The Mayor Who Loves Bodegas Is Building Taxpayer-Funded Competitors
Zohran Mamdani's administration has not studied how New York City's government-backed grocery stores will affect nearby mom-and-pop outlets, which operate on thin profit margins.
Throughout his nascent tenure, New York City Mayor Zohran Mamdani has positioned himself as a champion of Big Apple small businesses. Just two weeks onto the job, he declared: "You cannot tell the story of New York without our small businesses." He went on to decry costly city regulations that have "long made it too hard for these same businesses to open their doors."
Perhaps on account of his love for food, Mamdani has shown particular adoration for NYC's network of independently owned bodegas: "I can't imagine New York City without bodegas. They represent our hustle and entrepreneurial spirit." But so far, the mayor's self-proclaimed concern for the little guy has proven more rhetoric than reality—especially in the realm of groceries.
Mamdani's primary initiative in the grocery space, of course, has been to push his $70 million plan to build a city-owned grocery store in each of Gotham's five boroughs. But during a New York City Council hearing last week, the mayor's budget chief disclosed that the administration has failed to conduct a small-business impact study on how these government-backed stores would affect nearby mom-and-pop outlets, which operate on thin profit margins.
The lack of concern does not come as a surprise to those who are familiar with how this story has played out. Despite the Mamdani administration's claim that it would target so-called "food deserts" when it came to placing the government-owned stores, the sites selected so far are scarcely bereft of food.
There are already several bodegas and small grocers within blocks of the planned East Harlem site for one of the government-backed stores. A Fox News digital analysis found roughly 45 grocery stores within a 35-minute walk of the proposed location. Out of the 500 largest cities in the U.S., a recent study ranked New York as the third-best city for grocery access, outperforming San Francisco, Los Angeles, Philadelphia, Chicago, and Washington, D.C., among many others.
This matters. Mamdani's stores will be operating at a distinct advantage compared to private grocers: They will not have to pay rent or property taxes. Annual rental prices for storefronts in East Harlem average from $120 to $225 per square foot for high-traffic corridors and $65 to $120 per square foot for secondary retail. For the former, a 1,000-square foot retail space would cost between $10,000 and $18,750 to rent each month; for the latter, it would be between $5,000 and $10,000. (Multiply that by many times, as the city-owned grocery store in East Harlem is slated to be 9,000 square feet.)
The grocery business is also notorious for its tight profit margins—usually hovering around 1-3 percent—further underscoring the potential threat posed by rent-free and tax-free competitors. As a result, local independent grocery stores are pushing the city council to intervene against Mamdani's government outlets.
The president of the National Supermarket Association, which represents 450 independent grocery stores inside the city, called the government-backed stores a "slap in the face." One bodega owner pointed out that the irony of the city "using our tax money to compete with us," since the property taxes that private stores pay will functionally help offset the tax-free existence of the new government-operated competitor stores.
Supporters of the mayor's plan might argue that competition from a mere five stores spread throughout a city as immense as NYC will have little real impact on existing private grocers. But not every lawmaker wants to stop at five stores.
Last week, a new bill was introduced in the New York City Council to make the city-owned stores permanent and to expand the number to five per borough. "Let's make sure it's not something that just our current mayor invests in, but something we can codify into in perpetuity," said Jennifer Gutiérrez (D–Brooklyn), the sponsor of the bill, in an interview with The City Reporter.
While some have questioned whether Mamdani's subsidized stores will actually result in cheaper food prices, it's clear that the mayor himself is unconcerned by that skepticism—and in fact views his stores as a market competitor to be reckoned with. "Now, some will insist that city-owned businesses do not work, the government cannot keep up with corporations," said Mamdani. "My answer to them is simple. I look forward to the competition."
The main competitors, however, will not be massive corporations. They will be the nearby mom-and-pop bodegas the mayor says he loves.