Pennsylvania grocery industry heads into the fall confronting a state budget that keeps taxes steady while mandating an EBT chip transition and reviving a swipe‑fee fight that could return as much as $350 million to retailers and shoppers.
Budget holds steady, no new taxes
State lawmakers approved a budget that leaves out fresh taxes, fees or sweeping regulations, a point the Pennsylvania Food Merchants Association says eases pressure on the sector.
“Not allowing additional new regulations, reducing regulations and keeping harmful taxes and fees at bay is a really big part of what we do all the time,” said Alex Baloga, president and CEO of the association.
The package also funds the Fresh Food Financing Initiative and retains the corporate net income tax, but the most‑noticed line is the directive to upgrade EBT cards to encrypted chips by early 2028.
EBT cards move to chip technology
The budget authorizes replacing magnetic‑stripe cards with chip‑enabled ones, a shift already underway in neighboring states.
Recipients will receive new cards, and the association promises technical support and guidance through the rollout.
Related: Hussmann Evolve Roadshow Guides Retailers Through Refrigerant Transition
What each store must do will differ; larger chains may need to update point‑of‑sale hardware, while smaller operators could rely on vendor upgrades.
Swipe‑fee legislation could return hundreds of millions
House Bill 2090, cleared by the House Finance Committee, would end swipe fees on the sales‑tax portion of transactions, with Senate Bill 1202 mirroring the proposal.
Baloga called the move “a big deal,” noting estimates of $325 million to $350 million returning to Pennsylvania’s economy.
The savings could lower checkout costs for both merchants and consumers, a relief the association says is especially vital for small businesses.
Legislators will revisit the bills after the session ends in December, potentially restarting the debate in 2027.
The effort reflects a broader concern: swipe fees rank among the top three expenses for many retailers, a fact that shapes pricing and staffing decisions.
While the state pushes these changes, the federal cost‑sharing rules of the One Big Beautiful Bill Act remain a worry, as states cannot fully replace the federal funding that programs like SNAP rely on.
Related: Stop & Shop Reopens South Boston Store After Grand Renovation
Technical assistance will be coordinated through the association and the commonwealth, ensuring that even the smallest corner store can comply without major disruption.
Baloga emphasized that Pennsylvania shoppers behave much like those elsewhere, seeking value and making more frequent trips across different retail channels.
“The basket size remains relatively steady, but people are definitely making trips to different channels and different retailers probably more frequently than they had in the past,” he said.
The last federal shutdown highlighted how deeply the state’s food economy depends on the SNAP program, touching everything from farms to wholesale distribution.
Because Pennsylvania is not a SNAP waiver state, the association has opposed proposals to change that status, arguing that customers should retain choice regardless of benefit use.
Electronic shelf labels have drawn criticism as tools for “surveillance pricing,” but Baloga clarified they mainly track product freshness and keep shelf and register prices aligned.
Related: Grocery Outlet Raises Over $4M for Food Banks
He distinguished this from “surge pricing,” which he said appears in ride‑share apps or ticket sales and would likely drive shoppers away from grocery aisles.
The retail market mirrors national trends, with consolidation among large chains and growth in convenience‑store formats.
Independent operators remain, though some smaller owners have exited amid a competitive environment that squeezes margins.
The budget continues a $2 million allocation for the Fresh Food Financing Initiative.
Other topics such as minimum‑wage adjustments, cannabis regulation and skill‑game legislation were omitted, leaving open the possibility they could reappear after the November 3 election.
The current two‑year legislative session ends in December, meaning any unresolved measures, including the swipe‑fee bills, will likely be revisited in the next session.
