Late last month, state Assemblyman Zohran Mamdani won the Democratic primary election for New York City mayor. Endorsed by the Democratic Socialists of America, Mamdani proposed several government-run policies aimed at increasing affordability for working-class New Yorkers. For example, to combat the problem of rising food costs, Mamdani plans to open five city-owned and managed grocery stores, one in each of the five New York boroughs.  

Mamdani’s scheme is a concoction of misunderstood economic premises and reckless policy prescriptions. It is an enduring fact of history that state-owned businesses rarely perform as well as politicians promise. And although the insurgent Democratic nominee has identified an obvious problem facing the city, he doesn’t understand its true causes.  

An April 2025 study from the New York State Comptroller states that in 2022–2023, food costs were on average the fourth largest source of household spending, reporting that the cost of food at home in the New York City Metropolitan Area increased by 27.5% between fiscal year 2019 and FY 2023. Mamdani blames profiteering and market failure for the rising food costs and therefore seeks to solve the problem through government entry into the market. According to Mamdani, the mission of these city-run grocery stores would be “lower[ing] prices, not price gouging.”  

Contrary to Mamdani’s accusations of corporate greed, data show that private grocery stores’ margins are already very slim, averaging 1% to 2%. New York’s grocery business has been, historically, a competitive market because chain and local grocery stores must compete with bodegas, delis, and dollar stores. 

Since the grocery business is operating within such slim profit margins, Mamdani’s plan to reduce the profit motive is not likely to decrease food prices among non-city-run establishments. An article in City Journal points out that socialized grocery stores simply overlook the real factors affecting New Yorkers’ food supply:

“Opening municipal groceries would not address the underlying forces driving grocery store closures in parts of the city — namely, crime and poverty.”

That is, Mamdani seeks to bypass the basic tasks of municipal governance in favor of a far more extreme and ill-considered policy: the government entering the market as a competitor to private industry. He proposes ignoring the real problem, not solving it. 

Mamdani’s plan is not novel. Chicago conducted a feasibility study for opening government-owned grocery stores in 2023, but the city has not pursued the initiative. Even when these enterprises become a reality, they are unable to compete with private businesses and ultimately become a drain on taxpayer resources. One example is Kansas’ Erie Market, which relies on donations and volunteer support to operate and still suffers huge losses every year. Cities lack expertise in running retail stores — not to mention the knowledge gained through long years working in the industry. Also, cities do not feel the ordinary pressures of the market, condemning government-run stores to mismanagement. 

Small businesses owners in New York are skeptical of Mamdani’s proposal. Unfair competition from government-subsidized stores could distort food prices and drive locals out of business. This would reduce consumer choice, increase reliance on government services, and harm taxpayers as city-owned enterprises flounder. Large chains are likely to have the disposable resources to endure this interference, but many small-business owners will likely suffer greatly or shutter their operations altogether. 

Although Mamdani’s plan identifies rising food prices as a major problem for New Yorkers, it fails to address the true causes of grocery store closures and rising food prices. This proposal exposes his ignorance of the city’s grocery industry and a naive belief that command-and-control solutions can solve complex market problems. New York voters would be wise to recognize that flashy policies which ignore market incentives don’t hold up in practice and waste taxpayer money in the process.  

Lillian Kriese writes for the Taxpayers Protection Alliance.