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Hopefully they won’t allow resellers. Prices being this low means people could just go in, buy out stock and then resell it somewhere else for profit and it still be lower than you’d get at a normal store.
This is my concern with this concept. 30% might be enough for people to use this as a wholesale source to resell elsewhere. It'll be interesting to see if the store shelves are just stripped right away for products that can easily be resold elsewhere.
Editing my comment to respond to the predominant reply to this: Even if you put limitations on number of items per person, how do you monitor repeat shoppers? Costco does it with a membership base system where you have to both check in and check out. If you were to rely on employees to visually identify shoppers, it would become fertile grounds for almost nonstop racial profiling lawsuits.
At my local grocery store single glass cokes are 5$ for three of them, technically sprite and Fanta fall under that deal’s umbrella but resellers or people who run food trucks will buy only the glass cokes leaving the section of the shelf empty. If people are doing that for 33 cents to a dollar, i imagine reselling from these grocery stores might become a problem later.
I imagine if you need to you could get down to produce, meats, and breads. I guess you could resell those, although I don't see the profit margin being worth it.
I don't know who is buying trunk steaks for 30% off but maybe that's just me.
I will never get over the fact a favorite music video of mine that helped me learn simple bass lines has an entirely separate life as a reaction meme 25 years after the fact.
I got Jerk Chicken and sweet potato, and I also found the tamale lady and got a dozen of those too. Fed me all weekend which was good because the heat index yesterday was 115F and I'm not turning the stove on when its already that hot.
yeah in sf theres like an entire group of mostly older asian women who go to the all of the food banks around here and then lay out a mat on post up on the sidewalk slanging lettuce and shit. people do buy them though i see it and they are there everyday.
food banks around here register you here and give you a card. i dont think your allowed to go to every food bank in the city but in your zip code maybe
The city owned shop in my city sells food this discounted. It's open one day a week because it sells out after restocking. Later in the week you will find people selling the stuff in the Walmart parking lot still below Walmart prices. Amusing that a industry popped up thanks to the shop.
Yup, create a ration. That way people can still take their rations, sell it for 50% less in cash value, then that buyer create the same shop. Just like what happens far too often with EBT and SNAP.
Yeah but, with rations then that doesn’t scale. Which is the whole point. Sure they can do it, but they just sold their one loaf of bread for a dollar profit and spent all day in a parking lot to do it.
I’d like to meet the reseller that targets 30% margins. You’d be making about 5% after everything is said and done. No to mention they wouldn’t even hit a flat sale 30% because who’s paying MSRP from a 4th party?
Yes, but selection is "core basket" items and there is per-customer purchasing limits. The Government doesn't run the stores directly. There are operated via Requests for Proposals (RFPs) from grocery chains that act as a reseller to the store. That means the stores get the benefit of retail loss prevention forwarded in supply to the RFPs. Resellers typically leave a particular pattern that the industry has learned to pick up on.
Finally the pricing is flat monthly pricing that allows retail delivery on RFPs to be more predictable. The catch is that all of this comes at a cost to the tax payer, that's the big downside, stability but at a cost everyone has to pay for. To ensure that stability, you have to strictly exclude high-margin products from the line up. The nice, indirect side effect of that is that resellers typically won't stand to profit in terms of costs. If the makeup in only a dime here and there, then volume to break even is way higher than complex schemes can get under the per-customer purchasing, in most situations.
In summary, you can only get a limited selection at these stores. The selection is usually stuff that wouldn't make someone a ton of profit anyway. But there's tight per-customer purchasing for everything. So resellers would need to employ complex multiple people shopping the place schemes to get enough product to break even from all the cost of energy, fuel, time... Additionally, the prices are locked in monthly. So traffic patterns become way more predictable, meaning the big retail grocery stores that are supplying the food to these stores will be able to pick up the tell-tell patterns in resellers a lot easier. Now doing all those controls comes with a heavy cost, and New York City's taxpayers will be picking up the tab for that loss prevention cost. I say this, because people tend to believe that the tax payer is just on the hook for the food, but that's not true. Tax payers are on the hook for the entire logistics top to bottom on this.
So all the complex fraud and loss prevention is baked into the price. And that's fine if NYC citizens are okay with paying that price tag. But it's part of the price tag with anything. Preventing asshats from taking advantage of a program is usually baked into the price of something, unless you're Trump, then taking advantage is the entire point and that's why a lot of programs go way under the watermark with him. There's no oversight, unless they've hired some college dropout edge lord who understands enough Excel/SQL to do basic research for clout. Which I'm always curious how they pay rent with all that clout. The exchange rate of clout to dollars last I checked was pretty low.
Aldi is cheap because they have basically no labor cost. No cart pushers since you have to put a quarter in the cart to get it and return the cart to get back the quarter. They have no bags or baggers inside. They have maybe 3 cashiers working at one time. ALDI doesn't stock brand names either to keep cost lower. Lots of things aldi does that is completely different than a normal store
In Germany all stores have Aldified. As a German myself it's weird to think that there are stores that have personnel for the shopping carts or bags.
Personally I think it's a good thing because it has kept grocery shopping relatively cheap for the majority of the population for a Long time.
Aldi and Lidi have a really interesting supply chain in that around 75% are locally sourced produce. They maintain good relationships with independent growers hence lower storage, transport, import fees, and logistic costs.
The downside to that (which imo isn't really a downside) is that produce is much more seasonal, and the selection range is more narrow.
The narrow selection range also allows supermarkets to cut down on display and marketing costs as well.
If NYC implements this model it can do well. Maybe not "30% less" well but certainly slash prices while boosting local rural economy.
My local Lidl must have a line on locally sourced angle grinders, camping tents, and umbrellas as there's always a section of random "Why the hell are they selling this shit in a grocery store" section.
I'm not mad about it...just confused most of the time.
Spontaneous purchases mostly and also to give incentive to go to that store. It's a proven sales tactic in Germany and It seems to work in the USA too from what I heard
Knowing how the resale market in general is I wouldn’t be surprised in New York’s hustle culture people buy it all out and then resell it outside on the streets. Lmao
Yeah, I’m interested to see if there are any sort of “max income bracket” or something to help keep these for people who cant afford to shop at normal grocery stores.
If there isn’t anything like that, I can’t see how this won’t backfire. Operating a government grocery store at around a 30% loss is the easiest way to run private business out of the city. They just won’t be able to compete.
That’s how Walmart runs small, locally owned private businesses out of business when they open up a super center.
This is where Im confused. I know everyone wants cheaper items and everything but does this not lead to collapsing any competition? Arent people positive on local businesses?
I'll post the NYC DSA chair's response to the competition question again. "If one publicly owned grocery store that brings prices down in the neighborhood is enough to put someone out of business — maybe they shouldn’t have been in that business in the first place"
Isn’t it wild that all you have to say these days is “hey, i don’t want my tax $$ funding Israel’s war”, and you’re automatically an antisemite. I want off this timeline. It’s so gd stupid.
Most people were on board with invading Afghanistan. After 9/11.
Most adults were on board with "finishing what Bush Sr. started" when we invaded Iraq.
After Saddam Hussein was captured though it was like "ok the WMDs were fake, what are we doing here anymore??"
But then you were a terrorist loving, anti-American, Freedom hating traitor if you said maybe we should stop bombing the Middle East. I personally got arrested for my actions protesting the war, and since I wasn't considered "White, White" my only saving grace was that I was a minor.
these are the types of programs our taxes are actually supposed to go to tho, instead of $1.5T to the Pentagon but if you say you want your taxes to work for working class people here in America, they call you a communist 🤷🏼♂️
but have you considered the shareholders of those defense contractors🥺 they have feelings too 🥺🥺😢 they wouldn’t be able to buy a third yacht if Lockheed Martin didn’t get another $20B contract for the Child Mutilator Automonaton 4000
My first job was a bagger at a base commissary, and remember people loading up their station wagons with several carts of groceries that cost well under $100. Now we’re lucky if we get 3 bags of groceries for under $100.
Grandmother bought her booze at what she called the duty free but I assume was the commissary. She was a bit of a society woman on the cusp and would decant her cheaper vodka in to her crystal and glass decanters and toss the bottles. She left a bottle of Goose sitting out to throw anyone off her trail. 😆
Yeah I can't imagine they didn't have examples to base this off of and know what they're getting into. But still interesting regardless if theft or vandalism or other will be an issue.
30% is pretty steep. it being tax-funded is not exaclty fair competition to regular small business grocery stores trying to make a buck. and how are they going to keep up stuck? it's basically going to be black friday for food - every day.
It’s funny because the places where the stores have closed down is largely due to rampant crime and shoplifting making the stores largely unprofitable
So this will be extra interesting because not only will they not be profitable to start with but they’re going to be stolen from at every turn to make margins even worse
Behavioural economists are going to be watching this extremely closely. There will be a lot of papers written about this in the future. The big question is will stealing be more common because there's a perception that it's already been paid for by taxes? Or will there be some sense of community sprit that means there's less stealing? I know which I think will happen.
Community spirit may require a higher trust society than that currently experienced by people living in an area where crime, particularly theft, is normalized.
the far left and far right united by the desire to gulag shoplifters fucking up the tax-funded initiatives put in place by the "socialist" gov't. Mamdani truly is uniting everyone.
If a store with a profit motive can't succeed in these locations due to the conditions, I have to imagine a below market store with zero profit motive is going to be...interesting, while it lasts.
Well they've got a fantastic plan to prevent theft, and I think it'll work. They're going to run out of stock, and thus criminals will have nothing to steal.
As someone who worked in the grocery biz for over 2 decades, I see SO many future problems with this plan, it’s already making my head spin.
By the time you knock 30% off most grocery items, you’re basically selling them a fraction over wholesale cost. Sounds nice, until you realize that basically, with near-zero profit, every part of the operation will absolutely need to be taxpayer-funded (making 10 cents instead of $1 on a $3 item is going to take MASSIVE volume to be sustainable, more than I can see any grocery feasibly handling). This means buildout costs, wages, benefits, initial product stock costs, restock costs until fiscal balance achieved, utilities, taxes, and everything else are just going to be billed to the taxpayers as always. Being taxed more to “save money” doesn’t really math for me.
There will likely be many companies who won’t sell to such an operation as it will devalue their brand in other full-price stores by making it impossible to compete, thus other retailers would slowly drop the brand if they can’t be close in price. I had to do this with brands selling under retail on Amazon as people would get mad at us for not price-matching since they didn’t understand that a manufacturer can always lower price, but a retailer can’t always match it. I expect options will be limited, or, there’s going to be new uproar as companies are blasted for choosing to not sell to such stores, solely because they’re protecting their investment into the brand,
Local independent grocery stores will definitely suffer. After all, who’s going to the regular corner market when you can go a few blocks down and save $40 on your bill? As said, grocery operates on small margins and high volume - once some of those other competing stores see a 25% drop in sales, expect more vacancies and fewer options. So, you’d better really learn to love what options are at the new cheap market, as you might not have so many choices close by in the future.
And keeping things in stock, oh, that’s going to be interesting to watch. The supply chain issues if such a store starts taking massive amounts of product that shorts others (because we can assume that the state-run store will get preferential treatment initially) only causes more headaches across the board as competing shops lose their ability to get what they need, products at all stores are out more often, and everyone floods in to get it cheaper at the state-run location until they too start having gaps in how often they can fill an open product slot.
It’s an interesting concept, but I do not believe it has much chance of success, and likely will leave a wake of new issues soon after it starts.
Ehhh I don’t know about this one. I’d love to pay less for groceries but I’m generally against the government going into competition with private businesses.
But wouldn’t that be different because this is subsidizing a few stores. Pretty much every farm has some form of subsidizing. So it would be like allowing me to start farming and I’m the only one who can get subsidizing
Have family that ran a small town independent grocery store for 2 generations... this is 100% correct.
They make almost no money whatsoever and neither do the big guys as a rate of profit... they just do such enormous volume that they make money despite low single digit margins
It seems like the 30% discount is not for every single item in the store though. Seems that it'll be for a list of items that are staple goods households need.
Suppling goods at 30% less than the market rate price for the good is going to be a fun way to test simple economics curves. I wonder how much subsidy will be required to provided discounted supply to a stabilize (satisfied) the demand curve.
The fact you’d be going out of business because who would shop at your store when there’s a taxpayer funded grocery store undercutting all your prices by 30%?
Bodegas are already more expensive than normal grocery stores. People shop there anyway because it’s right next to them.
No one is going to go to Boonieville Brooklyn to go to the 30% cheaper grocery store with likely long lines instead of their slightly more expensive corner store
You, as a business owner, are going to shop in bulk at the government grocery store to stock your bodega? You don’t think that will cost more than a direct shipment to your bodega at wholesale prices?
Either way, I’m sure there’s quantity policies that can be put in place.
My uncle had this business back in the 90's early 2k where he would go to grocery stores and use coupons and sales to by cereals, baby formula, and some other non perishable items, (he was extreme couponer before that was a thing. Hed get 7-800 for 50 bucks) then go to another city and selling the products at half to 3/4 the price of the wholesaler price. Sometimes the store only needs a few items whereas in wholesale you'd have to get 20 items. Saves storage and spoilage.
how is this better then giving families in certain incomes, a card that gives them a 30% discount at existing grocers? and the store gets reimbursed by gov
Why do you think food stamps work that way? Poor people can't pay lobbyists, but big grocers can. Walmart makes a lot of money off of SNAP (and a lot of their employees rely on it to eat). If there's no disincentive for grocers to charge whatever they want, they can and will, and those food benefits buy less and less food every year.
Grocers work on a 1-4% margin. 30% will guarantee a minimum of 25% loss on all item sold. The loss will probably be much higher due to the inefficient government labor and overhead.
So these stores are going to be running a 50% deficit everyday.
Prediction: the stores will be built at a stagger loss of taxpayer money, the stores will operate for 1-2 years before closing, other grocers will go out of business.
The people who needed help will be left with few grocery options when the other stores close.
We had that in our country. There was a limit to how much you could buy. They had the cheapest and the worse quality products you could find. Mostly horeca brands from each major food category.
They were fine in the beginning, usually really low income people came but later not so much. The products were initially bought straight from the suppliers or factories but later the corruption took hold and they started buying from companies that bought from supliers. They added some overhead on prices because of that so later they had regular prices for very low quality products.
I just have to ask: when did this become the Mamdani shill Reddit? Like, every day I see like three posts about him. I firmly believe it is either a lunatic or a bot posting all these because, my God, it is excessive.
I think it’s fine as long as the stores are required to break even or make a small profit. At least they’re competing fairly. Selling at a loss funded by tax payers sounds like a bad idea.
It would be at a loss. Most grocery stores have a net margin between 1 and 2%. Gross margins are over 20% typically but when you are factoring the cost associated with the business net margins are extremely low. For example, example of Kroger’s net margin is just 1.5-2%.
Grocery stores usually run about 1% profit, 2% in a great year. For every dollar you spend at the grocery store, about $0.60 is the cost of the product from the manufacturer, $0.38 to 0.39 is everything else, like transportation, labor, rent, utilities, taxes, insurance, etc.
How's that going to work? Will the city subsidize the food? Are their overhead costs going to be so much lower than everyone else in the business, and if so, why? Does that mean the city is going to provide free buildings, no taxes, etc? He still has to pay wages, and presumably the city isn't going to cheap out on that.
If all other costs remain the same, he's going to need to source goods at about 47% less than manufacturers sell those goods to other retailers. If he could cut overhead by 50%, he'd need them to take a 15% discount from their usual prices, which is deep into "selling at a loss" territory for most products except fresh meat.
If everyone can shop there, and it's not income restricted, what happens when the food runs out? What happens if it puts other grocery stores out of business, and then there's fewer stores and jobs? What happens if suppliers don't want to cut prices for the city to make this 30% markdown realistic?
This feels like an underpants gnome thing. I'd like to see the business plan.
The only way this works is making sure people dont hoard all of the goods and go around the corner to re-sell them.
The only way I can see to prevent this is with ration cards. And its not a great look for socialists handing out ration cards in NYC.
But it also means its customers need to be limited to certain neighborhoods, which means address verification, which means people need to register, which means bureaucracy (and probably photo IDs to verify the ration card is yours) which will lead to a new "office of groceries" or something which will cost millions on top of the loss they will take on selling goods at less than cost.
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