The Fantasyland Of New York City's Discount Grocery Stores

Manhattan Contrarian ^ | 9 Aug, 2026 | Francis Menton

[MtnClimber]

If you have paid attention at all to New York’s idiotic new Mayor Zohran Mamdani, you probably know that one of his big promises is to open a chain of City-owned grocery stores. These stores, supposedly, will solve the problem of “affordability” of groceries by offering a basket of standard items at prices some 30% below what the other stores charge.

Now I recognize that there has been some substantial inflation in the food sector of the economy in the past few years. In some cases, and for some families, the price increases have been unpleasant or even difficult. However, I submit that there is no way to look at the American food supply and delivery system without seeing it as something close to a miracle for human flourishing.

According to the Department of Agriculture’s Economic Research Service, the share of disposable personal income spent on food by U.S. consumers in 2025 was 9.7%. And about half of that was spend “away from home,” that is, in restaurants. That leaves less than 5% of disposable personal income as the average cost of feeding a family at home. This has to be an all time record in human history. Also, according to USDA data, the “at home” cost has continued its long term decline as a portion of personal income over the past several decades, going from about 6% in 1997 to under 5% in 2025. Here is USDA’s chart covering the period 1997 - 2025:

For comparison, in the European Union, average household food expenditure as a percent of disposable income is around 14% (with richer countries like Germany and the Netherlands around 10% and poorer countries like Romania at well over 20%); and in really poor areas like sub-Saharan Africa, average food expenditures can be 40% of income or even more.

But even though our food prices are the lowest (as a proportion of income) anywhere in the world, and the lowest at any time in human history, Mamdani and his crowd have the idea that these prices are unduly high because nefarious capitalist actors somewhere in the supply chains are siphoning off outrageous profits. Therefore, he and his friends — none of whom has ever actually held a job in this industry — can order up new stores to offer the same products at large discounts.

On August 5, New York’s Economic Development Corporation — apparently the agency tasked with conjuring up the discount grocery stores — held an online forum to answer questions on the plan. The New York Post reported on the event in a piece on August 6 with the headline “Mam’s Store Plan Is Bananas.” In the Post’s telling (which is likely correct), the EDC has no idea what it is doing in going into the grocery store business:

An Eco­nomic Devel­op­ment Cor­por­a­tion offi­cial, dur­ing an online info ses­sion, was forced to admit to pro­spect­ive part­ners that the city had yet to fig­ure out simple logist­ics, includ­ing how to reim­burse oper­at­ors or pay store employ­ees. The EDC offi­cial even con­fessed the city didn’t know how it would cal­cu­late the cost of the super­mar­kets’ sig­na­ture “core bas­ket” of essen­tial goods, which Mayor Mam­dani has said would be sold at 30% “below typ­ical retail prices.” “The city does not have the expert­ise or exper­i­ence in run­ning stores, and so we’re look­ing to start to identify oper­at­ors to integ­rate with us,” said Jamie Hor­ton, vice pres­id­ent of stra­tegic ini­ti­at­ives and busi­ness oper­a­tions for EDC, a quasi-pub­lic non­profit fun­ded by the city. Hor­ton fielded ques­tions from about a dozen attendees dur­ing the 45-minute Zoom call about the EDC’s 44-page “request for pro­pos­als” seek­ing bids from pro­spect­ive oper­at­ors to run the shops, which are estim­ated to cost $70 mil­lion to build out.

It would be a huge understatement to say that these goo-goos haven’t thought their plan through. Of course the biggest question is, what’s to keep the first customer into the store from buying up all the discount merchandise to re-sell for his own profit? That would leave the store empty — the condition of essentially all grocery stores in all socialists systems at all times. On August 6 daughter Jane posted a video asking the question “Can we REALLY expect people to ‘take only what they need’”?

Way back in August 2016 — ten years ago — I had my own post on this subject, titled “Why Capitalism Works And Socialism Doesn’t: Arbitrage.” Excerpt:

If you can buy something cheaply and immediately turn around and sell it for more, chances are you will do it. Why shouldn't you? Is there something wrong with that? This is completely normal and pervasive human behavior. This behavior is also a source of a very large percentage of the wealth in wealthy countries where such behavior is permitted. It is also the reason why, in market economies, comparable things almost always trade for very comparable prices. But of course, in a world of socialism -- that is, where a government attempts to create perfect fairness and justice by means of coercive distribution -- arbitrage poses a mortal threat.

It will be more than a year before any of Mayor Mamdani’s grocery stores actually open. (They are currently projecting the end of 2027, and a good bet is that they will not make that deadline.) But it’s easy to predict that things will not go as they plan. The options are limited: (1) allow anyone to buy as much as they want, in which case enterprising arbitrageurs will quickly buy all the discounted goods and greater and greater subsidies will be needed to keep the stores stocked, with essentially all the subsidies ending up in the pockets of the arbitrageurs and few if any discounted groceries available for the intended beneficiaries; or (2) immediately impose tight rationing (one dozen eggs per customer!), only to watch clever arbitrageurs quickly find ways to get around the rules, or (3) have perpetually empty store shelves, like all other socialist grocery store efforts of the past. I don’t know which it will be (or perhaps some combination), but there aren’t really any other options. Reality is harsh.

UPDATE, August 10: Here is a comment that was posted at Jane’s site by a commenter going by the name of mkoanue: “They say nothing of the fascism and authoritarianism... Oh but someone wants to offer people cheap food and it gets them upset? These people are truly demons doing the work of their overlord.”

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TOPICS: Society
KEYWORDS: leftism

[kaktuskid]

Wonder why Aldi doesn’t build stores in NYC. Or Dollar General.

[Repealthe17thAmendment]

When you understand that the Democrat Socialists are not concerned about the economics of things, but only the control of industries, everything they do makes sense.

[jmcenanly]

This whole Mandami regime is starting to sound like an Ayn Rand screaming nightmare.

[motor_racer]

And I’m sure it will be Halal only.

[bobbo666]

Momdummi has promised that one store will be open by the end of his term.

One. Not all five, just one.

Also, every PR event onthis clearly says that they are issuing an RFP for an operator. A request for proposal — this is the written script for getting a bid. When they say that no ID can be required but the successful operator must make sure only borough occupiers (can ‘t use “citizen”) can get the discount — only liars will reply.

[GOPJ]

Controlling food and heath care services are critical to the commie takeover of any country. Lucky for us American commies to too stupid to understand that the United States is NOT the same as Cuba, China, or North Korea where starvation works it’s totalitarian charms enslaving citizens.

[fella]

The appointed Socialist managers of the governmet groceries will soon be occupying confiscated up scale housing, for free (to tbem).

[BFW]

Why stand around for 30% off when you can shoplift and get everything for a 100% five finger discount.

The Commie corner stores will close faster then an unpaid interns legs in DC.

[Honorary Serb]

“Noo” Socialism is a fraud!