The battle over Mayor Zohran Mamdani’s city-owned grocery store plan is intensifying, as small business owners challenge the proposal in court, warning it could threaten bodegas and independent grocers across the city.

What started as a local fight is becoming a bigger political battle over how New York City should tackle the high cost of groceries — and who could pay the price.

Small Business Administration Administrator Kelly Loeffler was in Queens on Tuesday to share the Trump administration’s support for the business owners challenging the mayor’s plan.

“We’re here to let the small business owners know that we stand with them… this administration stands with free enterprise capitalism,” Loeffler said.

Business owners are already suing to stop the city from opening five grocery stores, one in each borough. The city has said the goal is to lower food costs, with some items priced 30% less. Critics say small businesses won’t be able to compete.

“This is not about Democrat or Republican. Let’s work together to benefit all of New York, not compete using the tax money to compete with the bodegas, supermarkets,” said Francisco Marte, of the Bodega and Small Business Group.

Loeffler said the SBA was not launching or announcing any legal action of its own, but said “we’re fighting for them. We’re looking very closely at what’s happening.”

The city has said five stores won’t put bodegas out of business and has pointed to other city-supported markets that already coexist with neighborhood stores. Still, business leaders question how much reach five locations will actually have.

“Of course, they’re excited about a brand new store, 30% off. How is somebody from the Lower East Side going to take an hour train ride to buy a bag of groceries?” said Mark Jaffe, from the Greater New York Chamber of Commerce.

Marte said the group plans to continue fighting the proposal in court.

“We don’t have too much room to fight the government more than a lawsuit, and we’re going to fight the most that we can,” he said.

City Hall did not immediately respond to a request for comment. The Mamdani administration has stated that the plan is legal and said the goal is to address the city’s affordability crisis, not to eliminate neighborhood businesses.

The first city owned grocery store is expected to open by the end of 2027.