Zohran Mamdani's Government-Run Grocery Stores Won't Lower Prices
The democratic socialist's proposed "public option" reveals a fundamental misunderstanding of the market.
Andrew Cuomo has conceded defeat to 33-year-old progressive upstart Zohran Mamdani in New York City's Democratic mayoral primary. With registered Democrats making up over two-thirds of the city's electorate, Mamdani is in pole position to be the Big Apple's next mayor, which could spell trouble for New Yorkers struggling with the city's nation-leading cost of living.
The campaign website of Mamdani, who self-identifies as a democratic socialist, says that he is running "to lower the cost of living for working class New Yorkers." In addition to offering free bus fare citywide, Mamdani is proposing to rein in "out of control" prices with "a network of city-owned grocery stores focused on keeping prices low, not making a profit." Mamdani argues that "without having to pay rent or property taxes, they will reduce overhead and pass on savings to shoppers."
If lowering the price of groceries is Mamdani's goal, his "public option" is a poor way to accomplish this feat, especially given the structure of the city's grocery market.
The grocery market, which includes bodegas, grocery stores, supermarkets, and online grocery delivery (like Amazon, Walmart, and ShopRite), is incredibly competitive in New York City, and its market concentration is extremely low. Based on 2016 market share data (the most recent year data are available) from Chain Store Guide, a provider of retail and foodservice intelligence, the New York metropolitan area's grocery market has a Herfindahl-Hirschman Index score, a measure of market competitiveness, of approximately 550 (an index score below 1500 is considered to be competitive).
Despite the competitive market, food prices in New York City (and the rest of the country) have risen. The cost of food at home, a good proxy for the price of groceries, increased by 27.5 percent between FY 2019 and FY 2023 in the New York City Metropolitan Area, according to an April 2025 report from the Office of the New York State Comptroller using Bureau of Labor Statistics data. However, this price increase was not caused by the city's 1,002 grocery stores focused on "making a profit"—grocery store profits range from 1 percent to 2 percent, Adam Lehodey explains for City Journal—but by inflation caused by federal spending and supply chain crunches.
It's also worth noting that the government already plays a role in the food system by providing subsidies for low-income New Yorkers. The Mayor's Office of Food Policy reports that $4.9 billion dollars were spent on the Supplemental Nutrition Assistance Program (SNAP) in FY 2024 alone. New York State received an additional $503.4 million in federal funding for the Special Supplemental Nutritional Program for Women, Infants, and Children (WIC) in FY 2024, which served over 230,000 women, infants, and children in New York City.
Mamdani objects that "private grocery store operators…are not even required to take SNAP/WIC," but 100 percent and 82 percent of sampled grocery stores accepted SNAP and WIC, respectively, according to a 2016 study conducted by the New York City Department of Health and Mental Hygiene. The same study found that 87 percent of bodegas accepted SNAP—93 percent of which offered fresh produce, laying waste to claims of healthy-food deserts.
History shows that government ownership of food production and distribution can produce catastrophic outcomes. Daniel Di Martino, fellow at the Manhattan Institute, tells Reason about his first-hand experience with government-owned grocery stores, while growing up in Venezuela, saying they "were subject to extensive corruption by government officials that awarded contracts to friends, they sold rotten or low quality food, and they served as a way to make voters dependent on the government and force them to vote for the socialist leaders."
Even if you imagine corruption away, the conceit that New York City bureaucrats can run grocery stores at a lower cost than highly capitalized private firms enjoying massive economies of scale, decades of market experience, and complex supply chains is farcical.
