Selling to Poor, Stores Bill U.S. for Top Prices
By ROBERT PEAR

Published: June 6, 2004

WASHINGTON, June 5 — Federal and state officials are expressing alarm about the proliferation of food stores that cater to low-income people but charge more than other grocery stores, thus driving up the cost of a major federal nutrition program.

The program, the Special Supplemental Nutrition Program for Women, Infants and Children, or W.I.C., helps feed 7.7 million people each month by providing vouchers for infant formula, juice, eggs, milk, cheese, cereal and dried beans. Now a growing number of stores are selling only to W.I.C. families, accepting only the government vouchers, not cash, for payment.

About 47 percent of all babies born in the United States each year participate in the program.

"The rise in W.I.C.-only stores is a fairly recent phenomenon," said Eric M. Bost, under secretary of the Agriculture Department, which runs the program. Analysis of food costs in California and Texas shows that "W.I.C.-only stores in these states have higher prices, on average, than other authorized retailers," Mr. Bost said.

The stores have found a niche in the market that Congress did not anticipate. Proprietors said the stores had become popular because they offer convenient locations and superior service.