Zohran Mamdani just announced NYC’s 1st city-owned grocery store. Could the idea help reverse rising food prices across the U.S.?

New York City Mayor Zohran Mamdani announced this week that the Big Apple’s first city-owned grocery store will open in the South Bronx next year. The main promise of the dark horse 2025 campaign — and touts the project, which aims to establish a nonprofit public supermarket in every county by the end of his first term, as “physical evidence of our belief that government can be a force for good.”

“We will use the power of government to lower prices and make it easier for New Yorkers to put food on the table,” Mamdani, a 34-year-old Democrat and democratic socialist, said Monday. he said. “When the government understands that its purpose is to serve the working people it leaves behind, time and time again, it can make a difference in the most pressing challenges our city faces today.”

At a time when food prices are rising, should other governments in the United States consider following Mamdani’s lead? Or are publicly owned grocery stores incompatible with American capitalism?

Sticker shock at the supermarket is nothing new; This was one of the biggest problems of voters during the 2024 presidential campaign and the epidemic period before it. But recent increases in energy costs, largely tied to the Iran war and President Trump’s tariffs, have been particularly pronounced.

State data announced last week It showed that U.S. grocery prices rose faster in April than in any month in almost four years. Today, seafood is 6.2% more expensive than a year ago. Fresh vegetables are 11.5% more expensive. Beef costs 14.8% more. Coffee is 18.5% more expensive. Tomatoes are 39% more expensive. And these increases are on top of pandemic-era inflation, which has already increased food prices by nearly 25%.

Here are some pros and cons on how Mamdani’s city-owned grocery stores would work and whether the idea could be viable outside of New York.

Mamdani’s plan

In theory, the mayor’s plan is pretty simple: Use municipal resources to reduce grocery stores’ overhead and operating costs, then pass those savings on to consumers in the form of lower prices.

What this means in practice is this: at least for now.

A 20,000-square-foot grocery store is planned to open in 2027 PeninsulaA new live-work campus in the Hunts Point neighborhood of the South Bronx, developed in part by the city’s Economic Development Authority and built on the site of a former juvenile detention facility.

A second store will open in 2029 in La Marqueta, a city-owned marketplace under elevated train tracks in Manhattan’s predominantly Latino East Harlem neighborhood.

Locations in three other boroughs (Brooklyn, Queens and Staten Island) are currently under review.

The goal for all five markets is to “prioritize,” according to Mamdani’s office[e] Council-owned sites wherever possible. From where? Thus, his management can reduce a major expense by waiving rent and property taxes.

The city will also pay for the construction and equipment of the stores. To this end, Mamdani has requested so far: $70 million capital dollars — A request that the City Council still must approve. (The East Harlem outpost will cost about $30 million to build and operate, according to the mayor’s office.) Mamdani he said The money needed for public grocery stores could come at least in part from scaling back an existing program that offers tax breaks and special regulatory relief for private supermarkets opened in underserved areas (aka “food deserts”), he said.

Beyond building stores and allowing them to operate rent- and tax-free, the name belongs to the entire city, which becomes a bit misleading. Mamdani management does not plan to operate these new stores. Instead, that business will go to private “third-party grocery operators” who will be selected “through a competitive purchasing process” and then monitored to make sure they keep prices as low as possible.

In the past, Mamdani has likened the idea to a “public option” for grocery stores rather than state-run (or in this case, city-run) supermarkets.

Does this happen anywhere else?

Actually it is. A few scattered rural municipalities have tried opening their own grocery stores to fill the gap after other local options closed. Baldwin, Fla. The town (population: about 1,300) bought the closed market in 2019 and operated it as a public utility for about five years. A similar store owned by the municipality is in St. Petersburg, where 600 people live. It has been developing in St. Paul, Kan., for more than a decade.

Major cities outside New York have also begun exploring the idea.

Chicago Mayor Brandon Johnson, another progressive Democrat, commissioned a 105-page feasibility study that found city-owned grocery stores were “necessary, feasible, and feasible” — but his administration eventually decided to focus instead on city-owned markets with multiple independent suppliers.

in Madison, Wisconsin, construction started in february at a city-supported grocery store located on the first floor of a city-owned mixed-use affordable housing building. It is expected to open by the end of the year.

In Atlanta, Democratic Mayor Andre Dickens partnered with the Savi Provisions chain. The city’s first municipally supported market In September, he contributed $3.5 million of the project’s $5.4 million cost.

And in Washington, D.C., two mayoral candidates, both Democrats, discussed the idea last month.

Will it work?

That’s the question Mamdani’s new “network” of five municipally owned grocery stores is designed to test. This is effectively the largest public grocery pilot program in U.S. history.

The mayor, however, has long insisted that his stores could “buy and sell at wholesale prices”, in part through “centralisation”.[ing] storage and distribution.” His opinion is that as the city grows and more stores open, the easier this process will become.

A Yahoo/YouGov poll last year found that 51% of Americans approved of creating “a network of government-owned grocery stores focused on keeping prices low rather than making profits” (a +20-point margin) and 31% disapproved.

But critics have their doubts.

The loudest objections come from conservatives and Republicans who tend to dismiss the concept of a city-owned grocery store as “TOTALLY CORRUPTED MARXIST” while evoking bleak images of Soviet-era bread lines. “The scariest words in the English language are, ‘I am Zohran Mamdani and I am here to run your grocery store,’” said GOP Rep. Young Kim of California. he wrote on social media on Tuesday.

Some economists and small business owners also spoke out against Mamdani’s plan; This plan also requires private contractors to actually operate the stores. They are arguing city-owned grocery stores could undermine mom-and-pop businesses and force many to close. They also claim that the approach is economically inefficient. It is said that profit margins in the grocery business are already very low (only 1 percent to 3 percent) and the whole system depends on balance. complex infrastructure cooperative distributors, volume discounts, and branded promotions can be difficult to replicate in a public, non-profit network.

For now, Mamdani’s answer is mainly that municipal markets are worth a try.

“That’s not the only thing the government can help with,” the mayor said Monday. “The government needs to help. And our government will help.”