Chelsea Eats Debit Card Analysis Shows Most Expenditures Were at Market Basket

An analysis of the Chelsea Eats Debit Card program by the Harvard’s Rappaport Institute and released this month shows that half of all expenditures on the card, which has no limitations on purchases, were made at Market Basket, Compare Supermarket, Stop & Shop and Wal-Mart – presumably mostly for food.

Additionally, at least 75 percent of the expenditures were made at outlets that primarily sell food.

City Manager Tom Ambrosino said most of the expenditures were at supermarkets, and others were at local food markets and corner stores – showing what he said was a successful program to feed people with dignity in a crisis.

“The report confirms our initial expectation when we started the program,” he said. “That residents in need would spend these funds responsibly, and that the level of misuse would be immaterial.”

The analysis was done by Professor Jeffrey Liebman and looked at spending records for those using the Chelsea Eats Debit Card, which was a program initiated by the City last year to move families out of food lines and allow them to buy food at local stores. The program began in November 2020 with the first payment, and there were skeptics due to the fact that the card had no restrictions on purchases as EBT benefit cards do. It was paid for with City money and federal CARES Act money at first, and later was supported by several foundations, health care institutions and also activists in favor of the Universal Basic Income (UBI) idea – equating the Eats program with UBI.

Ambrosino said at the time of inception that he chose to trust those who were picked in the lottery for the Eats program, and he also said it was critical to get people out of the COVID food lines during the winter months – which at the time were fast-approaching.

Professor Liebman said that given the fact that those using the program were recruited from food lines in Chelsea, it wasn’t a surprise to find that most of the purchases seemed to be made on food.

“Given that Chelsea Eats applicants were recruited largely from food pantry users, it is not surprising that nearly three-quarters of card spending is at outlets that primarily sell food,” he said. “It is also possible that the branding of the initiative as the “Chelsea Food Debit Card Program” encourages participants to use the cards at groceries and other purveyors of food. In our Chelsea Eats research surveys, we are collecting data on food consumption and expenditures and will be assessing the extent to which the program leads to greater food adequacy and reductions in food insecurity.”

The study looked at purchases on 2,001 Eats cards from Nov. 24, 2020 to March 2, 2021 – approximately 47,624 transactions for a total of $2.08 million. One of the limitations was that they did not know what was purchased with the cards, but only the vendor and type of store it was.

Still, in the analysis, they found that 73.3 percent of spending, or $1.5 million, occurred at places where food is the primary product – such as grocery stores, wholesale clubs, markets, convenience stores, and restaurants.

“Indeed, 32 percent of total spending was at Market Basket grocery stores, overwhelmingly at the Chelsea location,” read the report. “Large amounts were also spent at Compare Market, at BJ’s and Costco, and at the La Economica and Vincentinos meat markets. The largest amount of restaurant spending occurred at Dunkin, McDonald’s, and Burger King, though large amounts were also spent at local Chelsea locations such as Broadway House of Pizza, Delicias Salvadorenas, and Taqueria El Charrito.”

Market Basket was the largest vendor for spending on Chelsea Eats, with $666,724 spent there – and $623,143 of those expenditures came at the Chelsea location. Compare Supermarket had $189,366 in expenditures, while Stop & Shop had $39,789 and Walmart had $37,102.

BJ’s Wholesale Club had $149,952 spent in the Revere location, and $35,670 spent at the Medford location. Costco in Everett saw $48,825 in expenditures.

Some 56 percent of expenditures were in Chelsea.

One area of note was that many users spent Eats money on utilities and professional services, just over 4 percent of the total expenditures. That included bills like Comcast, Eversource, National Grid, T-Mobile, MetroPCS and AT&T.

Liebman said that finding was not a surprise either, though it was a surprise that few used the Eats card to pay rent.

“Given that our baseline survey found that a significant minority of households in this sample are behind on utility payments or had had their phone service disconnected because of unpaid bills, it is not surprising that some of the Chelsea Card money is spent on these services,” read the report. “We see smaller amounts spent on financial services such as insurance, and on beauty, laundry, and health care services. Even though our surveys have shown that many Chelsea Eats families are struggling to pay rent, less than $2,000 of the $2.1 million in expenditures are clearly identifiable as rent payments. Presumably few landlords accept Visa, so, despite the need, families are unable to use their cards to pay rent.”

Likewise, just under $20,000 was spent on gasoline or at gas station/convenience stores.

Not all spending was benevolent, however, but the indulgences were small and minute compared to the overall purchases. Liebman noted that 0.4 percent, or $8,000, was spent at liquor stores and smoke shops, though that number could be higher.

“Of course, it is possible to buy alcohol and cigarettes at grocery stores and convenience stores too, so total spending on these products could be somewhat larger,” read the report.

Other expenditures included:

•Hair, Nails and Spas – $3,988

•Laundry – $3,130

•Entertainment (Game Stop, Planet Fitness) – $1,531

•Airfare – $921

•Car Wash – $315

The Chelsea Eats program was extended through June, and possibly longer if revenues and donations continue to come in. Liebman’s analysis is part of a bigger study. His research team is conducting a larger evaluation of the program by comparing outcomes of Chelsea Eats lottery winners with those of applicants who were unsuccessful in the lottery.

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