Groceries as a Benefit: As Workers Struggle With Living Costs, Employers Help Cover Basic Needs

As the cost of living in the U.S. has climbed sharply in recent years, Stevi Evans, the head of benefits at Weight Watchers, has heard more often from the company’s hourly workers who struggle financially. Salaried employees might be bothered by increases in their health-insurance premiums, for example, but Weight Watchers’ hourly workforce, many of whom are part-timers and work second jobs, have been pinching every penny. The basics are increasingly hard to come by: Food prices in the U.S. rose nearly 24% from 2020 to 2024, according to the Consumer Price Index, and the cost of transportation grew more than 34% over the same period. Credit-card delinquencies are up in every state since 2022, reports the Urban Institute, a non-profit research organization. Wellness benefits have been growing incrementally. Since 2018, Weight Watchers offered a $200 annual wellness reimbursement for its hourly employees to use on things like sneakers and workout clothing. Employees liked it and used it, said Evans, but as the cost of living increased, she realized needs were growing even more basic. Evans has stay attuned to the social determinants of health, the non-medical factors that affect health outcomes and quality of life, for example economic stability and access to healthcare and education. She wanted to help satisfy those needs. “We heard our hourly population talk about economic hardships,” Evans said. “That’s when I thought, ‘Why don’t we just include groceries in the wellness reimbursement?’” So last year, Weight Watchers added them to the list of reimbursable expenses, and requests “rolled in like crazy,” she said. Ninety-two percent of hourly employees now use the reimbursement, said Evans. And 77% of those use it for groceries.Evans expected to see receipts from specialty grocery stores, indicators that people might be using it to treat themselves to something novel (which, for the record, she would have no problem with), “but these are from Walmart,” she said. People need the essentials.The Basics Can Include Everything from Utility Costs to EmergenciesIn years when employers were hunting fervently for workers, many companies engaged in a spirited game of benefits one-upmanship, offering the most unusual–and often eyebrow-raising–perks to get attention and gain a competitive edge. Most recently, those benefits ranged from pet leave to ketamine therapy. Before that, it was in-office ping-pong tournaments and beer taps that flowed any time of day.Now, as companies freeze hiring and many costs continue to mount, employers are increasingly aiming at the base of the needs hierarchy, furnishing essentials like food, shelter, and expanded healthcare.Sometimes it’s an emergency. Companies scrambled to supply basic provisions to workers in Los Angeles after wildfires ruined huge parts of the city in January. And now that natural disasters are endangering areas not historically considered to be disaster-prone, like Asheville, N.C., companies are bolstering business continuity plans with disaster preparedness plans.Natural disasters, rising auto-and-home insurance premiums, and mass corporate layoffs mean that many people are anxious about their financial well-being and looking to their employers for help. When Gallup asked survey-takers in early 2025 to identify America’s problems, economic issues topped the list. Sixty-seven percent said the affordability of healthcare is “a very big problem,” while 63% said the same about inflation, and 53% pointed to the number of Americans living in poverty.Why not just raise worker salaries? Companies have to stay competitive on that scale, but that’s often not enough to improve multifaceted financial health. “If you want to become a stand-out employer,” Manisha Thakor, founder and CEO of MoneyZen Wealth Management, wrote recently in HBR, “one of the most effective HR benefits you can provide is a base layer of what I call ‘financial health,’” meaning that employees’ basic financial needs are met and they understand how their money choices affect their lives. Does Worker Financial Well-Being Affect the Bottom Line?Employers are linking financial health with mental health with workplace productivity. Energy tech company Enphase Energy makes financial benefits a pillar of its overall wellness strategy, which also includes things like healthcare.Others are linking it to retention and engagement. During a From Day One virtual conference in March, Jason Simmonds, the global head of employee experience at Morgan Stanley, noted that some employees have even gotten themselves out of debt thanks to the company’s financial wellness benefits—and highlighting their success has increased uptake of the program.One popular way to cover employees’ basic needs is a lifestyle spending account, or LSA. Tom Kelly, principal consultant in the health practice at benefits brokerage Gallagher, told From Day One that there’s been an uptick in companies opting for this benefit.LSAs are employer-funded accounts that allow employees to file for reimbursement for various expenses designated by the employer. The list could be very long, and full of necessities or luxuries, like groceries, gas or other transportation costs, childcare, tuition and education costs, financial counseling, running shoes, fitness classes, or nutritional supplements. While the list is created by the employer, it’s up to the employee to chose what serves them best. The “ecosystem” approach recommended by Thakor in her HBR article is one that considers employees’ unique experiences in favor of a generalized approach.Amanda Verdino, a director at Forma, which runs lifestyle spending accounts, told From Day One that the employers that do use them are rapidly expanding the list of reimbursable expenses. It’s not uncommon for employers to cover food and tuition assistance benefits through their LSAs. One of Forma’s clients, a sportswear brand, just added the cost of heating and cooling to its list of reimbursable expenses.According to Forma’s 2024 LSA benchmark report, food expenses ranked second in terms of number of transactions, right after fitness-related expenses. Verdino said tuition assistance is rising in popularity in both availability and utilization, as is commuter assistance and childcare. Regardless of category, utilization for LSAs is high. For every dollar an employer offers in the food category, employees spend 75 cents.LSAs aren’t all. At Gallagher, Tom Kelly noted that their clients are rolling out grocery savings programs as well as home and car insurance discounts to great success. “For discount marketplaces and purchase programs, we see really high utilization, to the tune of 70% to 90% of employees using these perks platforms on a regular basis.”Companies are conducting benefit gap analyses to understand the needs of their workforce based on their demographics, he said. And many confirm that employees need help with the basics.Emily McCrary-Ruiz-Esparza is an independent journalist and From Day One contributing editor who writes about business and the world of work. Her work has appeared in the Economist, the BBC, The Washington Post, Inc., and Business Insider, among others. She is the recipient of a Virginia Press Association award for business and financial journalism.(Featured image by Cyano66/iStock by Getty Images)