Last week, New York City Mayor Zohran Mamdani said he needed $70 million to launch his city-run grocery store program, even as the city faces a $5.4 billion budget gap.
Mamdani has not provided details on how the city would operate the five grocery stores—one in each borough—other than saying the city would offer subsidies to private businesses. The stores would not pay property taxes or rent to help keep prices down.
We posed the question on LinkedIn: Do you think Mamdani will get his $70 million for city-run grocery stores? An overwhelming majority—86%—said no, and many comments pointed to the fact that city-run grocery stores simply do not work.
“The grocery business has crazy low margins when you know what you’re doing. I can’t imagine the losses when you don’t,” said John C. “You’re better off taking the money and giving it to people who live in a food desert for free delivery from outside the area.”
“Oh, he’ll probably get the money … but it won’t work,” said Craig B. “Like others have said, it’s a low-margin business that requires very large-scale operations to survive. Or charge 20% more for everything. And if food deserts are the problem … help deter retail theft … you may find stores will gladly stay in the area, along with lower property tax rates.”
“Just imagine how much better that money would be used by a private grocery firm,” wrote David F. “The economic illiteracy coming out of the country’s financial capital is astounding.”
“Ask Chicago about city-run grocery stores,” said Larry E. “They’ll burn through that $70 million and come back asking for a lot more.”