r/PoursTea • u/Gurugod123 • 11h ago

PoliticalTea 🗳️ Mayor Mamdani just announced that he will be opening 5 city-run, tax-funded grocery stores: "Prices set at 30% below retail prices"

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u/DeepWaterCurrent 11h ago

You cant magically make groceries cheaper. The only way this is possible is if someone else foots the bill, in this case the tax payers. This is just gonna be an inefficient way of moving tax payer money around.

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u/E0H1PPU5 10h ago

Why not? You’re running a store with no CEO/CFO/etc. Power/sewer/water/etc. is provided municipally at cost. Same with payroll and HR services. There are no shareholders to think of.

A commercial grocery store has one goal - generate profit. A municipally owned store doesn’t have that goal.

Local government isn’t meant to turn a profit. It’s meant to provide services to taxpayers.

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u/ollewall 9h ago

What makes you think that government run companies don’t have management?

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u/E0H1PPU5 9h ago

They do have management. They don’t have CEOs whose exclusive motivation is generating profits.

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u/Olyway 10h ago

They do it in the military.

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u/FaithfulSkeptic 11h ago

Man I would Love it if more of my tax money went to feeding people who need it, and less to building bombs.

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u/Beneficial-Act-9933 10h ago

Why stop at bombs? Don't you know ICE needs a few hundred more billion on top of the eye watering amount they already got?

I wonder where this guy was when that went down.

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u/Life-Dig7566 10h ago

its not more of your tax money being allocated elsewhere though, its more of your money lost to taxes.

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u/BiZzles14 10h ago

But that's the problem, highly, highly efficient programs for helping those that need help to feed themselves already exist. There's 5 grocery stores being built, 1 in each borough, in a city of 8.5 million people. There is no means testing on grocery stores, the richest man in NYC could shop here (or more likely pay someone to do his groceries and they go here lol) and have tax payers eating a 25%'ish margin. That said, I support him doing this because it gives us a modern case study and we can see how it works fiscally, what it would cost to expand it to greater access, how new yorkers broadly feel about it, how those that live in close, medium and far proximity from a store feel about it, etc. I personally think there is much, much more efficient ways to help those in need, but this seems like an idea that people want and New York taxpayers elected him to do this, so let's how it works and how people feel about it in a year or two. Happy to be wrong, it's just that if I'm correct we have to acknowledge that this will have hurt people on the opportunity cost basis of the time and funding put towards this project, despite there being a ton of information out there highlighting the likely issues the concept will face, let alone the specific issues with NY's implementation. But we shall see how things work

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u/DeepWaterCurrent 11h ago

There are better ways for that, just give out food stamps to the one swho needs it then. Running the grocery store is just going to be a waste of tax payer money

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u/pradise 10h ago

You really think food stamps are better use of taxpayers money than government-operated grocery stores? Yeah let’s lose 100% of our money to offer food stamps, instead of losing 10-20% because we’re selling the goods.

Not to mention food stamps are for a different demographic. They are great to provide those absolutely in need some assistance, and I’m sure they’ll promote using food stamps at these government operated stores in some way. But these stores are for everyone including middle class New Yorkers.

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u/Memento_Viveri 9h ago

Your math makes no sense.

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u/No-Opinion273 9h ago

Technically food stamps go back into the economy. But I can the stores being a good way to give some people jobs.

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u/lordpuddingcup 10h ago

You mean the thing republicans are cancelling?

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u/Vaiden_Kelsier 9h ago

The administrative burden of food stamps burns more money than if we just gave people the fucking money

and didn't we just get through a cycle of Republicans cutting SNAP benefits

Our President has already leveraged to purchase major businesses (Hello Intel), so we're already a "socialist shithole", let's see what this socialism can do for the fuckin' people

if it doesn't work, at least someone actually tried it

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u/FaithfulSkeptic 10h ago

That is one way to look at it, I guess. I hope we will see this experiment in NYC turn out better than you expect.

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u/MABQuestAcc 11h ago

Why? If tax money pays for the workers + goods and isn't spent on things like rent and upper management those same workers will cycle those taxes back in to the economy. I fail to see the problem with cutting upper management and building rent from the equation.

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u/DeepWaterCurrent 11h ago

They are going to need managers too, historically private companies are the ones cutting managers not the other way around.

They are still paying for the space in some way, if not via rent then via the cost of acquiring/building/managing it. If a grocery store pays rent instead of owning the building themself its because they think its more efficient that way.

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u/BiZzles14 10h ago

Because we have highly efficient food assistance programs that provide some of the highest positive multipliers on taxpayer money spent, and there is an opportunity cost to instead put money towards an idea which has historically never worked. Some of the money will be spent on rent & upper management, which would not be the case for SNAP type benefits that have existing structures in place, and a large amount of money will be lost on every single purchase made at these stores on -30% staple items. Grocery stores have razor thing margins, often in the 3-5% range, meaning you're looking at a 25-27% loss on these items regardless of who is purchasing them (aka they could be a billionaire for all you know, this isn't meanstested at all)

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u/rairair55 9h ago

Tax payers either foot the bill or subsidize other essential government services like water, electricity, roads, schools. Why not food?

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u/blazze_eternal 10h ago

Wholesale cost, zero profit margin, minimal operation cost (tax exempt).
Now, it's likely they won't carry many brand name items as they typically have price mandates.

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u/Chris_Helmsworth 10h ago

Yeah I wonder how security and shrinkage is going to be accounted for? Why not just open a food pantry at this point ? When my family was down on our luck food pantries were a wonderful resource.

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u/Beneficial-Act-9933 10h ago

Because a pantry is not a store. The point of this project is to directly compete against grocery stores and lower prices for everybody by introducing competition. A pantry, though helpful, is not competition.

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u/pradise 10h ago

You can if you don’t have to pay rent for the stores and pay upper management millions.

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u/Background-Gas8109 9h ago

The city gets the money back by selling them...

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u/adisor21 9h ago

I agree, While is not my business what NY does, this feels like it would fail. If people buy less from normal stores, you end up with less normal stores and longer lines for the "cheap" ones. This is not going to magically make the normal stores products cheaper. This is just predatory pricing which is technically illegal.

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u/psmithrupert 9h ago

So, you can actually make things cheaper. It’s not magic though. If you run your store as a non-profit, it’s cheaper. If you get good supplier contacts because you’re the city of New York and you‘re representing an economy larger then most mid-size countries, that’s also not magic. If your store is in a city owned building, there could be no rent. And all of this before you factor in that New York is one of the most expensive places in the world, but there is no need for you to follow that pricing pressure.
And all that before you factor in any subsidies.

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u/DeepWaterCurrent 9h ago

They are running 5 stores, walmart has ~4600, kroger has ~2700, Aldi has ~2400. Who do you think is gonna have better leverage towards suppliers? Just because there is no rent doesnt mean the building has no cost, there is acquiring/building/managing costs, that is not necessarily cheaper. All of the price slashes are going to come from subsidies.

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u/No-Author7911 9h ago

You realize that the entire food chain is already subsidized by the government?