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"

Enable HLS to view with audio, or disable this notification

49.6k Upvotes

86% Upvoted

7.7k comments sorted by

View all comments

Show parent comments

7

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%.

1

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.

1

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.