Mobile grocers cashing in with food stamp users

Randy's Fine Foods Grocery Store on Wheels vans Friday, Aug. 3, 2012, in Houston. The company accepts food stamps and cash for the mobile grocery service. Randy's Fine Foods Grocery Store on Wheels vans Friday, Aug. 3, 2012, in Houston. The company accepts food stamps and cash for the mobile grocery service. Photo: James Nielsen, Chronicle Photo: James Nielsen, Chronicle Image 1 of / 3 Caption Close Mobile grocers cashing in with food stamp users 1 / 3 Back to Gallery

HOUSTON — At the corner of Milby and Navigation in Houston's East End, business at Randy's Fine Foods is booming.

For about 20 years, Randy's mobile food trucks have traveled under the radar of the privileged, circulating in neighborhoods and delivering food in Houston and across the state. Randy's and a handful of companies like it — Boxes and Bags Mobile Grocery and Bag Lady on Wheels — go to areas where people are without a car or a local grocery store, or both.

Why is business booming? The Lone Star Card, the food stamp-enabled debit card that has soared in use over the past two years, with a million more Texans added since 2008. As of July, more than 3.6 million had Lone Star Cards.

“We rarely get cash,” said Keidrick James, a Randy's manager, who estimates “99.1” percent of the company's customers are Lone Star Card holders.

Randy's drivers sell what the company bought from grocery behemoth Sysco Foods — frozen meat, breaded shrimp, catfish nuggets and chicken tenders.

But junk food is the big seller. Pop Tarts, Famous Amos and Oreo cookies. Honey buns, candy bars and corn dogs. Laffy Taffy and cheesecake. Pickles are the only vegetable listed on a Randy's menu.

In the nation's fourth-largest city — a place trying to forget it once was named the nation's fattest, where there are about 4,000 convenience stores and an ongoing grocery war in the city's better neighborhoods west of downtown — it doesn't seem like there's a shortage of high caloric and, some would argue, junkier foods.

And the mobile food truck model is a striking one, especially as several states consider taxes on sugary snacks or have sought — as Texas unsuccessfully tried — to restrict food stamp clients from buying junk food.

Officials with the U.S. Department of Agriculture's Food and Nutrition Services confirmed that Randy's, Boxes and Bags Mobile Grocery and Bag Lady on Wheels all are approved vendors in the food stamp program, which now goes under the name of SNAP, the Supplemental Nutrition Assistance Program.

The Texas Health and Human Services Commission, which runs the Lone Star Card program for the USDA, has doubts about grocery store vans whose customer base is a captive Lone Star Card market.

“Vans that deliver food may provide a convenience for families without transportation, but it comes at a high price,” said Stephanie Goodman, HHSC spokeswoman. “The prices can be so high that it hurts families struggling to make ends meet in the long run.”

It's a model that raises questions about whether the program is more corporate subsidy than nutrition plan.

“Who needs junk food on wheels?” said Michele Simon, president of EatDrinkPolitics, a watchdog group that issued a report this year calling for more transparency about how much all grocery retailers the USDA approves make from the food stamp program.

Owners of other food-stamp van companies declined to talk to a reporter about their businesses.

“I have no interest in that,” said Judy Ellis, owner of the Sunnyside-based Bag Lady on Wheels as she was preparing two trucks to deliver food to customers in Port Arthur who had placed their food orders with her.

Randolph Diggs, Randy's owner, did not return calls for comment. Kevin Cooper, Bags and Boxes Mobile Grocery's CEO, also declined to talk about their business .

The amount these vendors receive from sales is protected by the USDA as a trade secret and “can only be disclosed for purposes directly connected” with the administration of the agency's program.

In other words, taxpayers are not allowed to see how much of their money goes to each USDA SNAP-approved grocer or mobile food truck. The Argus Leader of South Dakota has sued the USDA for access to the information. The suit is pending.

Millions in taxpayer dollars also are spent on efforts to re-train food stamp recipients about nutrition and how to stay away from the “middle aisles” of grocery stores, the area where most snack food resides.

“We hope that people on food stamps will make good decisions about how to use those benefits,” Goodman of HHSC said. “But that ability, of course, can be greatly affected by where you live.

“Many people on food stamps don't have access to convenient transportation, and some live in neighborhoods that don't have a store offering a good selection of healthy foods at a reasonable price,” she said. “That creates double the challenge when trying to put healthy meals on the table.”

terri.langford@chron.com