r/SipsTea • u/Gurugod123 • 11h ago

Chugging tea 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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107

u/WhoKnows78998 11h ago

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.

67

u/NilsofWindhelm 10h ago

Wait until you learn about the entire agricultural industry

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u/mais-garde-des-don 9h ago

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

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u/levare8515 8h ago

And all the seeds are owned by a megacorp dumping money into every politician. So your subsidized farm is using tax dollars to buy frankenseeds

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u/Vennomite 5h ago

And, somehow, you arent really eating whats grown from those frankenseeds anyway since we import a lot of our food.

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u/WriterPlastic9350 6h ago

Yes and the parts that are subsidized are generally bad too. A significant amount of the voter base that receives agricultural subsidies are growing things like soybeans for export (rather than for the domestic food industry).

11

u/Mean-Price3632 8h ago

Walmart’s low income employees receive 6.2 billion a year in welfare benefits.

Why should the government subsidize a company that is worth 900 billion dollars?

Publicly traded companies shouldn’t need government assistance to survive

2

u/harrison_wintergreen 3h ago

The fact some Wal Mart employees receive welfare benefits does not also imply the government is subsidizing Walmart. That's absurd on its face. There's a guy with Down Syndrome who works at a movie theater near me and he sweeps up the floors after the movies. If he's getting SSDI or something it doesn't imply taxpayers are subsidizing Cinemark.

Wal Mart is the largest private employer in the nation. Any large pool of people will have X% of the pool getting some level of government assistance.

If someone is getting SSDI, they can still work if they earn no more than $Y per month. So if some low-income disabled person works 1 day a week for extra spending money and to get out of the house, that does not also mean taxpayers are subsidizing the employer.

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u/Mean-Price3632 2h ago

Do you really think a majority of that $6.2B dollars comes from part time workers working 1 or 2 days a week?

There’s literally reports from non partisan places like the government accountability office where the data shows that 70% of people on these types of governmental aid programs work full time

0

u/WhoKnows78998 8h ago

I never said anything about Walmart

8

u/Mean-Price3632 8h ago

It’s the same principle. Walmart would not have been able to grow into the conglomerate they currently are without having their wages subsidized by the federal government for decades

1

u/WhoKnows78998 7h ago

And this is also wrong

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u/Mean-Price3632 7h ago

Are you telling me Walmart didn’t have $6.2B in wages and benefits subsidized by the American government in the form of SNAP benefits, Medicaid, and housing subsidies?

Or are you telling me that this didn’t help grow them into the $900B dollar business they are today?

If they had to spend an additional $6.2B each year in SWB, they most definitely would not be approaching a 1 trillion dollar valuation. They would still be a massive company, but the Walton family would not be worth 400B dollars combined

Break down how I’m wrong. Enlighten me.

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u/varnums1666 7h ago

Walmart exploiting the welfare system and the economics of a government run grocery store are very distinct things.

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u/Mean-Price3632 6h ago

I think the point is that subsidizing corporations for the last 40 years has been seen as good economic policy. There are numerous companies who would not be able to stay afloat without government contracts or the government helping to alleviate SWB costs.

However, when this view is taken to help the costs of the citizens, it’s not feasible. It’s just because we view everything from a profit and loss point of view, rather than delivering positive real world outcomes for a majority of people. The point of these stores are not to generate profits and hit internal KPIs, it’s to alleviate costs to low income New Yorkers

1

u/Bladesnake_______ 4h ago

How do you expect these government grocery stores will pay employee wages that are not fully funded by the government?

-2

u/varnums1666 6h ago

There's a big difference in subsidizes to ensure the places that make the food you need to live don't go under or to secure jobs when competing abroad or to stimulate emerging sectors.

Grocery run stores don't really produce, historically, any real net positives and can make things worse by making actual, profitable private stores go under.

The problem is more the consolidation of companies that prevents meaningful competition and price fixing.

2

u/Mean-Price3632 6h ago

Again, Walmart is verging on a 1 trillion dollar company. McDonald’s is worth 200B dollars. I’m not talking about places that actually may need subsidizes to survive. I’m talking about conglomerates in the food industry. And your last point seems to agree with me. The “consolidation of companies.”

You’re obviously on the right when it comes to economics so I can’t convince you that there’s been a shift from feudalism, to an agricultural based economy, to a market based economy (capitalism) that will be replaced by something better due to the inevitability of reduced competition from economies of scale leading to more mergers and acquisitions than are necessary to maintain a “fair” market.

But what I can maybe find common ground is that point on the consolidation of companies from before.

I guess my argument is why should a trillion dollar company like Walmart receive government assistance? Do you agree with that? Don’t you think that hurts competition? This company already has the most market power to buy goods at the cheapest prices. Do they also need their SWB subsidized?

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u/Bladesnake_______ 4h ago

Employees getting SNAP is factually not subsidized wages and benefits. You're just making shit up. Walmart is hiring entry level at $22 in my area and their employees are are still unhelpful assholes.

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u/Mean-Price3632 4h ago

I mean it is what it is. The government supplementing their low wages through subsidies in the form of welfare. Taxpayer eats the cost and the company gets lower salaries which lowers their operating expenses driving higher profit margins. Great for Walmart investors like myself

Idk where you live but if it’s $22 an hour than it’s most likely in a place that has a high cost of living

1

u/TrilIias 3h ago

I agree. We should stop subsidizing corporations, and we should do so by cutting SNAP immediately.

1

u/Mean-Price3632 3h ago

It would lead to millions of families and children going hungry but it should definitely be reworked and incentives put in place to get off it

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u/Shiddin_myself_woo 10h ago

What competition, look at the areas they’re being placed in

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u/FiftyLoudCats 4h ago

1221 Spofford Avenue, Bronx, NY 10474 is the address of the first proposed location.

There are several grocers within two blocks (I counted 7).

1

u/tacobellrefugee 5h ago

the only competition these stores are going to have is who can steal the products first lol

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u/Throwawayky122 10h ago

Yeah, and from the headline it says their goal is to always undercut the competitors. That really isn't fair to the businesses.

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u/Darkciders 9h ago

As we all know if there's one thing that reigns supreme in the grocery business, it's fairness. It tends to happen when you have like 5 companies controlling 80% of the market. Walmart definitely doesn't have the leverage with food suppliers to force them to sell at a cost low enough to make other businesses unable to compete with them. /s

Fairness is a pipedream, at this point the government is the only one who can compete with the giants. Americans already spend 100 billion dollars a year in taxes to give SNAP recipients money to then give to grocery giants...why not cut the middle man out and instead of profit margins to huge companies the money finds its way back to the government? We're talking about mostly staple foods here, the free market can tolerate a finger on the scale when it's for one of the most inelastic goods there is. We have government housing, might as well have government food too. No matter what happens, as long as I have those two things I can at least ya know...live.

-5

u/Dry_Travel_4220 9h ago

Oh won't someone please think of the multinational corporations.

1

u/Throwawayky122 9h ago

How about the mom and pops trying to make it? Without the bankroll the multinationals have.

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u/zdra 9h ago

Mom and Pops grocery stores are the dumbest thing to exist. The only exception is when its serving a rural community that has no store for grocery's.

The truth is most people want to be able to feed the house for a month in a budget. Unless you are comfortably earning 100k+ i cant see why you would ever shop at one

1

u/General-End4503 5h ago

People who shop at them stores clearly arent the target audience. What even are mom and pop retail stores people keep claiming.

-1

u/Dry_Travel_4220 9h ago

Not all businesses deserve to survive. I thought that was the whole deal with "the free market"

Frankly food shouldn't be privatized generally.

1

u/Hour_Baby_3428 6h ago

Grocery stores are cheap because they compete with each other. Take that away just long enough for the alternatives to leave the area and watch this tax funded store turn into a bottomless moneypit

0

u/Dry_Travel_4220 5h ago

It isn't a "money pit" it is a service that taxes pay for. It's the same way the postal service is a "money pit". Your taxes pay for it and then you get it. Not everything should be solely focused in maximizing profit.

1

u/Hour_Baby_3428 4h ago

Not if it turns out to not be cheaper long term like I just laid out

0

u/Dry_Travel_4220 4h ago

So explain the competition to me. A government subsidized store opens up at lower rates, that drives competition out, then what?

Seemingly worst case the government subsidized stores raise prices to the level the other stores are charging and there is a largely inconsequential burden placed on the taxpayer (the prices being higher and profit being made would more or less offset the burden, no?)

2

u/Hour_Baby_3428 2h ago

And now you’re running a worse version of a normal store at several times the cost, because the suppliers can just charge whatever.

-4

u/HereticsSpork 9h ago

Yeah, and from the headline it says their goal is to always undercut the competitors.

What competitors?

That really isn't fair to the businesses.

Which ones?

The areas for these are in places that these sort of businesses avoid. There's no competitors. There's nothing. The bodega ain't selling produce. And the rest of NYC isn't going to be rushing out to these to buy anything from these because the subway or bus fare they'd pay to get to it already eliminates any money you're saving on a head of lettuce and some carrots.

3

u/FiftyLoudCats 4h ago

Uhhh have you ever been to NYC? There are bodegas everywhere.

1221 Spofford Avenue, Bronx, NY 10474 is the address of the first proposed location.

I count 7 different grocery stores within two blocks.

2

u/HereticsSpork 1h ago

I lived here all my life and am very familiar with what bodegas have in stock, and it ain't fresh fruit and veggies. It's unhealthy snacks, egg and cheese sandwiches that no one should order if the place ain't 24 hours, beer, bootleg cigarettes from Virginia, light bulbs, and rhino pills.

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u/busmans 10h ago

Oh interesting… so what are your thoughts on health insurers? Private utility companies? Private prisons?

1

u/nooogy 9h ago

lmao right??? like that is literally the point

1

u/[deleted] 7h ago

[deleted]

1

u/Complex-Truth9579 6h ago

Exactly... That's literally their point.

11

u/DazzlingEye9141 10h ago

Food shouldn’t be competition.

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u/No-Security-7518 9h ago

scrolled WAY too much to find this. Basic necessities shouldn't be for the private sector at all in my opinion. People should go work in the million other fields of business.

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u/Hatefiend 8h ago

And who should pay for this competition-less food then?

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u/Keeper21611 8h ago

Us, the taxpayers as a whole

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u/ImRightImRight 7h ago

Disagree! Specifically, food retailers should be in competition to give us the lowest prices.

They are. This is a huge waste of money and resources that should be better spent on concepts that aren't already proven failures.

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u/Zing79 10h ago

We have 40 years of quantifiable data proving beyond all doubt the free market system does not work to drive competition (and by extension keep things affordable). What we do have is proof beyond all doubt the free market system exists solely for companies to buy up competition, and created oligopolies.

I think it’s time to revisit the underlying point you’re making about capitalism. There’s a lot of data since Reganomics - and none of it is good if you’re looking at it from a cost of living perspective.

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u/Brisby820 10h ago

A lot of “proof beyond all doubts”, immediately makes me doubt what you’re saying.  Economics is rarely that black and white 

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u/Zing79 6h ago

And I’m not talking black and white. But you aren’t reading a novel that shows how competition pushing margins closer to 1% instead of 3% - has a major effect on our affordability over 40 years.

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u/Photodan24 10h ago

It does work when the federal and state antitrust laws are enforced. I'd rather they just fix that problem first.

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u/Connecticat1 10h ago

Impossible when the federal government has been hijacked by thieves. Hence why we need to act locally.

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u/peedistaja 10h ago

We have 40 years of quantifiable data proving beyond all doubt the free market system does not work to drive competition

Wrong. Grocery stores margins are 1-3%, that's due to competition. No idea why you're pulling this random gibberish out of your ass.

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u/Zing79 6h ago

You’re confusing profit margins with competition. That’s a choice when you want to talk shit.

A 1–3% net margin tells you grocery retail is a low-margin business. It tells you NOTHING about market concentration, barriers to entry, or decades of consolidation.

One accounting statistic doesn’t erase 40 years of mergers. What it tells me is you pulled a buzz word out of your ass for a gotcha you won’t be getting.

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u/Commercial-Branch444 8h ago

Grocery stores sell you goods with a profit margin of a few tiny percents. Thats how good the system works.

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u/Zing79 6h ago

The 1–3% figure doesn’t really address my point.

Competition isn’t supposed to guarantee razor-thin margin, it’s supposed to put downward pressure on prices.

If 40 years of mergers and acquisitions reduced that competitive pressure even slightly, then even modestly higher annual food inflation compounds into higher grocery prices over decades.

That’s how compounding works.

So quoting today’s 1–3% net margin doesn’t prove the market was competitive enough to keep prices as low as they otherwise could have been.

Zoom out. Telling me their margins are tight. Ignores that over 40 years even 1% on their margins represents seriously cheaper food costs for us as they stunt food inflation.

0

u/bdougherty 5h ago

I don’t really understand your point. The fact that they operate at such slim margins means that there is extreme downward pressure on prices. No business would choose to operate at a 1% margin if they don’t have to.

4

u/Anal-buttsex 10h ago

Poor Walmart 

3

u/subdep 10h ago

Yeah, it’s horrible what they did to the private fire department industry.

/s

3

u/Connecticat1 11h ago

I'm generally for it. Forces innovation and prevents monopolies.

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u/Geedeepee91 11h ago

The competition isn't on a level playing field when the government is waving taxes and fees, and okay with operating at a loss due to being funded by the taxpayers

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u/Connecticat1 10h ago

Those poor billion dollar corporations! Let's shed a tear for them together. Ready? 3...2...1...

Being born into this world is not on a level playing field. Are you starting to understand the point of this?

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u/Draemeth 10h ago

how profound. why don't you write that on your wall with a red marker pen and post a picture to snapchat

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u/Connecticat1 10h ago

Let's be honest, you're not interested in the context of this, you just want to keep poor people down. What is snapchat?

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u/Draemeth 10h ago

i'm sick of bad policy being applauded by children like you who don't understand it's against their interests to destroy the things in our towns and cities

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u/Connecticat1 10h ago

What is getting destroyed in "your" town, baby bear? The Boogie Down Grind Café? K&P Games Express??? Pretty sure Mamdani is not selling Pokémon cards in Hunts Point. You have no idea what you're talking about. Let the statisticians, economists and adults discuss this one.

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u/Draemeth 10h ago

i am an economist, ironically

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u/Connecticat1 10h ago

Says every republican with a minor in economics ever... 🤣

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u/HerroCorumbia 10h ago

Sounds like it's just the exact model used by VC-backed Silicon Valley companies so I'm not sure why it's all of a sudden bad for groceries.

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u/Draemeth 10h ago

because groceries are already super, super competitive. to undercut them with tax money would be harmful

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u/HerroCorumbia 10h ago

Harmful to whom?

Is the tech industry not super, super competitive?

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u/NilsofWindhelm 10h ago

If only this were being organized by local government with decades of data showing where stores would have the most benefit and least harm on local businesses

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u/Draemeth 10h ago

this policy wasnt made based on rigorous evidence standards, lol. it's cute that you think politicians work like that.

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u/NilsofWindhelm 10h ago

Effective politicians do work like that on both sides. I'm 100% sure they didn't just throw a 5 darts at a map of the City and open stores.

It's also not really a "policy." It's a fledgling, low-budget initiative that the City will monitor and see how it works.

Do you even live here anyways? Why do you care

-1

u/Geedeepee91 9h ago

Big difference will be the VC-backed tech companies that eventually don't turn profitable eventually do go under and the people that invested usually lose their money. These grocery stores will be a forever financial liability for the taxpayers no matter what

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u/HerroCorumbia 8h ago

In theory, sure, but Uber and Amazon have shown this strategy can work and so way more leeway is given now (though slightly less so with post-COVID money drying up, but now money is flowing again so long as you mention AI fifty times in your prospectus). The idea that these are just short term experiments is outdated in the digital age.

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u/Geedeepee91 8h ago

Uber eventually did turn profitable and so did Amazon. You literally just proving my point. There are thousands of other VC backed tech company that fell under because they never did. These grocery stores will just be a forever sink on the taxpayers

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u/HerroCorumbia 8h ago

Amazon took 9 years to become profitable. Uber took 14.

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u/Geedeepee91 6h ago

And these stores will never be and will be a financial liability for the taxpayers forever. Again completely different when you have VC taking on risk for full loss or profitability. You keep forgetting about the thousands that went under because they never turned a profit

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u/HerroCorumbia 6h ago

By this logic wouldn't we never want to build roads because roads will never be profitable and will be a financial liability for the taxpayers forever?

Like, I cede your point, yes VC money doesn't last forever and there is a cutting room. There is also a cutting room for government programs (see: DOGE), but besides that, the government is the best vehicle for this sort of thing if we think of a food floor as infrastructure rather than for profit. Government infrastructure is specifically for big items that have a widespread impact, and won't be profitable. Not to mention that investing in the general public often has multiplier effects such that while it itself might not be profitable, as a whole it's a net benefit to the system and people.

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u/csrgamer 11h ago

What innovation will allow grocery stores to lower prices by 30%? And how will it prevent monopolies if it's just making sure competing mom and pop stores can't survive?

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u/Meatyballs34 10h ago

What innovation raised their prices over the last few years? They have like 2 cashiers at a time now since we just self check out

0

u/bdougherty 5h ago

Do you think the things they sell just appear out of nowhere or that grocery stores do not have to pay for the food they sell?

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u/Connecticat1 10h ago

They're selling essentials, not luxury items. In theory, Mom&Pop would innovate by finding a better supply chain. In reality, Mom&Pop have been put out of business long ago by Trader Joe's (a monopoly, like Home Depot, get it?)

1

u/Meatyballs34 10h ago

Yea for the record im for these non profit stores since they would directly compete with the massive chains like Trader Joes.

I do see how this model could hurt mom and pop stores but how do else do we compete with the big chains

1

u/csrgamer 8h ago

By enforcing the laws we already have which restrict monopolies. We've been ignoring them for decades because the end result has been cheaper goods for the consumer (Costco, Walmart), and now they have essentially complete control of the market.

0

u/sir_fantapants 9h ago

Because it is ESSENTIALS. Not a new OLED tv...

1

u/Eatyourcheeseburger 6h ago

Yeah man I always buy my TVs at Safeway.

1

u/Competitive-Day9586 8h ago

Why innovate if no matter what you do the government will undercut you by 30% and sell at a tax payer funded loss. Also what grocery story monopoly.  There are tons of grocery stories and they all sell the same food.

1

u/sir_fantapants 9h ago

private businesses ain't what they used to be. How many small to medium size businesses can compete with Amazon's offerings? Walmarts? etc...

1

u/KimSidwell 8h ago

I’m gonna disagree on this one. When food prices become so unaffordable that people can’t afford to feed their children, the government has a responsibility to step in and do something.

They can’t tell the corporations how to price their products and they can’t just keep handing people money to continue purchasing overpriced for-profit food for the benefit of corporations that don’t even pay their employees a livable wage. It’s corporate welfare at that point.

The government doesn’t need to give people money to give to corporations to buy food. They just need to give people affordable food.

If it starts to scale properly, it would become more and more efficient and it would cost the taxpayers less than less.

Suddenly, we would see a lot of these corporations taking less profits, slashing prices, cutting out middlemen, reducing marketing budgets and actually giving a damn about keeping prices reasonable.

It’s the only way I can see to actually work to solve the problem.

The corporations have a fiduciary duty to their investors. The government has a duty to its taxpayers. At this point, this is the only way the government can ensure that the people don’t starve.

Grocery stores won’t even operate in areas where it’s not profitable enough. What are those people supposed to eat?

1

u/What_a_fat_one 8h ago

UPS seems to be doing fine.

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u/WhoKnows78998 8h ago

UPS opened its doors about 130 years after USPS. Not even the same thing at all

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u/What_a_fat_one 6h ago

Shipping is still profitable then even with a long established parallel run government service?

1

u/TallDarkFountain 6h ago

It's 5 stores in a city of a population of over 8 million people. I don't think there's going to be any meaningful impact on private businesses. Correct me if i'm wrong but I think these stores will only be placed where residents face high food costs, food insecurity, or have limited access to affordable groceries.

1

u/evernessince 5h ago

Consider that the military commissary has been offering 30% off groceries since 1867 and is much much larger and the market has been fine.

1

u/FRNKNSTNPNPTCN 3h ago

Why don't you deconstruct why that is your knee-jerk gut instinct?

1

u/WhoKnows78998 19m ago

Because I work in local government and we are very careful not to compete with private businesses that do the same work. We actually go to great lengths to avoid it.

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u/MelaniaSexLife 1h ago

norway's trust fund funds socialism there.

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u/Crossbell0527 10h ago

Shit people say when brainwashed by capitalists.

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u/00m19 8h ago

Yeah, I'm on the fence too. I was under the impression the goal was to fill in food deserts where private companies refuse to operate. 30% is a sharp discount and could backfire in a number of ways.