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Forget fixing potholes and public parks. New York City could soon be running grocery stores.
New York City Mayor Zohran Mamdani plans to open five government-owned grocery stores to help bring some of his constituents cheaper grocery prices. However, the grocery stores and bodegas already serving the city are challenging the forthcoming competition as unfair.
“In the wealthiest city in the richest country in the world, no one should have to wonder how they’ll afford the food they need to feed themselves or their families,” Mamdani said this week.
Mamdani’s plan
The plan is to have one of these stores in each of the city’s five boroughs.
Those stores intend to provide a 30% discount on meat, produce and other typical items. Along with being taxpayer-funded, they’ll be able to sell at lower prices because there’ll be no expectation of turning a profit, and the stores won’t need to worry about rent and other operating expenses.
They will not sell hot food, cigarettes, beer and other items of that nature.
“For people who are poor and have access to these stores, it should be very helpful,” Marion Nestle, emerita professor of nutrition, food studies, and public health at New York University, told Straight Arrow. “They should be able to save quite a bit of money.”
New York is the second most expensive city to buy groceries in the contiguous U.S. The first is San Francisco.
Mamdani campaigned on affordability and helping the working class. Anyone will have access to these stores once they open, and those advocating for them to impact lower-income workers will have a keen eye on the chosen locations.
“What we look at is typically between a mile and a mile and a half, walking distance,” Phil Lempert, editor of the Lempert Report and food industry analyst, told Straight Arrow. “In a lot of these areas, people frankly don’t have cars. They rely on public transportation. So, it’s those people that are in walking distance who are really going to benefit from this.”
While exact locations have not yet been determined, the plan is for the first store to open in the Bronx by the end of 2027, with the others open and operating by the end of Mamdani’s four-year term in 2029.
The city has allocated $70 million to get these stores up and running. Then, it will need to continue supplying public money to keep the lights on and plug the gap in stocking steeply discounted groceries.
“With the kind of cuts that they’re talking about, 30% discounts on certain things, there’s going to have to be more subsidies,” Lempert said.
Concerns
For grocery store and bodega owners in the areas where these stores would open, this may not be the most welcome news.
“It’s going to put a lot of independent bodegas and retailers out of business,” Lempert said.
The president of the National Supermarket Association criticized the plan as creating an uneven playing field since these new stores don’t have the burden of rent, taxes and more. Grocery stores already operate on razor-thin profit margins of about 1% to 3%, according to several estimates.
United Bodegas of America, a group representing tens of thousands of bodegas, also shared their concerns, calling the move “despicable and unethical.”
The Multicultural Business Coalition, an immigrant-led business group, has actually decided to file a lawsuit over Mamdani’s plan.
Another concern comes over the locations of these stores.
“It’s so important to know where these are going to be located, and it’s only one store in an entire borough, and some of the boroughs are harder to get around in than others,” Nestle said. “What’s the accessibility?”
And while there’s a plan to initially fund these stores, that money will need to keep coming in.
“You’re going to have to sustain that kind of subsidy for these markets to really live up to their promise,” Lempert said.
What’s next?
Mandani has put out a request for proposals to find a firm or grocer organization to run these stores. The chosen operator will end up running the day-to-day operations.
Experts Straight Arrow spoke with agreed this is a very important decision if the city wants this to work.
“My only concern is that the city, with all its good intentions, doesn’t understand the grocery business,” Lempert said. “It’s a very different business than running other municipalities. So, if they get a good operator, it has a chance for success.”
“You’ve got to have people running the show who believe in it and want to make it work and do everything possible to make it work,” Nestle said.
The city will be looking for operators with a specific skill set. Lempert warned running these kinds of grocery stores is much different than a major chain.
“If you take a store manager out of Wegmans or Gelson’s or Publix, and put them in there, that’s not going to work,” Lempert said. “You need a store manager who’s going to come from the inner city and really knows his customer base.”
Other cities have either tried this or discussed this plan before, but not on the scale Mamdani is attempting.
Chicago Mayor Brandon Johnson campaigned on a similar project in 2023, but several years later almost no progress has been made.
Atlanta is successfully operating a municipal grocery store, although it’s only one store and there are several differences, including that the store is operating through a private-public partnership.
“It’s always a wonderful thing to have a really good grocery store in your community,” Nestle said.
Whether this plan will successfully help New Yorkers in need remains to be seen. After finding an operator and locations, the Bronx will be the first test.
“That’ll be the model to see whether other stores can work,” Lempert said. “It’s going to be an experiment.”
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