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Why City-Run Grocery Stores Are a Bad Idea // Mayoral candidate Zohran Mamdani’s public supermarket proposal would run into the same problems as New York’s failed experiment in public housing.

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  • Andrew Cuomo emerges as front-runner for NYC mayor amid Eric Adams' struggles, with polls highlighting his moderate stance compared to left-leaning Democratic rivals like Zohran Mamdani.
  • Zohran Mamdani, a Democratic Socialist candidate, proposes radical policies: $30 minimum wage, municipal grocery stores, free childcare, rent freezes, and arresting Israel’s Prime Minister.
  • Mamdani’s plan for city-owned grocery stores mirrors Chicago’s stalled initiative, criticized for ignoring low profit margins and logistical challenges in competitive markets like NYC.
  • Critics argue Mamdani’s ideas, such as abolishing rent/property taxes for city stores, misunderstand real estate economics and public sector inefficiencies, akin to failed public housing models.
  • The article compares Mamdani’s policies to a Kansas government-run grocery co-op, highlighting reliance on subsidies and donations, framing socialist promises as unsustainable fiscal burdens.

With New York mayor Eric Adams’s situation becoming more untenable by the day, polls suggest that former governor Andrew Cuomo would be the front-runner to win the mayoral race later this year. Cuomo has more than just name recognition going for him; he is comparatively moderate compared with the rest of the Democratic field, which is running well to the left of the electorate. 

Consider, for example, state assemblyman and mayoral candidate Zohran Mamdani, who is pushing some radical proposals to “make it easier to raise a family” in New York City. A member of the Democratic Socialists of America, which has endorsed him, Mamdani promises to freeze rents, abolish bus fare, and arrest Israel’s Prime Minister Benjamin Netanyahu for delivery to the International Criminal Court. He plans to raise the minimum wage to $30 per hour. He also wants to make childcare free, while giving childcare workers the same salary—and, presumably, pension and lifetime free health-care benefits—as public school teachers. He favors a host of other policies that have long been priorities of the Left, such as limiting NYPD interactions with the public and tasking more social workers to respond to “emotionally distressed” persons experiencing meltdowns in public.

One of his more curious proposals, about which he is buoyant, is to open city-owned and city-managed grocery stores. His campaign literature explains that these municipal stores will be “focused on keeping prices low, not making a profit. Without having to pay rent or property taxes, they will reduce overhead and pass on savings to shoppers. They will buy and sell at wholesale prices, centralize warehousing and distribution, and partner with local neighborhoods on products and sourcing.”

In a recent interview, Mamdani said that he wants to establish “a pilot program of one store in each borough that builds on the feasibility study that was done in Chicago.” Indeed, in 2023, Chicago mayor Brandon Johnson did propose opening such grocery stores, in response to the closing of many supermarkets in poor areas of the city, and he did commission a feasibility study to examine the question. That study has not been made public, however, and Mayor Johnson has backed off his plan, even though the state of Illinois established a “Grocery Initiative” to provide municipalities with up to $2.4 million to open grocery stores. Chicago has not applied for any of this money.

Johnson’s feasibility study probably told him what local grocery store owners in New York could tell Mamdani. The grocery business is notoriously low-margin and fiercely competitive, even in supposed “food deserts,” where full-service grocers still compete with bodegas, delis, and dollar stores. Mamdani’s quaint suggestion that the lack of a profit motive will make it easier to run a successful business sounds a lot like what public housing enthusiasts said about New York’s experiment with being a landlord a century ago. The founders of NYCHA believed that, by plowing the profit margin into maintenance, public housing would sustain itself as livable and affordable for generations. That hasn’t worked out. Running a business strictly for public benefit requires extensive subsidies and ensures that the product—when targeted to the very poor—will be barebones at best.

Moreover, Mamdani’s confidence that the city will not have to waste money on renting store and warehouse space betrays his lack of understanding of local real estate. New York City currently leases tens of millions of square feet of space from the private market and has to pay competitive rents to do so. His desire to “centralize warehousing and distribution” sounds good, but every grocery chain already does this, and in any case doing so would contradict his desire to source products from “local neighborhoods.”

Mamdani notes that his plan “builds on the successes we’ve seen actually in Republican states,” referring to an effort in Kansas to save rural grocery stores by having the local government buy them. The Erie Market in tiny, remote Erie, Kansas is the most cited example of this experiment. The store loses tens of thousands of dollars annually, requires volunteers to stock the shelves, and relies on donations of produce from local businesses. It is more like a rural co-op or food pantry than a real grocery store.

Hearing a leftist promise cheap food, free transit fares, high wages, and low rents is no surprise. But when you get past what George Orwell called socialism’s “stodgy bait,” you find the same old hook—other people’s money—biting through your lip.

Photo by Spencer Platt/Getty Images

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bogorad
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Zohran Mamdani, a Democratic Socialist candidate, proposes radical policies: $30 minimum wage, municipal grocery stores, free childcare, rent freezes, and arresting Israel’s Prime Minister.
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