I & I Editorial BoardNew York Mayor Zohran Mamdani’s socialist dream of government-run grocery stores is off to a bad start. He’s issued confusing statements about whether shoppers will have to show proof of residency to shop there, admitted that he will have private grocery companies — not the city — run the stores, and said the stores won’t all be open until 2029.
But Mamdani is likely to face an even bigger problem if no legitimate grocer wants to get into bed with him.
The “request for proposals” tacitly admits that his idea of government-run stores was stillborn, since he wants bids from private companies that have extensive experience running grocery stores, that have “existing supply chains,” and will “leverage an in-house merchandising organization.”
The RFP says the city aims at “reducing prices in ways the private market alone cannot.” But it does so entirely through taxpayer subsidies. Companies running the stores won’t have to cover the cost of construction, pay rent and taxes, and can tap into taxpayer-funded “affordability payments” to cover a store’s losses. Who couldn’t reduce prices with those perks?
So what’s the city’s role, other than heavily subsidizing existing private grocery companies?
Ah, there’s the rub. Because in exchange for those subsidies, any company that signs up will become a ward of the city.
According to the RFP, to win a contract, companies must not only be in the grocery business already, but meet requirements such as:
- Have “strong reputations within their communities for delivering on public policy priorities of health, sustainability, community involvement, culturally responsive merchandising, and local and diverse sourcing.”
- Show how they will “engage local suppliers, small businesses and suppliers meeting high sustainability, labor, and health standards.”
- Figure out how to, “in a fair and equitable manner,” prevent customers from emptying the shelves of the “core” goods being sold at 30% below market prices.
- Work only with subcontractors who will “work with NYCEDC (New York City Economic Development Corporation) to establish appropriate [minority and women-owned business] participation goals and make good faith efforts to achieve them.”
- “Collaborate with NYCEDC to finalize the expected wages, benefit packages, labor practices and working conditions.”
- “Demonstrate experience maintaining labor peace.”
- Get approval from the city to open a store in a privately owned site, including “alignment with the Project’s affordability and operational requirements.”
- “Regularly report” to the city about how it’s complying with all the above.
In other words, the city will tell them what they can and can’t sell and at what prices, how much they must pay workers, who they can do business with and where, and kowtow to the city’s socialist “public policy priorities.” And the city will presumably be able to yank a company’s license whenever it sees fit.
In a series of posts on X, Nick Kokonas, who co-owns Tangle Ranch Vineyards in California, was amazed at some of the other requirements in the RFP.
Among them:
“The RFP says stores won’t have deli counters or on-site food prep. Then its Core Basket includes chicken salad, egg salad, potato salad, fruit salad and other deli-prepared foods. So, a deli w/o a deli. Oh … you’re going to ship them in every day prepared. Gotcha …”
“The ‘best’ bid promises 30% discounts, best-in-class wages/benefits, local sourcing, sustainability, community programs and full-time jobs. Then 20% of the score goes to whoever claims they need the least subsidy. Lowballing is the strategy … and then cost overruns are guaranteed.”
“The stores must use a ‘limited SKU’ model,'” which is used by stores selling a small number of different products. But “they must also carry full grocery departments, household goods, culturally specific products, plus kosher, halal, vegan, gluten-free, dairy-free and diabetic options. Pick one.”
Kokonas ends by asking, “Why would they *want* to build crappy grocery stores that have conflicting goals and will be mismanaged? Because either that’s the goal … or else they have no idea how to actually craft an RFP or run a business.”
Our question is, what is Mamdani’s plan if no above-board private company is dumb enough to accept these terms?
— Written by the I&I Editorial Board
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