City-owned grocery stores were one of the proposals on the affordability platform that helped Democratic Socialist Zohran Mamdani win New York City’s recent mayoral election.
Prices at the stores would be lower, the thinking goes, because they’d operate in city-owned spaces, so they wouldn’t have to pay rent or property taxes. Other cities have tried using public funds to open grocery stores, to mixed results.
If you take rent, property taxes, and the need to earn profits out of the equation, Nevin Cohen of the CUNY Urban Food Policy Institute said that supermarkets can cut costs for consumers.
“Some estimates are that a public supermarket could shave 5% to 10% off the retail price,” he said.
Cohen noted that the commissaries the Department of Defense runs operate along similar lines and offer groceries for 15% to 25% less than commercial supermarkets.
But there could be a long-term cost to the city, argued Stephen Zagor at Columbia Business School: “A government-owned supermarket is a mission-driven business. At best, maybe they’ll break even, but it’s probably not likely. So there would be an ongoing subsidy — just like that mail system is subsidized, just like Amtrak is subsidized.”
The idea has a mixed record. A city-backed grocery store in Kansas City, Missouri, closed its doors earlier this year after almost 10 years of municipal investment. Customer traffic at the store had reportedly collapsed due to crime in the neighborhood.
But in southwest Baltimore, a publicly-supported store has been open for about a year. City Council Member Phylicia Porter said the city and state offered more than $1.5 million in incentives.
“We wanted to make sure that not only that they had that incentive, but that they had a streamlined approach to permitting any type of city process needed,” she said.
The result has impressed Bif Browning, a neighbor and a community consultant to the store.
“I would not have imagined it until I saw it, how much prices can come down when you’re able not only to have a volume buy, but to have a system that allows you, at the beginning of the year, to say, ‘We forecast we’re going to buy this much for the year, so we can lock in a price,’” he said.
In Atlanta, the economic development authority offered $6 million in grants and loans to attract a grocery store downtown.
The public-private partnership opened about two months ago, according to the authority’s Eloisa Kelementitch, and has been bringing in higher-than-expected sales — especially for fresh produce. The strategy has been to work with the local Independent Grocers Alliance.
“So it was this third party that would help to serve as the translator between government and our requirements of what we want to see and then what the grocer could actually deliver,” she said.
The partners are hoping to open another grocery store using a similar model next year, Klementich added.
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