A Trader Joe\u2019s can come cheap \u2014 but not a Trader Zo\u2019s.<\/p>\n
Mayor Zohran Mamdani\u2019s $30 million city\u2011owned East Harlem grocery store is going to cost taxpayers roughly four times what rival markets spend on construction, industry sources told The Post \u2014 and will likely run at a loss in perpetuity.<\/p>\n
At $30 million, Mamdani\u2019s 9,000-square-foot East Harlem grocery store would cost<\/a> more than $3,000 per square foot to construct.<\/p>\n The market in East Harlem would rise at a vacant lot at the Park Avenue site under elevated train tracks of the city-owned La Marqueta. James Keivom for NY Post<\/p>\n La Marqueta has long been a hub home to small businesses. James Keivom for NY Post<\/p>\n Mayor Mamdani held a news conference on Tuesday to discuss city-owned grocery stores. James Keivom for NY Post<\/p>\n But when it comes to building a new Whole Foods or a Trader Joe\u2019s from the ground up, the costs are much lower, according to a real estate broker who works with prominent grocery chains. Those costs would run at about $800 per square foot, or $7.2 million, for a 9,000-square-foot location.<\/p>\n Under normal circumstances, according to a grocery store consultant with knowledge of New York development, \u201cno supermarket operator would pay that number.\u201d <\/p>\n \u201cOver $3,000 psf?\u201d the broker emailed. \u201cSomeone is making extra vacation money!\u201d<\/p>\n What\u2019s more, the market would have to bring in a whopping $137,000 in daily sales (equivalent to $50 million a year) \u2014 which would convert to a roughly $13,000 daily profit \u2014 to recoup the $30 million outlay in six years. <\/p>\n That\u2019s an astonishing annual sum, especially because the top five city supermarkets \u2014 often with larger footprints \u2014 roughly earned between $16 million to $27 million in annual sales in 2025, according to Food Trade News. <\/p>\n The ranking of the top 20 city markets overall for annual sales included familiar names. Key Food notched about $11 million per store, Krasdale scored about $9.4 million per location, ASG Stores \u2014 with brands like Associated \u2014 also did about $11 million per store. Fine Fare brought in $6.5 million per locale, and Food Bazaar averaged about $20 million per store.<\/p>\n City supermarket titan John Catsimatidis said, \u201cI could probably open up 10 stores with $70 million.\u201d Luiz C. Ribeiro for NY Post<\/p>\n Catsimatidis owns Gristedes, and wants to \u201cadvise\u201d Mamdani on the project. G.N. MILLER\/NY POST<\/p>\n Mamdani said Sunday that the $30 million outlay for his East Harlem grocery store is just part of a $70 million initiative for five city-owned grocery stores \u2014 one in each borough. But supermarket magnate John Catsimatidis bit back, saying, \u201cI could probably open up 10 stores with $70 million.\u201d<\/p>\n Catsimatidis, owner of Gristedes Supermarkets, declined to say anything more because he wants to \u201cadvise\u201d Mamdani on the project, which requires City Council approval. The mayor\u2019s office didn\u2019t respond to a request for more information on what the $30 million figure includes.<\/p>\n The taxpayer-funded stores, offering discounts on basic groceries<\/a>, are all slated to open during Mamdani\u2019s first term \u2014 and were a central plank of his campaign<\/a> last fall to cut grocery prices for low-income residents.<\/p>\n The new Mamdani market in East Harlem would rise at a vacant lot at the Park Avenue site under elevated train tracks of the city-owned La Marqueta \u2014 home to more than 20 small businesses.<\/p>\n One commercial real estate consultant who spoke to The Post was critical of the small footprint of the store to serve an entire community, especially in a large neighborhood. He said Big Apple supermarkets average 25,000 square feet \u2014 though many markets have embraced the smaller format as of late. <\/p>\n Whole Foods, when accounting for its new small-format locations, run from 7,000 to 14,000 square feet, though the Bowery location spans a mighty 71,000 square feet. Trader Joe\u2019s tend to occupy 10,000 to 15,000 square feet, while Key Foods tend to be from 15,000 to 17,000 square feet.<\/p>\n \u201cThe East Harlem store would, at best, generate annual sales of $8 million \u2014 roughly $150,000 per week \u2014 initially,\u201d the consultant said. \u201cTo repay $30 million, we should be looking at cash flow, not sales. Sales are not profits.\u201d<\/p>\n Whole Foods Market has locations, large and small-format, throughout the city \u2014 and sizes run upwards of 7,000 square feet. Christopher Sadowski<\/p>\n Similarly, Trader Joe\u2019s tend to occupy 10,000 to 15,000 square feet. Helayne Seidman<\/p>\n Because grocery retailing is a slim-margin business in the best of times \u2014 12% gross margin \u2014 the municipal market will likely always lose money, said a partner in a brokerage firm that has closed dozens of deals with grocery stores.<\/p>\n \u201cIt seems like profits are not [the mayor\u2019s] primary objective,\u201d he said. <\/p>\n The store will likely lose at least $300,000 a year, possibly in perpetuity, despite the store being rent-free, according to the consultant, a cost that will have to be borne by the taxpayer. <\/p>\n The La Marqueta store wouldn\u2019t open until 2029, with other municipal grocery store sites selected and opened sooner, officials said.<\/p>\n It wasn\u2019t immediately clear why it would require so many years for the store to open. Typically, upon taking possession of a space, it would take six to 12 months to construct a grocery store, the firm partner said.<\/p>\n