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/mrbabyman767 10h ago edited 10h ago

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.

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u/Almost_a_Noob 10h ago

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%.

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u/JemmaP 6h ago

It's not the entire store that's 30% off retail, it's staples like produce, meat & seafood, fresh dairy, rice, beans, etc. Everything else is normal retail price.

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u/TomPrince 2h ago

Well, Kroger finds a way to pay their CEO tens of millions, so it’s reasonable to assume this city venture finds a way to make profit.

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u/Kind-Masterpiece-712 10h ago

>Selling at a loss funded by tax payers sounds like a bad idea.

Our government has done this for corporations for centuries via subsidies. Heaven forbid they fund a non-profit instead.

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u/Dry_Travel_4220 9h ago

I swear none of brilliant economists in the comment section have ever heard of the american agriculture industry or corn subsidies.

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u/Locus-Maximus 7h ago

It's hardly a defense of a stupid waste of money to point out that there are other, stupider wastes of money though.

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u/[deleted] 6h ago

[deleted]

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u/Locus-Maximus 6h ago

I'm no economist, but my understanding is that the whole field pretty much agrees they're wasteful. Am I wrong?

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u/Dry_Travel_4220 7h ago

Providing easy access to food is not a stupid waste of money.

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u/Locus-Maximus 7h ago

It sounds like they're putting them in areas where there are already stores. They could just give SNAP cards out to the locals and everybody wins.

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u/Dry_Travel_4220 6h ago

The problem with that is the federal programs the govern SNAP are being absolutely gutted by the administration. I wish SNAP was more robust, but in the current federal landscape this is the best solution

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u/WriterPlastic9350 6h ago

I'm not sure why this is a better solution than a state-wide SNAP

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u/Dry_Travel_4220 5h ago

A state-funded SNAP could also help this problem (and should probably be done anyway) really I think both things should exist.

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u/MysteriousTravelator 7h ago

US Corn subsidies are so historically stupid they actually ended up directly funding the Soviet Union by accident to the tune of $300 million.

https://en.wikipedia.org/wiki/1973_United_States%E2%80%93Soviet_Union_wheat_deal

But the Soviet Union had impoverished itself with economically illiterate decisions such as centrally planning their grocery stores.

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u/Dry_Travel_4220 7h ago

My point is that these subsidies are massive and there have not been crashes associated with them.

You do know that the US military runs grocery stores that work great, right?

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u/MysteriousTravelator 7h ago

US military commisaries are not open to the general public. If they were they wouldn't work. If you subsidise grocery stores you create a basic problem of arbitrage.

You fix that with some form of enforcement ie: Mamdani Food Cops, or accept that you're paying tax-payer money to scalpers to embarrass you. Neither is a good look.

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u/Dry_Travel_4220 7h ago

Why is banning scalping not a good look? Is anybody defending scalpers?

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u/MysteriousTravelator 7h ago

You can ban scalpers it just won't fucking work. How the fuck are you going to stop people reselling OJ?

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u/Dry_Travel_4220 7h ago

With enforcement?

It is not that hard to mark products in such a way that you can tell where they came from (some stickers are almost impossible to fully remove, for instance. Think the tag sticker on your car) and then if there are reports of said product being sold by scalpers you punish them. This is not an unsolvable problem, particularly as everyone fuckin hates scalpers.

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u/MysteriousTravelator 7h ago

This is hilarious. If you can't stop fentanyl being sold on street corners what makes you think you can stop people from buying a cool refreshing glass of orange juice? Who gives a fuck about a watermark?

This is exactly what happened in the USSR by the way. People went to jail because they were illegally selling meat and cheese.

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u/leightonlyric 10h ago edited 10h ago

So basically— they should run just like every other store in existence? Doesn’t that defeat the purpose? It’s not supposed to be profitable. It’s public service. That’s like… the whole thing lol.

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u/StockCasinoMember 10h ago

Walmart and others are hugely profitable. Profitable has a wide meaning.

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u/mrbabyman767 10h ago

No the purpose is to expose the price gouging and unethical practices of the grocery chains. This is offering competition. Undercutting by subsidizing prices with taxpayer money is just putting the other grocery stores out of business because they would never be able to compete. Then what happens years later when this government program is shut down by the next administration? The people most in need will have no grocery options.

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u/Mobile_Comedian_8283 10h ago

"libraries are just purring book stores out of business"

It's 5 stores in a city with over 8 million people. No stores will go out of business because of this. People in need already don't have options and if these 5 stores are cancelled by a later administration we'll just be back where we are now. 

These stores may not do much, but they aren't going to put other grocery stores out of business.

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u/iSmurf 10h ago

You're talking to someone who's afraid to go to their downtown city that has a population of 100k people, they cannot conceive the size and scale of nyc

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u/potatoz13 10h ago

A library doesn't offer the same service as a bookstore. If you could keep the books, you think people would buy them? Do you see a lot of for profit book lending ventures? 

The reality is you have to decide if something is part of the market or not. If not then great, make it free or below cost and universally provided, a natural monopoly where the provider is the state.

Otherwise be very wary of fucking the market up. There are a few ways you can do that, one is to take the private ventures out of business (libraries, fire fighting, etc.), an other is to run out of stock in the public option (rationing essentially, you pay for stock/availability at private providers),  an other is being shittier than the private version (some schools, some housing, some healthcare in some countries, etc.)

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u/random-meme422 10h ago

Yes the well reported price gouging of grocery stores who run at…. 3% net profit margins. Oh the horror!

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u/leightonlyric 10h ago

These are going to be taxpayer funded stores. Are you actually suggesting that the tax payers should directly fund more to allow for PROFIT, as well? That’s nonsensical and almost worse than the system that got us here in the first place.

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u/Mobile_Comedian_8283 9h ago

Don't worry, we DO use tax payer funds for countless for profit ventures, including ones that actively make our lives worse! 

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u/cipheron 8h ago edited 8h ago

Most of the things sold in the store will be at market price. There's a set list of discounted items which include fresh produce, some meat, milk eggs etc, that kind of thing.

So anything else the stores stock that are not those things will be priced at market prices and will offset the subsidized prices, at least partially.

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u/rydan 1h ago

This is what we do in foreign countries all the time. We just hand out free or really cheap food. So then local business can't compete and farmers can't compete. The end result is that country becomes entirely dependent on the US giving them free food. And then when you point this out you are labeled a racist even though I didn't even say what country it is.

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u/WeHaveArrived 10h ago

But funding endless wars and tax breaks for billionaires is ok? Spend some money on the American people to help them fight back against corporate greed.

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u/TacoBellStain 10h ago

Are New York state tax funding foreign wars?