Wednesday, May 27, 2009

Costco Will Accept Food Stamps at 2 Stores

May 27, 2009, 7:30 am

Costco Will Accept Food Stamps at 2 Stores

Councilman Eric N. Gioia outside the Costco store in Long Island City, Queens, last year.

Citing the economic recession, Costco has announced that it will begin accepting food stamps in its two New York City stores — one in Astoria, Queens, and the other in Sunset Park, Brooklyn — on a trial basis, starting next month. If the experimental program shows there is sufficient demand by food-stamp users, and does not harm efficiency, the company said, it will begin accepting food stamps at all of its New York City stores, including a new one that is planned for East Harlem.

Costco had come under criticism recently for being one of the few large food retailers that refused to accept food stamps. Whole Foods, Trader Joe’s and Wal-Mart all accept food stamps.

Costco said in a statement that it did not have any current plans to roll out the food stamp program beyond New York City. The two New York City stores were selected for the trial because of the high numbers of food stamp recipients in the surrounding areas, the company said.

In a statement, the chief executive of Costco, Jim Sinegal, said:

In the past, we have not been convinced that there was sufficient demand among our membership to justify the expense and possible inefficiencies associated with accepting food stamps. However, we are mindful that many of our fellow citizens are facing unprecedented economic challenges at this time, and it seemed to us that it was worth reconsidering our position in that light. We are taking this step to see if can be a part of the solution to the financial burden that many people are facing today.

Eric N. Gioia, a Queens city councilman whose district includes the Astoria Costco, which is within walking distance of several large housing projects, wrote a letter last November asking the company to change its policy regarding food stamps. And in East Harlem, members of the local community board had also pressed the issue.

Last week, William C. Thompson Jr., the city comptroller and a mayoral candidate, pressed raised the food stamp issue with Costco, asserting that it was in Costco’s interests to accept food stamps given the economic climate. (The city currently holds around $66 million in Costco stock through its various pension funds, which Mr. Thompson oversees.)

The switch to accept food stamps relies in part on technology, as Costco needs to figure out a way to limit the use of food stamps to eligible items.

This year, paper-based food stamps are being fully phased out in favor of an entirely electronic card-based system, which simplifies the logistics for the company.

City officials welcomed Costco’s announcement. Mr. Gioia first discovered Costco didn’t accept food stamps in 2007 when he went on a food stamp diet and investigated whether they could be used in Costco. “By accepting food stamps, Costco will allow more New Yorkers than ever to have access to fresh, healthy foods at wholesale prices — and it will be good for Costco’s bottom line,” Mr. Gioia said.

Mr. Thompson said in a statement, “Costco’s new policy will be a welcome addition to the neighborhood. Having more options and being able to buy in bulk will allow financially strapped families to stretch their dollars further.” He added, “Further, its corporate reputation will surely be improved as it is now joining its competitors in accepting food stamps. This is a win-win for all involved.”

The food stamps cannot be used towards the Costco membership fee.

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