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As New York City Mayor Zohran Mamdani moves forward with his plans for city-owned grocery stores, economists and local business owners warn that the proposal could crush small grocers and leave taxpayers with a hefty bill.
The initiative, a key promise of Mamdani's campaign, would establish city-supported supermarkets throughout the city in an effort to reduce food costs.
Adam Lehodey of the Manhattan Institute believes the city could address food affordability more efficiently through partnerships with the private sector and existing assistance programs rather than operating grocery stores itself.
“I think it's really a distraction and a waste,” Lehodey told Fox News Digital. “There is a better and easier way to solve the problem.”
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The first location is expected to open in 2027 in the Hunts Point neighborhood of the Bronx as part of The Peninsula's redevelopment project at the former Spofford Juvenile Detention Center, according to the mayor's office.
The broader redevelopment plan includes 740 affordable housing units, more than 50,000 square feet of public open space, 30,000 square feet of light industrial space and more than 50,000 square feet of community facilities. It would also include a 20,000-square-foot grocery market intended to serve the South Bronx.
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Lehodey also warned that city-backed stores could put small neighborhood grocers at a disadvantage because the projects would receive public support and private companies would not.
“Yes, prices may be a little cheaper, but that comes at the cost of other companies doing sustainable operations,” he said.
He argued that the city is also sacrificing valuable public land and potential revenue by subsidizing the projects.
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“That land has value,” Lehodey said. “By giving it away for free, the taxpayer is losing money again and we are losing revenue that could have been spent on other things.”
A second city-supported grocery market is scheduled to open next year at La Marqueta, a public market in East Harlem. The city plans to spend approximately $30 million to build the site.
Critics question whether another food option is needed in the neighborhood. According to a Fox News Digital analysis, approximately 45 grocery stores are located within a 35-minute walk of the proposed site.
Those stores range from big chains, including Whole Foods and Lidl, to smaller bodegas and neighborhood markets. The area is also well served by public transportation, with multiple subway and bus lines giving residents several ways to get to nearby grocery options.
Some local grocers say the city-backed market could divert customers and hurt already slim profit margins.
“I hope we don't lose customers”
People shop at a local supermarket in the Sugar Hill neighborhood of the Manhattan borough of New York City on April 9, 2026. (Charly Triballeau/AFP/Getty Images)
Despite the abundance of nearby grocery options, some local store owners fear the city-supported market could undercut existing businesses by offering lower prices backed by public support.
“Of course it will affect this store,” said Sarah Kang, manager of a CTown Supermarkets location about a 35-minute walk south, or one subway stop, from La Marqueta.
“A lot of people walk 20 to 30 minutes to get here,” he told Fox News Digital. “If they find a cheaper supermarket, I don't think they'll be willing to make that trip. It will affect the small grocery stores. Definitely.”
“I hope we don't lose customers,” Kang added.
About a 30-minute walk north of La Marqueta, Joel Martínez, manager of a supermarket at 128th Street and Frederick Douglass Boulevard, said the impact may depend on proximity to the proposed site.
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La Marqueta, a Latin market in East Harlem, is chosen as the site for the first city-owned grocery store, announced by New York City Mayor Zohran Mamdani on April 14, 2026. (Kendall Rodríguez/Newsday RM/Getty Images)
“I hope it doesn't affect us,” Martínez said in a call with Fox News Digital. “The store will be a little bit far from us, which is good. But it will affect smaller businesses that are closer.”
Wineries and small food stores are a basic element of new york city neighborhoods, often serving as a primary source of food for nearby residents.
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Similar proposals for local government-owned and operated markets and grocery stores have emerged in other cities. including Boston.
Atlanta officials appear to have pioneered this effort, opening a city supported grocery store aimed at improving access to food in underserved communities.
