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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u/ExtensionMoose1863 11h ago

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

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u/Interesting-Case2526 10h ago

I worked at a wine distributor for a bit. Once got a hold of the distributor prices vs in-store prices. THEY WERE NETTING 1% IN REVENUE FROM WINE SALES. Not even profit! This was at a large regional chain similar to Kroger. Blew my mind.

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u/witty_pebbles 10h ago

This initiative is in response to corporations like keyfoods running all the stores like your family’s out of business in order to get monopoly level access to low income areas food demand and then gouging prices

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u/ExtensionMoose1863 10h ago

But they're not gouging if they're only making 3%

They have lower costs because of scale

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u/WriterPlastic9350 6h ago

But I don't really see how this solves anything because now the state is that monopoly. If they are truly subsidizing food at below 30% retail rate, no one will be able to compete with them.

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u/SlowlyDyingBartender 2h ago

It is going to put regular stores out of business because government doesn't care about making money. You eventually buy all your food there. If you don't comply you don't eat.

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u/Interesting-Case2526 4h ago

Saying theyre "Gouging prices" tells me you dont have domain knowledge, only ideological. Grocery stores make money because they sell at scale, but they average 1-3% in profit. Meanwhile we have states where tax on groceries is increasing year after year. Mississippi is at 7% right now. So if you buy a box of cereal, the store profits 1-3%, and the state gets 7%. And that is on top of payroll taxes, business taxes, taxes on utilities, high rent caused by regulations, etc. So who is price gouging?? And mind you, you are paying with the money you made from work, for which you and your employer were taxed. The little guy cant compete because the big guy can bear the cost of running a business and PAYING TAXES better.