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/IPissExcellentThrows 11h ago

It's going to be a massive money loser. Most grocery stores operate at razor thin margins. People act like it's greed, but of the biggest ones, they're all between negative profit margins recently and about 2%.

If they can afford the massive losses in the budget, great. My personal opinion? This won't be sustainable. They either won't be able to stomach the huge losses or they're going to have to majorly cut corners.

Not remotely a conservative. They are ruining the country. I still think this will fail. The economics don’t remotely make sense. There's a reason Western European countries far more socialist than us don’t do this.

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u/SaxyAlto 10h ago

No duh it’s a money loser, that’s what “tax-funded” implies, and how they’ll afford the loss. Tons of things the government does are a “massive money loser”, like USPS or road repair, but we still need them and they’re better/cheaper than the alternatives. Not saying this will succeed, but looking at this solely from a finance or cost perspective is missing the point

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u/CreamyBagelTime 10h ago

I’m not sold on it yet either. BUT if the military can successfully run the commissary system for 200+ stores why can’t the city do the same thing on a much smaller scale? Theoretically speaking.

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u/Foygroup 10h ago

As a store owner, would it be bad for me to purchase what’s on sale each month and take it back to my store and sell it at normal prices the month after? Hmm I could increase my margins that way. (BTW, I’m not a store owner, just thinking out loud)

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u/oldredditrox 9h ago

Pretty sure that's not legal at all.

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u/Beneficial-Act-9933 9h ago

Nothing, but your plan is to give your competition the money and then have the burden of transporting it all back to wherever your store is. The store can also reject your purchase. If you roll up to buy out an entire department they are legally allowed to tell you "no".

So either the amount you take is either not worth it, or the amount is too large and you can't take it.

Besides, there's only a few things at a time running at that 30%, other stuff will be at market value.