\u201cThere is almost no modern example of a municipal government entering the retail consumer-goods market, using its own properties to eliminate occupancy costs, immunizing the enterprise from taxes, and then undercutting nearby private businesses through a permanent discount pegged to their competitors\u2019 prices,\u201d the grocers wrote in the antitrust complaint, filed Wednesday in U.S. District Court for the Southern District of New York.<\/p>\n
The grocers are seeking a permanent injunction under Section 16 of the Clayton Act, stopping the city from implementing the NYC Groceries program, insofar as it employs a discount on Core Basket goods through free rent, property-tax exemption, or \u201cAffordability Payments\u201d drawn from the city\u2019s tax base paid to retailers to cover the losses sustained meeting the 30% discount target.<\/p>\n
\u201cWhen government acts as a commercial participant in the retail grocery market with structural advantages unavailable to private firms\u2014free rent, no property taxes, public capital, and Affordability Payments\u2014the Sherman Act applies,\u201d the grocers wrote in the complaint.<\/p>\n
A mayor\u2019s office spokesperson said Wednesday the administration remains\u00a0confident \u201cin both the legality and the necessity\u201d of the NYC Groceries program.<\/p>\n
\u201cBy the end of the mayor\u2019s first term, every borough will have a high-quality, affordable grocery store that New Yorkers can count on,\u201d a City Hall representative said. \u201cAt a time when too many New Yorkers are struggling to afford the food their families need, we have a responsibility to use every tool available to make groceries more affordable and accessible.\u201d<\/p>\n
Mamdani announced in July the \u201cCore Basket\u201d set of kitchen staples covered by a mandated 30% discount would include all fresh produce, meat, and seafood, in addition to 20 other essential items like cheese,\u00a0milk\u00a0and bread.<\/p>\n
\u201cHere\u2019s\u00a0how it will work. Once a month, our five city-run grocery stores will set prices for this core set of goods at 30%\u00a0below typical retail prices\u00a0\u2014\u00a0no exceptions, no gimmicks. The savings will last for the entire month,\u201d he said. \u201cThat means no weekly fluctuations nor sticker shock at the checkout line;\u00a0not for our seniors living on fixed incomes\u00a0nor for the parents who rely on a regular supply of apple slices to keep toddler tantrums at bay.\u201d<\/p>\n
Mamdani said New York families would save an estimated $90 on grocery bills each month, totaling over $1,000 annually.<\/p>\n
City-owned grocery stores were one of the key promises Mamdani, a self-described democratic socialist, centered his historic 2025 mayoral campaign<\/a> on.<\/p>\n The city has committed $70 million in municipal capital funding for construction and fit-out of the five stores.<\/p>\n Locations for the first two stores have been selected for East Harlem and Hunts Point in the Bronx. The Bronx store, a redevelopment project at the site of the former Spofford Juvenile Detention Facility, is targeted to open first sometime next year, with a goal of no later than the end of 2027.<\/p>\n The National Supermarket Association\u2019s lawsuit is the second complaint filed against the city over the municipal grocery store initiative. Last month, the Multicultural Business Coalition, a group representing the owners of smaller grocery stores and bodega corner stores, brought a class action<\/a> in Manhattan Supreme Court similarly challenging the plan for its potential negative impact on competitors.<\/p>\n