23-07-2025
The Pesky Details Intruding on Mamdani's Grocery Plan
Zohran Mamdani, New York City's fresh Democratic nominee for mayor, devotes 126 words and a 43-second TikTok on his website to a signature proposal: 'city-owned grocery stores.' This brevity might imply that function will follow form, that the idea is so self-evidently sensible that little needs to be said about it.
What this self-assurance shows, though, is that Mr. Mamdani knows nothing about the grocery business, raising broader questions about the practicality of an assertive socialist agenda like his.
He claims that 'a network of city-owned grocery stores' would offer cheaper food and dry goods because it would avoid paying rent or property taxes, 'buy and sell at wholesale prices' and 'centralize warehousing and distribution.' These assertions collapse upon the slightest scrutiny.
New York City's government does not have a secret stash of large, empty, retail-ready ground-floor spaces conveniently located along major pedestrian and transit corridors. Indeed, the city regularly rents real estate, including retail-style space, from private owners.
As for city-owned grocery stores' ability to 'buy and sell at wholesale prices' and 'centralize warehouse and distribution,' the supermarket industry is an intensely intricate business.
'Product doesn't magically appear on store shelves,' says Ron Margulis, who long covered the industry as a journalist and who hails from a family of supermarket operators. 'There is a science that's applied to making sure the product sent to the shelf is actually going to be purchased, and that science costs money.'
The price a store or chain pays depends on a number of factors, from size and efficiency — volume discounts — to location to an understanding of the complex supply chain.
Whether Mr. Mamdani will have one supermarket in each of the five boroughs, as he originally proposed, or more, as implied by the imprecise term 'network,' the city probably will not be able to get wholesale prices as low as far larger and more efficient supermarket chains.
Moreover, some major New York supermarket operators cooperatively own grocery distributors that buy products from manufacturers and share income with the members. They would not allow a nonprofit public entity to join these networks. As for the city creating its own centralized distribution and bulk purchaser, John Catsimatidis, the Republican billionaire who owns the Gristedes and D'Agostino's chains, says such an investment would make sense only if the city operated at least 100 stores.
Other pesky details intrude on Mr. Mamdani's plan. Wholesalers offer stores lower prices if they participate in promotions, with in-store coupons and prominent placement. To take advantage of such offers, the city would have to be a marketer of branded products — often, less healthy, higher-margin products.
The reward for successfully navigating the science of stocking shelves is an average 2 percent profit for grocery retailers, Mr. Margulis notes. Mr. Mamdani has made no compelling case that the city could engage in such superior negotiation and cost-cutting techniques to overcome this margin and provide less expensive products. This prospect is especially uncertain because the city-owned stores would probably face higher labor costs, including government-scale pension and health benefits.
Once Mr. Mamdani has addressed these issues, he and his top staff members would have to confront another question: What products to sell in the stores? His idea of partnering with 'local neighborhoods on products and sourcing' may sound straightforward. But are community board members going to argue over whether to stock Pringles or Lay's potato chips? Should a city-owned store even sell sugary soda? Should vegetarians who are morally opposed to killing animals be forced to subsidize other New Yorkers' steak purchases? And while it would be virtuous for the city to focus on selling fresh produce, retailers need to stock high-margin snacks and processed foods to subsidize fresh produce, meat and fish, which carry lower profit margins.
And if city stores would be selling fresh produce for no profit, they would be competing with 1,000 low-priced street vendors, many of them immigrants, who operate carts under a program the Bloomberg administration began.
In his TikTok, Mr. Mamdani pledges to work with 'nearby farms.' But as the city's green markets demonstrate, high-quality food from regional sources is expensive, even absent profits for a third-party retailer.
Mr. Mamdani is a clever self-marketer and has never come off as a scold. He could be telling New Yorkers: Let's save money by forgoing all the brand name products, like Baleine sea salt from France and Snyder's pretzel sticks, both in the background of his TikTok video. Or he could make videos on cooking whole chickens to save money and eat healthfully.
But he wants to give New Yorkers capitalist consumer-brand choice at socialist prices. Mr. Mamdani's brand of socialism is not collective, cooperative sacrifice but individualist, no-cost, no-tradeoff socialism.
Even before recent high inflation, New York City grocery stores were expensive. Wages in the city are higher, and logistics are more difficult and expensive. Even electricity is pricier. But Mr. Mamdani offers no solutions for those issues.
Government can appear to solve any problem temporarily by throwing money at it. So it's conceivable that Mr. Mamdani will succeed in opening a few pilot supermarkets but probably only with large government subsidies.
The larger risk for New York City, though, is that this glib superficiality would infect other aspects of urban governance with a socialist flair. We can have free buses without reducing bus frequency when revenue falls. We can replace some policing with a civilian department of community safety, with no risk to public safety. We can raise taxes on the rich, with no risk that higher taxes would accelerate the relative migration of wealth and population to other states that took place in recent years.
'The job of city government isn't to tinker around the edges,' Mr. Mamdani says in his grocery TikTok.
But before casually proposing to disrupt a complex system, it's a good idea to know how that thing works.
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