New York Appropriated $70 Million for City-Owned Grocery Stores. It Still Hasn’t Said What the Discounts Cost.
On July 27, Mayor Zohran Mamdani (D-NYC) announced that New York’s five planned municipal grocery stores will sell a core basket — all fresh produce, all meat and seafood, and roughly twenty categories of staples — at 30% below prevailing market price, with the price fixed for a full calendar month and no income test.
The capital money is real and already appropriated. The stores are not. No site has opened, no operator has been chosen, and the first store is not scheduled until the end of 2027.
And the number that actually determines whether this works — the recurring operating subsidy that pays for the discount — has not been published.
- $70M in capital funding appropriated in the adopted FY2027 budget for five stores, one per borough — NYC Council / NYCEDC
- 2.1% net profit margin across US food retail in 2025 — the industry's own figure, and the reason a 30% discount cannot come out of operations — FMI, Food Retailing Industry Speaks 2026
- $0 publicly disclosed operating subsidy — the money that would actually fund the discount — City has not released a figure
The program is called N.Y.C. Groceries and it runs through the city’s Economic Development Corporation. Five stores, one per borough, built on city-owned or city-leased space. The city pays for construction. The operators pay no rent and no property taxes. A private operator — or as many as five — will handle staffing, merchandising, procurement and supply chain, selected through a request for proposals issued July 27 and due to be decided by spring 2027.
The adopted FY2027 budget, agreed with Council Speaker Julie Menin (D) on June 30, carries $70,000,000 in capital for the five stores — up from the roughly $60,000,000 Mamdani estimated during the campaign. The first identified site, at La Marqueta in East Harlem, is budgeted at $30,000,000 for 9,000 square feet. The first store scheduled to open is in Hunts Point, in the Bronx, at the end of 2027. Three boroughs have no site at all yet.
City officials have also confirmed what the stores will not have: no butchers, no hot food, no beer, no cigarettes. Mamdani has used that list as his argument for why bodegas will survive alongside them.
Mamdani officials admit city-owned grocery stores will lack key components like butchers, hot food - as criticts rail plan is 'destined for failure'
Grocery retail is one of the thinnest-margin businesses in the American economy. The industry’s own trade association, FMI, put the net profit margin at 2.1% in 2025 and 1.7% the year before, and reported that roughly 11% of food retailers posted outright operating losses. Kroger, the largest pure-play grocer in the country, booked $1,000,000,000 in reported net earnings on $147,600,000,000 in sales last year — a margin of about two-thirds of one percent.
That is the arithmetic problem. A store selling a large share of its inventory at 30% below market cannot fund that gap out of operations, because the operations do not generate anything close to it. Waiving rent and property taxes helps, but it does not bridge a thirty-point discount. The difference has to come from a recurring city subsidy.
The city has not said how large that subsidy is. It has not published a per-store figure, an annual figure, or a projected cost per shopper. Fox News Digital asked and did not get an answer. That silence is the actual story here — not the capital, which at $70,000,000 is a rounding error against a $125,800,000,000 budget, but the open-ended annual commitment attached to a city facing a multibillion-dollar gap between this year and next.
“The 30% savings that Mamdani announced on his government-owned stores are an illusion. Taxpayers will foot the bill for millions of dollars in subsidies, and they will operate on government-owned land with rents waived. New Yorkers will still be paying the full price, just indirectly.”
Adam Lehodey · policy analyst, Manhattan Institute · to Fox News Digital
The Fox News opinion column that put this back in the news — by Heritage Foundation economists Peter St. Onge and E.J. Antoni — makes a claim worth correcting, because the correction cuts against the column and the underlying facts still cut against the plan.
The column says Chicago “blew $26 million running seven stores into the ground.” Every one of those seven was a Save A Lot location owned and operated by Yellow Banana LLC, a private company. None was a city-owned grocery store. Six of them fell under a redevelopment agreement with the city whose headline value was $26,000,000, of which roughly $13,500,000 in taxpayer money was actually disbursed; the seventh, in Englewood, operated under a separate agreement with a different landlord. All seven closed on July 25, 2026.
Chicago’s actual city-owned grocery proposal was a separate effort under Mayor Brandon Johnson (D). His administration commissioned a feasibility study in 2024 that concluded a municipal grocery store was “necessary, feasible and implementable” and could even turn a profit.
In February 2025 he shelved it anyway and pivoted to a public-market concept instead. A Democratic mayor’s own consultants told him it would work, and he still walked away. That is a more damaging data point than the one the column used — and it is accurate.
The closest structural analogue to what New York is building is Kansas City’s. The city bought the Linwood Shopping Center in 2016; a private operator ran the KC Sun Fresh store inside it from 2018 until the nonprofit Community Builders of Kansas City took ownership at the end of 2021 and took over day-to-day operations in February 2022. It closed on August 12, 2025 after roughly $18,000,000 in taxpayer investment across a decade, with weekly customer counts down from 14,000 to about 2,000. The operator and the city are now in litigation.
“You don't go from having 14,000 customers when we acquired the store, down to now about 2,000, because of management.”
Emmet Pierson Jr. · CEO, Community Builders of Kansas City · KCUR, August 12, 2025
The small-town experiments went the same way. Baldwin, Florida ran its own town-owned market from 2019 and closed it in March 2024. Erie, Kansas voted in 2020 to buy its only grocery and took ownership in early 2021, lost $132,000 in 2022 with a single profitable month all year, and eventually leased the store out rather than keep running it. Both towns hit the same wall: not ideology, but customer base.
There is one municipal-backed store currently open and running — Atlanta’s Azalea Fresh Market, built with Invest Atlanta funding and operated under sublease, which opened in September 2025 under Mayor Andre Dickens (D). It is eleven months old. Anyone calling it a success or a failure is guessing. The honest summary is that no American city has ever run a five-store urban municipal grocery network, and the precedent record neither proves nor refutes that it can be done.
The need is documented, not invented. The Mayor’s Office of Food Policy counts 1.2 million food-insecure New Yorkers, 14.6% of the city. Separately, state health data put Bronx food insecurity near 20% of residents, and Feeding America’s county estimates put roughly a third of Bronx children in food-insecure households. Bedford-Stuyvesant has 57 bodegas for every supermarket, and bodegas stock less fresh food than supermarkets do.
New York has also already tried the market-incentive version, twice. FRESH, launched in 2009, offered zoning bonuses and tax abatements and has 30 open stores to show for it — concentrated, the Comptroller found in 2024, in Harlem and Bed-Stuy. Green Carts, launched in 2008, aimed at 1,000 produce-vending permits; a Columbia University study counted 166 carts actually operating in its 2013 peak season, and the city has not published a comparable count since. Eighteen years of subsidizing private grocers produced partial results, which is the strongest argument Mamdani has: this is a change of method, not a first attempt.
Zohran Mamdani, a 100% Communist Lunatic, has just won the Dem Primary, and is on his way to becoming Mayor. We've had Radical Lefties before, but this is getting a little ridiculous.
Posted after the 2025 Democratic primary — about Mamdani generally, not the grocery program
The sharpest objections are not coming from Republicans. Governor Kathy Hochul (D-NY) rejected the plan flatly — “I favor free enterprise” — and former Mayor Eric Adams (D) said it would “devastate the local bodegas and local stores and the local supermarkets where they employ people.” Adam Friedman, who sits on NYCEDC’s own board, has questioned the competition analysis.
At our five-borough municipal grocery stores, New Yorkers will get a 30% discount on eggs, milk, chicken, fresh produce and other everyday essentials. In the wealthiest city in the richest country in the world, no one should have to wonder how they'll afford the food they need to feed themselves or their families.
And the strongest critique is not the one the column made. It is targeting. The flagship East Harlem site sits within a 35-minute walk of roughly 45 existing food retailers. Five stores set against 13,000 bodegas is too small to move prices for 8.3 million people and too small to destroy the corner-store economy — which means the case for it rests almost entirely on a subsidy figure the city has declined to publish.
Critics of Zohran Mamdani's publicly subsidized grocery store program have lost the plot on what should be the whole point of food policy: to make good food affordable to all.
New York has appropriated $70 million to build five grocery stores and promised shoppers 30% off in an industry that earns two cents on the dollar. The capital is public. The buildings are planned. The operator is unchosen, the shelves are empty, and the first store is more than a year away. The one number that decides whether this is a program or a permanent bill — what the discount costs every year — is the number the city has not released.
