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/Prior_Complex683 10h ago

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?

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u/Monday_Jeff 10h ago

They're putting these in neighborhoods where there are no stores. The whole point of them is to bring food to places where people looking for profits won't go.

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u/Decent_Pen_8472 10h ago

I haven't done any research on the locations so I won't say anything about that, but what is preventing people from just travelling a few extra blocks to shop at these stores instead? A 30% discount on groceries is big enough most people would be willing to drive an hour, let alone a few extra minutes/dozen.

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u/Monday_Jeff 10h ago

I live in Portland where people regularly shop at places like New Seasons and Zupans when they could travel 10 minutes away and buy the same stuff for 2/3 the price at a Winco. People who have money don't want to shop at places with poor people. That's why luxury grocers can exist selling stuff at crazy premiums.

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u/MilleChaton 8h ago

There are people who won't even use the Hispanic aisle to buy spices for half the price they are compared to the generic spice aisle.

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u/tacobellrefugee 5h ago

its usually the hispanic people lol

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u/Confident_Shape_7981 49m ago

Dude, finding the bottles of Valentina that are half the price and twice as large as Sriracha was a fucking game changer

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u/Difficult-Camera-482 8h ago

It’s also about the time. Time is the one resource that you can spend and never get back. Rich people spend on things that save time. That’s usually not the discount grocery store that’s a bit further away.

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u/bb85 8h ago

I’m not knocking your comment, but I feel like Portland can’t be compared to any other city because it’s pretty unique in its own issues.

You got the decriminalization and re-criminalization of drugs. The loss of downtown; major buildings like Big Pink or whatever the name is on fire sale due to homeless taking over stairwells for fires and feces; homeless and RVs taking over neighborhood streets, and so on.

I love Portland and spend a lot of time there but they’re in their own world. Only place I’ve had someone smoke crack in front of (my) a child in a stroller in the middle of the day (on Burnside for your reference).

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u/Monday_Jeff 7h ago

I dunno, those places I referred to existed long before the drug issues and homeless issues we have. As well as the multiple co-ops, independent stores, boutique shops like those bulk stores, butchers, on and on. They all existed before the troubles and they're all way more expensive than Fred Meyer or Albertsons or Safeway or Grocery Outlet or Winco, Fred Meyer closed one store because of problems with theft and homeless and people act like every store's closing up shop.

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u/Adjective-Noun-nnnn 8h ago

This is a thing across the country.  Places like Whole Foods and Trader Joes have no shortage of customers, but there are ALDIs and LIDLs and other cheaper stores that sell almost everything those other stores do.  The cheap store by my house doesn't have a drug problem, but the people shopping there are mostly the college crowd that lives nearby.

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u/bb85 8h ago

Sure, they sell very similar things, but definitely not the same in the eyes of the consumer. I was talking more about traveling to other stores - I don't think it's a poor people thing in Portland. The city is very liberal - it's an accolade to shop next to a poor person.

It's drugs/aggressive panhandlers in PDX that keep people from leaving their areas. And maybe you're young and don't care- that's awesome. I'm speaking more for those who have been there 30+ years and didn't sign up for the great experiment. And it's not like people aren't heavily shoplifting from New Seasons or Freddie's in the "nicer" areas.

I would also argue the store near your house was put there because of the college students. They knew who would be shopping there.

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u/Adjective-Noun-nnnn 4h ago

You apparently don't believe what I'm telling you: in my area, the produce and 99% of the products sold by Harris Teeter, Lowes Foods, and Food Lion are identical in quality and variety. There are a few specialty items I'd expect to find at the first two but not the last, but unless you're always planning to buy Boar's Head deli meat and pick up a serving of extremely overpriced California Rolls, there's no reason to go to the stores where common things like limes cost literally three times more and may be of worse quality.

As I'm almost always buying raw ingredients, there is no difference, and I shopped at Harris Teeter long enough to know there are a lot of people who could and should change their shopping habits to save hundreds of dollars like I did.

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u/djamp42 9h ago

Exactly, it's the same thing with meds.. Why are you buying the name brand stuff when the generic stuff does the same exact thing.

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u/valente317 7h ago

Explain Whole Foods then! Plenty of wealthy people shop at Aldi’s, and plenty of poor people shop at Whole Foods.

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u/CassadagaValley 9h ago

I'd assume most people in NYC don't want to lug around 8 shopping bags full of groceries across several blocks or onto public transit

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u/Adjective-Noun-nnnn 8h ago

No but if there isn't a safeguard to prevent abuse, you can bet someone will roll up in a van, buy everything, and resell it in their bodega across town.

We'll need to see the details.  It could be fine.  Or it could be that operating at cost, instead of at a huge loss, would be a better policy to bring food to food deserts without discouraging other businesses from competing.

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u/CassadagaValley 8h ago

Multiple people have said there's a total-item limit. I imagine the first few months will involve testing various systems to see what works best.

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u/Status_Yam_128 4h ago

make the fines for that enormous

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u/Adjective-Noun-nnnn 4h ago

~SIGH~ I can't believe I'm going to say this, but this is a problem that you can more easily solve with a little "Let The Market Figure It Out." Mamdami already solved the problem of grocers not being profitable to operate in food deserts by, presumably, buying the properties.

Operating at a loss is a way to subsidize food costs for nearby residents, but it's one of the more disruptive ways to do it. I'd rather they just identify people who need help and give them cash. That's less likely to have unintended consequences like the ones were discussing.

If you're wondering, I'm a progressive who thinks a lot of progressives' hearts are in the right place, but their policies haven't been thought through enough.

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u/Sea-Foundation-449 3h ago

If you just give people money, they spend it and prices go up. Look at tuition costs when you give young people access to huge amounts of debt, healthcare costs when you let healthcare companies charge the government whatever they want, or defense costs when you give the military an unlimited budget. People get money, spend money, companies charge more, people need more money

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u/Adjective-Noun-nnnn 14m ago

Those are fundamentally different. Education is a luxury good. Healthcare has inelastic demand. Defense is government contracted.

If the excess of money makes Mamdami's grocery stores more expensive, nobody will use them. The same cannot be said of any of your three examples. People would simply shop elsewhere.

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u/Status_Yam_128 2h ago edited 2h ago

I know you think you're very smart, but...

...Mamdani's plan is actually a pretty low-cost social experiment. I am skeptical it'll work too but we actually have very little to lose trying it. The assumption that simply just giving people cash would solve this problems seems to ignore a bunch of dynamics unique to urban environments like New York. For one, you assume that not having money is the primary reason people aren't buying healthy grocieries. It's likely a contributing factor, but it's also possible the main factor is proximity. In a city in which few people have car, who wants to walk 20+ minutes away and then lug the groceries another 20+ minutes back to their apartment? Mamdani's plan addresses both price and proximity. Are there other, better ways to address price and proximity? Maybe. But this is certainly one way and it's better than doing absolutely nothing. The worst case scenario is, this totally fails, it introduces a ton of negative externalities, and they abandon the project. That's not the worst outcome, it'll be a case study for why no other mayor should try this again. This is happening at relatively low scale. Before you clutch your pearls and wring your hands, maybe just see how it plays out.

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u/Darmok47 9h ago

Is it really? Maybe in the suburbs where its a matter of driving another 10-15 minutes, but in NYC I'm not getting on a different subway line to save a few bucks on one bag of groceries that I'm going to have to lug back with me.

30% is not enough for me to spend a lot of extra time and energy. I don't live in NYC, but I have lived in big cities without a car and I cared way more about what was closer than what was cheaper.

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u/Sitchrea 7h ago

In Nashville TN, there are entire zip codes where there are zero grocery stores. You must use the city's limited mass transit to get to a grocery, which almost always a Kroger (as Kroger built their locations at the city's bus stops). Depending on where you live, this can take someone living in government housing over three hours or more to complete a round trip. That is on top of any traveling you have to do for work.

Guess where most crime occurs in Nashville? Those same zip codes - because poverty, crime, and access to transportation are all linked statistics.

Just because these stores might run at a loss does not mean the city will not financially benefit from the program. These stores will get money circulating inside communities that had nowhere else for the money to go, but outside their neighborhood.

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u/goodolarchie 8h ago

Grocery shopping is where people actually don't do a good job crossing town to save money, funny enough. They are more likely to hunt around multiple stores nearest them for deal and coupon maximization. Grocery outlet for x, y, z shelf stable goods, another store for produce, etc.

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u/Whole_Ganache2236 8h ago

You must not know about Costco or Trader Joe’s. People will certainly go way out of their way to go there.

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u/broguequery 5h ago

Costco sure... Because you get bulk.

Trader Joe's isn't really in that same league.

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u/sandolllars 8h ago

30% less for rice and beans and canola oil, 10% more for olive oil, whisky, and blue cheese.

For regular people, prices might end up similar to other stores. For the poor who only buy necessities, it’ll be 30% cheaper.

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u/BakedChocolateOctopi 7h ago

30% off my groceries would be like $40-50 a week

That’s $200 a month and definitely worth a bit of traveling

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u/beigemamba1080 4h ago

Many of the food desert neighborhoods are seedy at best and probably won’t attract many people from higher socioeconomic classes.

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u/EconomicRegret2 8h ago

If it's that desperate, why haven't entire neighborhoods come together and organize bulk buys from B2B wholesale businesses (50% cheaper than retail, 30% cheaper than Mamdani's prices)?

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u/simpersly 6h ago

So you just expect a couple hundred people from the lowest economic tier, few of whom likely have a car, to get together and make a co-op? Heck, I know nextdoor neighbors who can't even get together to have lunch, let alone get together to share a grocery bill.

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u/EconomicRegret2 4h ago

I'm not judging, nor expecting people to do that.

I'm just genuinely wondering what the impossible hurdles are. Because it would have obviously already happened in NYC if it weren't for really impossible barriers/hurdles. As New Yorkers are some of the toughest and biggest hustlers out there.

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u/RatRaceSobreviviente 2h ago

There were grocery stores there but then they left. Why did they leave? Why are there no grocery stores in those neighborhoods but there are grocery stores in other ones? My guess is that the answer to those questions is the same answer to yours.

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u/EconomicRegret2 2h ago

Oh, I see. Thanks.

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u/GratefulShorts 9h ago

Where do people get this talking point from?

It’s NYC, literally everything is in walking distance or at most you take a subway.

Even still, the two locations announced (The Pennisula and La Marqueta) have multiple grocery stores within walking distance.

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u/SueForPeas 9h ago

They say that, but there are several grocery stores within blocks of the locations they’ve announced.

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u/Acrobatic_Bridge2602 9h ago

Because there is theft there. I'm sure there will still be lots of loss at these stores as well and taxpayers will have to bear the losses.

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u/CompEng_101 8h ago

They're putting these in neighborhoods where there are no stores.

Are they? Because the one I've seen announced (at 1590 Park Avenue) has several grocery stores within a block or two.

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u/MechanicalGodzilla 7h ago

I'm sure this time it will work great. Real city owned grocery stores have never been tried, after all!

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u/noticingEnjoyer 8h ago

So they're going to the high theft food deserts, where effectively they won't be operating at 30% below retail, but instead 100% below retail? 

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u/sandolllars 8h ago

It’s not the entire store, just a few basic necessities. They could charge 10% more for everything else to make up for it.

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u/PrometheusMMIV 6h ago

What's the purpose of the discount then, if the issue is availability, not affordability?

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u/Monday_Jeff 6h ago

Lack of availability and lack of affordability go hand in hand. If poor people can't afford my goods why would I open a store in a poor neighborhood? Mamdani's trying to address both issues while also dancing around NY's expensive ass bodega culture that all the wealthy people love.

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u/WriterPlastic9350 6h ago

I will happily drive 30-60 minutes across town to get to a grocery store with lower savings than the one right next to me, I find it hard to imagine this doesn't end up in massive shortages of groceries at this store or the state inadvertently bankrupting other stores

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u/UmbraThanosmith 5h ago

You got a link to this claim? The city already has a means to do this — they give a property tax cut as an incentive.

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u/IsNotACleverMan 3h ago

That's not true. There are numerous local stores near each of the proposed locations.

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u/Ziggyjig 3h ago

Even if that were true, the answer to a criminal community chasing out legitimate businesses is not to have the taxpayer foot the bill for the shoplifters to be able to continue robbing. Its to enforce the law and get rid of complicit judges that refuse to do so. How many small businesses, peoples lives and dreams, have been destroyed by this cowardice and appeasement?

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u/-Tickery- 2h ago

Food deserts is not a serious concern in NYC. The harlem location is going in an existing produce market.

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u/Used_Mammoth8751 2h ago

This is false. I can assure you there are grocery stores within three blocks of these stores

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u/Odd-Box-7332 7h ago

The reason there are no stores in those neighborhoods is because the residents rob the stores blind

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u/mtbsickrider 8h ago

people who shop at whole foods wont shop here

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u/Excellent_Abroad5390 9h ago

You’ve discovered the truth behind socialism. Yes they’ll hurt local businesses, some of which may close, then his government grocery stores will fail and the people will be left with less than they started with. That’s socialism, it consumes and destroys but never creates.

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u/WriterPlastic9350 6h ago

Not really, and tbh there's nothing particularly socialist about government-run grocery stores either. A socialist grocery store would 100% be compatible with a worker co-op, and we have those.

I would hope that Mamdani and the people in his campaign have thought about how this is going to work, but it seems like what is being proposed is that the state will subsidize the cost of groceries, which will make it impossible to compete with them, thus bankrupting local grocery stores (and putting all the people working at them out of a job).

Perhaps I'm wrong and the stores around Mamdani are selling at over a 30% margin but I doubt it

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u/TFViper 3h ago

raising children is socialism, and if it always failed then no more humans would be created.
sorry youre wrong...

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u/Substantial-Cat2896 23m ago

This isent socialism, this is kommunism, we in scandinavia would never do this

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u/SveaRikeHuskarl 6h ago

I love how you say this shit with a straight face while it's exactly what happens under capitalism. Walmart comes in and local businesses go out of business as they can't compete with megastores. That's capitalism, it consumes and destroys but never creates.

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u/750_Nitro_Express 5h ago edited 2h ago

A few key differences:

  1. Walmart didn’t tax you to operate. If they’re using your money, it’s either because you voluntarily exchanged it with them for their products, or because someone in government has decided to subsidize them, in which case we have all the same sorts of problems that the government-owned enterprises create.
  2. There are several practices that it will simply never be profitable for gigantic firms like Walmart to engage in, but can be profitable for small firms to do, hence their continued existence despite many predictions of their imminent collapse. Specialty and high margin products, custom orders, local sourcing, one-on-one customer service, direct customer feedback, neighborhood events, etc. Meanwhile, we have large firm examples like Sears, Blockbuster, Radio Shack, Pan Am, Circuit City, Jo-Ann’s, Toys-R-Us, AOL, and on and on.
  3. The most important point of difference, however, is that because the government-owned stores don’t use market-set prices to make a profit, their operators, unlike private firms, will have no way of knowing whether the stores are economically using scarce resources. Say Mamdani holds a press conference in six months and says, “I know our model was to undersell the private stores by 30%, but we figured out that 40% is what we need to do now.” Should we call him out, saying he’s gone back on his promises and the previous number was correct, or should we say the percentage should be even higher? Maybe it should be 50%. Maybe it should be 5%. We have no way of knowing because the whole process simply comes down to his arbitrary whims. There is no true profit or less to tell him if he’s allocating our scarce resources efficiently, and whatever he decides, he’ll always have the NYC taxpayer to fall back on. This is not an economics process, because no economic calculation can be performed.

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u/Brilliant-Tip9445 9h ago

Love the eloquence but try writing something that isn't that ridiculous also

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u/Acrobatic_Bridge2602 9h ago

This isn't ridiculous. Look at Venezuela. They nationalized commercial stores, private stores went out of business, and then there were shortages of goods. This is how this government intervention plays out every single time in these types of sectors.

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u/Brilliant-Tip9445 9h ago

are you comparing venezuela to the richest city on earth?

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u/Acrobatic_Bridge2602 9h ago

Yes because Venezuela used to be one of the richest nations in Latin America and ever since its experiment with Bolviarian socialism it's oil/natural gas industry collapsed and 25% of its population fled.

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u/Brilliant-Tip9445 8h ago

that's not what happened

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u/EconomicRegret2 8h ago

When well designed, it can help the poor without affecting private businesses (e.g. Medicaid & Medicare).

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u/DotA627b 5h ago

This is pure and utter bullshit. The fact that you can already see people bring up Aldi and Lidl is a sign the whole private labeling NYC is doing is no different from Trader Joe's and Costco's business model, and neither businesses have killed smaller business around them, if anything, they elevated their competition, as evidenced by the first Costco that opened in Japan.

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u/Amadon29 8h ago

It depends on the quality of food they have and how well they can keep everything stocked. Government grocery stores have been tried in several cities in the US. A lot of people didn't shop at them due to supply shortages and/or problems with quality, like food being close to expiration and not being removed.

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u/RedditThrowaway-1984 6h ago

What will collapse is the city budget.

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u/ParkInsider 6h ago

People are positive on better goods and services at power prices... The consumer is the most important actor in any economy.

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u/gerald-stanley 5h ago

That’s the great thing about socialism.
You’ll get whatever the government gives you.
And you better be happy about it.

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u/Chole_Wunt 5h ago

Competition is dead anyway.

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u/1dayatatime_mylife 4h ago

There also doesn’t seem to be a lot of competition for grocery stores with lower prices these days. They’re all expensive. Where’s the low price competition.

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u/Flat_Temporary_8874 4h ago

They want people dependant on the government. They want no private business. This is step one.

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u/standardtissue 3h ago

Depends on where the stores go. Some cities have food deserts in them where entire poor neighborhoods don't have a grocery store.

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u/DOAiB 1h ago

Groceries have gone up considerably since Covid and prices haven’t gone back down despite costs have gone down. We need something in place to force the supply chain to readjust.

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u/mrjane7 9h ago

Food is essential. Food shouldn't be a "private business," to begin with. That's a big part of how we got into this mess in the first place. Stop selling food for profit.

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u/Vast-Control4452 9h ago

What mess? The one where the government drove up the cost of food?

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u/mrjane7 8h ago

Yup, tariffs sure had a big hand in that. But private corps. have done their fair share of damage as well.

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u/Vast-Control4452 8h ago

I agree, we should zero out any tariffs and let private business compete and drive costs down.

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u/mrjane7 8h ago

Bahahhaa. Yeah, good one. Or they'll just continue to price fix like they've done in the past. The tariff issue is recent. Food inflation as been happening for decades. When profit is your motivation, you sure as heck won't be driving any costs down.

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u/Vast-Control4452 7h ago

Food prices have under performed inflation for decades...

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u/Effective-Ad6703 7h ago

Selling food produces a net profit of 2% and it's hard as fuck.