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Economists and business leaders are raising concerns over NYC mayoral candidate Zohran Mamdani’s proposal for city-run grocery stores aimed at cutting food costs.
Ryan Bourne of the Cato Institute criticized the plan as “the height of political hubris,” arguing it ignores the competitive nature of the grocery industry and its tight profit margins.
“You don’t lower grocery bills by having government-run stores,” Bourne told Fox Business. “Government-run entities have no market discipline — no need to earn profits, compete, or serve customers efficiently. That leads to bloated costs, empty shelves, and zero accountability.”
“If we just do the simple math here, there’s no way you can sell these products at lower prices and still make money,” said E.J. Antoni, chief economist at the conservative leaning Heritage Foundation think tank. “The other problem is that if he (Mamdani) is selling things substantially less than the private market, who is going to want to go to the private market? Everyone is going to want to go to these grocery stores.”
Antoni added that the city-run grocery stores have the potential to exacerbate food shortages in New York City. And yet, Mamdani, the surprise winner of the Democratic mayoral primary, has made affordability a central focus of his campaign for New York City.
The 33-year-old claims city-run grocery stores would avoid rent and property taxes, cutting overhead. Additional savings would be realized through wholesale purchasing, local farm partnerships, and centralized supply chains. Mamdani estimates it will cost $60 million to launch one store in each of the city’s five boroughs and plans to fund the project by redirecting a portion of the $140 million in tax breaks currently given to private grocers.
“If the government is going to make it impossible for the private market to compete, then the private market will stop competing,” Antoni warned, citing billionaire grocer John Catsimatidis. “If you make it unprofitable for a grocer to do business in Manhattan, then people like John Catsimatidis are going to pull the plug.”
Catsimatidis, whose Red Apple Group spans food, real estate, energy, and insurance, told Fox Business that retail grocery is the most challenging part of his portfolio.
“If the city of New York is going socialist, I will definitely close, or sell, or move or franchise the Gristedes locations,” he said. He runs over 15 Gristedes and nearly a dozen D’Agostino stores in Manhattan. “It’s going to hurt New York,” he added, warning he may relocate his corporate offices to New Jersey if Mamdani wins in November.
