasing merchandise in
5:54 discretionary categories where prices
5:56 have gone up. And in order to fight
5:58 against this, Walmart has actually
6:02 rolled back the prices on 7,400 of its
6:05 products during the second quarter. And
6:08 that is 2,000 more roll backs than it
6:11 did just one year ago. And the CEO says,
6:13 "We're keeping our prices as low as we
6:16 can for as long as we can." So, they are
6:19 really trying to get people to spend
6:20 even if they don't have the money right now.
6:32 So, even a retailer that's doing really
6:34 well right now like Walmart stands to
6:37 lose billions of dollars because of the
6:39 cut back in the SNAP benefits. Take a
6:42 look at this. When the benefits end,
6:46 Walmart, since they captured roughly 26%
6:48 of the annual SNAP grocery spending last
6:51 year, SNAP shoppers spend on average of $2653
6:53 $2653
6:56 annually at Walmart. And if the SNAP
6:59 benefits are halted in November, Walmart
7:02 could lose out on $2 billion in sales
7:04 since the government spends about $100
7:08 billion annually or about 8.3 billion
7:10 per month on the program. And it's not
7:12 just Walmart that stand to lose a lot of
7:14 money. We talked about the local grocery
7:17 stores, but also other big retailers
7:20 like Target, Amazon, Dollar General,
7:23 Kroger. They actually capture a sizable
7:25 amount of the SNAP benefit shoppers as
7:28 well. So, this really just hits
7:31 everybody going down the entire supply
7:32 chain. And they even go on to say here
7:35 that listen, these smaller stores like
7:37 Dollar General probably stand to lose
7:39 the most because they're in rural areas
7:42 that really rely on SNAP customers and
7:44 their benefits. And these stores also
7:47 tend to hire employees who rely on those
7:49 benefits. So you're going to have more
7:51 people like this cashier, you know,
7:54 people that work at a store that's being
7:56 affected by this and are not getting the
7:58 benefits simultaneously. And that's why
8:01 so many Americans are willing to go to
8:04 great lengths right now in order to make
8:06 every single penny count because people
8:08 are kind of forced to cut back on things
8:11 and be more frugal. This is actually
8:13 having an impact not only on the way
8:15 people live but also on businesses and
8:18 their bottom lines. You see, this video
8:22 today is really a great lesson in just
8:25 how interconnected every sector of the
8:27 economy is. Because when one part starts
8:30 to falter, then it kind of puts the rest
8:32 of it on a wobble. So what people are
8:34 doing right now is people are doing
8:36 things like diluting their cleaning
8:39 products. You know, they're using less
8:41 toothpaste. They're finding ways to make
8:43 household supplies last longer, using
8:46 less paper towels, things like that.
8:48 Some are even buying meat in bulk, such
8:51 as half a cow, in order to save in the
8:52 long run. This is something that I
8:54 remember my family used to do when I was
8:56 growing up. In fact, we had an entire
8:59 freezer in our basement that was
9:01 dedicated to the cow that we would buy
9:03 every year. Can't remember if it was
9:06 half a cow or a full cow, but basically
9:08 we would buy that and that would be
9:10 enough meat to last pretty much most of
9:13 the year and it would be in this giant
9:15 freezer just filled to the max of all
9:17 the different cuts from the cow. But
9:19 because of these cutbacks in household
9:21 supplies, companies like Proctor and
9:23 Gamble, for example, are seeing
9:26 declining sales volume as consumers make
9:30 products stretch longer and don't buy as
9:33 much. Proctor and Gamble's fabric care
9:36 sales fell 2% with consumers using up
9:38 existing inventory instead of buying new
9:41 items. and private label generic brands
9:43 aren't gaining any ground on Proctor and
9:46 Gamble for example, showing that people
9:48 are simply consuming less overall. Like
9:50 when it comes to laundry detergent, for
9:52 example, people are using half doses.
9:55 They're using half doses of dishwasher
9:57 detergent. They're adding vinegar to
9:59 their laundry instead of fabric
10:01 softener. They're cutting paper towels
10:04 in half. They're skipping more name
10:06 brands for generic brands. And the smart
10:09 parents out there are actually not
10:10 taking their kids grocery shopping with
10:12 them anymore because you know how it is.
10:14 You have your kid in the shopping cart.
10:16 Oh, mommy, mommy, I want this. I want
10:18 that. And then in order to just get them
10:20 to shut up, you end up buying it. How do
10:21 I know that? Even though I don't have
10:23 any kids, because I used to be that kid.
10:24 I'm sure my mom's going to get a laugh
10:26 out of that one. So basically, people
10:28 are taking this approach where we're
10:31 going to make the products that we buy
10:33 last as long as possible and we're going
10:36 to wait until every last drop is gone
10:38 before we buy more. And when they do buy
10:40 it, they're buying it in bulk and buying
10:43 the cheapest version possible. So that
10:46 way you can make it last as long as
10:47 possible. And that's why the sales for
10:49 these products are falling. And some
10:51 people were able to achieve some sizable
10:54 savings from this. Like for example, one
10:56 family reduced their grocery bill from
11:01 $1,700 in July of this year down to $1,265
11:02 $1,265
11:06 in September, saving over $400 per
11:08 month. And how they did this was by
11:10 cutting back on consumption, monitoring
11:13 their usage, and buying cheaper versions
11:15 of everything. And a lot of these
11:17 corporations are like, "Oh, this is
11:19 going to blow over. You know, this isn't
11:21 going to last forever." Proctor and
11:23 Gamble executives told investors that
11:26 they expect spending to normalize to 3
11:29 to 4% growth eventually as people will
11:32 still need basic essentials. Well, yeah,
11:34 they will, but they might not buy it
11:36 from you. You guys sell name brand
11:37 products that are generally more
11:39 expensive, so they might start buying
11:41 the store brand of everything. But a lot
11:43 of families are saying, "No, I don't
11:46 think so." You know, the economy has
11:48 fundamentally changed right now for the
11:49 worse. And it doesn't seem like things
11:51 are going to get any better. It's not
11:54 like once 2026 rolls around, happy new
11:57 year, life is affordable again. No, it's
11:59 not going to be like that. So, a lot of
12:00 families are saying we're going to keep
12:03 our frugal habits indefinitely because
12:05 we're realizing this is the only way
12:07 that it makes sense to try and survive
12:10 right now. Now, that inflation seems to
12:11 be here to stay and the Fed really
12:13 doesn't care. They just cut interest
12:15 rates another 25 basis points, by the
12:17 way, as the inflation numbers continue
12:20 to go up. So clearly, they don't care
12:22 about that. They'd have no interest in
12:25 getting inflation back down to their 2%
12:27 target. So now that more people are
12:29 living paycheck to paycheck, they're
12:31 being forced to pinch pennies
12:33 indefinitely. And once you get used to
12:35 doing things a certain way, you just
12:36 kind of keep doing that. Now, I will say
12:39 that there are some benefits to this.
12:41 Like first of all, it teaches people how
12:44 to get by with less. You know, our
12:46 ancestors just going back a hundred
12:48 years ago didn't have half of the crap
12:51 that we have and they were able to live
12:53 decent lives and get by just fine,
12:56 right? But now today, everybody has to
12:58 have everything and they have to have it
13:00 yesterday. There's no patience either.
13:03 So, this is kind of like forcing people
13:06 to relearn how to budget, forcing people
13:10 to relearn how to live with less and be
13:12 content and satisfied with what they
13:14 already do have in life. And that's not
13:17 really a bad thing in 2025 when things
13:18 have really shifted in the other
13:28 Good thing I'm over here today. San
13:31 Francisco's covered in fog and we got
13:34 nothing but sunshine in Tibberon.
13:36 And here's the thing about groceries,
13:37 guys, and pretty much everything else
13:40 that has gone up in price over the past
13:43 5 years is these price increases are
13:45 going to be permanent. It's not like
13:48 next year or the year after that
13:50 everything is just going to get cheaper
13:51 again and it's going to go back down to
13:54 preandemic pricing. No, because
13:56 inflation reres havoc and it creates
14:00 permanent price increases unless we have
14:03 massive deflation in this country, which
14:05 looks like it's not going to happen
14:07 because of the Fed's interest rate
14:10 policy and possibility of going back to
14:12 quantitative easing very soon. Right
14:14 now, food at home inflation is running
14:15 at 2.7%
14:17 year-over-year according to the most
14:20 recent data. And that's higher than all
14:22 of last year. And if you're not happy
14:25 with the prices, well, doesn't matter.
14:27 Get used to it. It's pretty much what
14:28 they're telling us. Sure, you might see
14:32 individual prices for certain items fall
14:34 here and there depending on supply and
14:37 demand, but all in all, grocery prices
14:39 rarely ever come down. Part of the
14:41 reason for that is inflation. And a lot
14:44 of people don't realize because you save
14:47 in dollars and you spend in dollars.
14:49 Nobody really has gold and silver for
14:52 the most part that your purchasing power
14:54 is continuously being robbed every
14:55 single month that we get one of these
14:57 inflation reports and it's higher than
14:59 it should be. And here's the thing. When
15:03 prices go up for any one grocery item,
15:06 the grocery store is forced to raise the
15:07 price for the consumer. Because
15:10 remember, grocery stores operate on
15:12 razor thin margins. Just a couple of
15:15 pennies on the dollar in most cases is
15:20 1% 2% margins at best. Okay? And with
15:23 margins that low, they cannot afford to
15:25 absorb those price increases. So,
15:27 they're forced to pass it along to you.
15:30 However, if there's a decrease in an
15:33 item, for example, in price from their
15:35 supplier, they're far less likely to
15:38 pass along that decrease in price to
15:40 you, they're going to pocket that extra
15:42 money so long as they keep selling that
15:44 item. So, the experts say that the only
15:47 real way we're going to see a decline in
15:49 grocery prices, we have to see something
15:51 pretty dramatic happen. You would have
15:54 to see diesel prices, for example,
15:57 plummet through the floor in order for
15:58 grocery prices to go down because that's
16:00 the main way that groceries are
16:03 delivered to stores. And even then, even
16:06 if the supplier's prices go down to the
16:08 grocery store, the odds of the grocery
16:11 store passing along big savings to you,
16:13 the customer, are not very likely. Maybe
16:14 they'll give you a small discount or
16:16 they'll put some of that stuff on sale
16:18 if they end up accumulating too much of
16:20 it, but that's it. Really the only thing
16:22 that you can do in this economy right
16:25 now is you have to make more money.
16:27 Guys, I keep stressing this to people.
16:30 Like along with paying off debt and not
16:32 accumulating more debt so that way you
16:34 have more money to go around for your
16:36 monthly budget, the best thing that you
16:39 can do besides that is to earn more by
16:41 whichever means necessary as long as
16:43 it's legal, of course. And honestly,
16:46 it's in your best interest to look for a
16:49 supplemental source of income right now.
16:51 No matter how secure your job is or how
16:53 secure you think your job is, because
16:56 really this whole job market is at a
16:57 tipping point. You know, the other day
17:00 we talked about how Amazon is going to
17:03 lay off 30,000 people. It's 14,000 for
17:05 now. Some of them right here in the Bay
17:08 Area and who knows when the other 16,000
17:09 are going to get axed, but you know,
17:11 it's going to come. And also UPS
17:14 announced that they have cut 48,000 jobs
17:18 in the first 9 months of this year. So
17:20 just those two alone is almost six
17:23 figures. You know, over a 100,000 people
17:25 losing jobs just from two companies. And
17:27 if you are one of these people who loses
17:29 a job, your odds of finding a new one
17:31 right now aren't too good because there
17:35 are only 0.98 job openings in the United
17:37 States for every person looking for a
17:40 job. So for the first time in a while,
17:42 there are less job openings than people
17:44 who are looking for one. And that is not
17:47 great news if you are getting a layoff
17:50 notice right now. And here's the thing,
17:52 that's a dramatic shift in the market
17:55 because back in March of 2022, there
17:58 were two jobs available for every one
18:01 person seeking a job. So the job market
18:04 has been cut more than in half just in
18:06 the past 3 years. And that's why back
18:08 then, you know, companies were offering
18:10 all kinds of sign on bonuses, giving
18:12 people the opportunity to work from
18:13 home, do whatever you want, just work
18:16 for us because we need the help. And now
18:19 look how much that landscape has changed
18:21 just in the past 3 years. So, if you
18:24 want to protect yourself from this
18:26 current economy, really the only thing
18:28 you can do is make sure that you are
18:31 earning considerably more than what
18:34 you're spending each month and have
18:36 those earnings come from at least two,
18:38 preferably more sources of income. So
18:40 that way, if one source of income goes
18:43 away, you still got something. And I
18:44 know in the past people didn't have to
18:47 do that to survive, but times are
18:48 different now, and this is where we're
18:50 at. So, you really kind of have to do
18:53 this now just to have it as an insurance
18:55 policy. And then if you're making
18:57 considerably more than you're spending
18:59 each month, this is also going to help
19:02 you save more for a rainy day, increase
19:05 your emergency fund, and actually have
19:08 more to rely on in case you do lose your
19:09 job. Like, regardless of whatever the
19:12 government data says right now, you have
19:14 to act like we're in a recession and
19:16 that you could lose your job next week.
19:19 If you have that sort of mentality and
19:21 you shift your saving and spending and
19:24 earning habits towards that mentality,
19:25 you're going to do well right now.
19:27 You're going to be okay. But everybody
19:29 who ignores this and thinks everything's
19:30 going to be fine and continues to spend
19:32 more than they earn, they're the ones
19:34 who are going to be crushed when they
19:36 lose their job. So, if you enjoyed this
19:38 video, make sure you subscribe to the
19:39 channel. And if you don't want to wait
19:41 for my next video to come out, check out
19:43 this one on the screen right over here.
