NYC Mayor's Plan for City-Run Grocery Stores Draws Fire from Industry Leaders

Affordable Food Initiative Faces Criticism Over Potential Harm to Local Bodegas and Supermarkets

New York City Mayor Zohran Mamdani is moving forward with an ambitious plan to open five government-operated grocery stores across the city's five boroughs, but the initiative is already drawing sharp criticism from one of the city's largest supermarket operators, who argues the stores will devastate existing small businesses rather than feed the hungry.

The $70 million proposal, announced in July, calls for the first store to open in Hunts Point in the Bronx by late 2027, with the remaining four locations spread across Manhattan, Brooklyn, Queens, and Staten Island. The mayor has set a goal of having all five stores operational before his term concludes in 2030.

The city-run shops would offer a 30 percent discount on a selection of everyday groceries, including meat, seafood, and fresh produce—part of Mamdani's effort to address the affordability crisis gripping the city.

"Every week, New Yorkers walk into a grocery store hoping the prices haven't gone up again," Mamdani said. "A trip to the grocery store shouldn't spell dread for New Yorkers."

The administration is currently accepting applications from private companies to manage the day-to-day operations of the stores and has committed to covering property taxes and rental costs at each location.

John Catsimatidis, CEO of the Gristedes grocery chain, which operates supermarkets throughout the city, said the plan ignores economic reality. He argues that exempting the city-run stores from real estate taxes and rent while requiring nearby competitors to pay both creates an unlevel playing field that could force local businesses to close.

"If I don't pay any rent or real estate taxes, I can bring down the cost of a product 20 percent across the board," Catsimatidis said. "The fact is the people [Mamdani is] going to hurt are the current bodegas or the current supermarkets in those neighborhoods."

Catsimatidis pointed to the existing challenges facing grocery retailers, noting that the average supermarket operates on profit margins of just 1 to 3 percent. He said local business owners are already struggling with rising costs across multiple fronts, including a congestion pricing program that took effect in January 2025, which imposes fees on vehicles traveling south of 61st Street in Manhattan.

The toll has made deliveries more expensive, Catsimatidis explained, noting that many of his suppliers operate from locations in New Jersey and Long Island. "If I want stuff delivered to us from vendors in New Jersey—and all these companies are in New Jersey, Nassau, Suffolk County, Brooklyn, Queens, or the Bronx—and I say to them, 'I want you to deliver to New York City,' they're going to charge me 10 percent more, or 15 percent more," he said.

The congestion pricing burden compounds other pressures, Catsimatidis said, including competition from online retailers and the rising cost of electricity. "If you go up and down the streets in New York City, half the stores are empty—which is horrible," he said.

He offered an alternative approach: rather than opening city-run stores, provide tax credits to existing businesses that lower prices, allowing the benefit to reach residents across all five boroughs without putting independent operators out of business.

While Catsimatidis acknowledged the stores are being placed in neighborhoods that would serve lower-income residents, he framed the broader debate in ideological terms. "You're competing against your own citizens, and that's only done in socialist countries," he said. "Look at socialist countries—nobody's breaking down the walls to get in, but they're all breaking down the walls to get into the United States of America."

Nevin Cohen, director of the CUNY Urban Food Policy Institute, emphasized that the initiative responds to a genuine and urgent need. According to federal data, 1.4 million New Yorkers experience food insecurity, meaning they cannot consistently afford enough food for themselves and their families. Roughly 20 percent of the city's population relies on SNAP benefits to purchase groceries.

"The problem is that many people can't afford food for their families," Cohen said.

Cohen noted that the city already operates a program called FRESH, which uses tax incentives and zoning accommodations to encourage supermarkets to open or expand in underserved neighborhoods. He did not directly comment on Mamdani's specific proposal.

The mayor's office did not respond to requests for comment on Catsimatidis's criticisms.

The debate comes as New York continues to grapple with high grocery prices and a fragmented retail landscape, with many neighborhoods—particularly in the outer boroughs—still considered underserved by affordable food options. Whether Mamdani's city-run model can deliver on its promises without damaging the existing businesses that already serve those communities remains to be seen.