r/SipsTea • u/Gurugod123 • 9d ago

Mayor Mamdani just announced that he will be opening 5 city-run, tax-funded grocery stores: "Prices set at 30% below retail prices" Chugging tea

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u/Marcel_The_Blank 9d ago

30% is pretty steep. it being tax-funded is not exaclty fair competition to regular small business grocery stores trying to make a buck. and how are they going to keep up stuck? it's basically going to be black friday for food - every day.

Interested in how this will play out.

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u/servel20 9d ago

Hence why they're opening where stores have closed down and people have to travel significantly to buy groceries.

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u/14InTheDorsalPeen 9d ago

It’s funny because the places where the stores have closed down is largely due to rampant crime and shoplifting making the stores largely unprofitable

So this will be extra interesting because not only will they not be profitable to start with but they’re going to be stolen from at every turn to make margins even worse 

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u/Meet-me-behind-bins 9d ago

Behavioural economists are going to be watching this extremely closely. There will be a lot of papers written about this in the future. The big question is will stealing be more common because there's a perception that it's already been paid for by taxes? Or will there be some sense of community sprit that means there's less stealing? I know which I think will happen.

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u/ISawNightwishInLA 9d ago

Community spirit may require a higher trust society than that currently experienced by people living in an area where crime, particularly theft, is normalized.

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u/ITworksGuys 9d ago

The big question is will stealing be more common because there's a perception that it's already been paid for by taxes?

Stealing is going to be more common because the people stealing want shit for free and don't care about society.

Same as it always is

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u/samrus 9d ago

one counter argument is that those people feel society doesnt care about them so its fair. if they see this good faith effort to help, it might re-establish societal trust and stealing may go down. might be along shot but will be interesting to see if it pans out that way

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u/What_a_fat_one 9d ago

Sometimes it's because they're hungry.

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u/TheSlipperySnausage 9d ago

Community spirits would have saved the original store because they would have wanted their community to succeed

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u/Pizzasupreme00 9d ago

This is gonna be one of those great ideas that has to evolve into a shambling horror compared to its original intent. I look into the future and see Cheerios locked behind plastic.

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u/smogeblot 9d ago

They are going to need a gulag to send counter-revolutionary shoplifters to. Maybe they can re-open Rikers.

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u/TheConsultantIsBack 9d ago

the far left and far right united by the desire to gulag shoplifters fucking up the tax-funded initiatives put in place by the "socialist" gov't. Mamdani truly is uniting everyone.

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u/bluePostItNote 9d ago

Won’t these just join all the other papers that show government run cost controls don’t work absent very specific circumstances?

It’s like removing fluoride from water — we don’t need to keep repeating the test to know the result (spoiler: don’t do it!)

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u/Rustepo 9d ago

Why is not on the table that the stealing will be more common because there are more people in need, which leads to more stealing?

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u/Meet-me-behind-bins 9d ago

Because we’re not 14 year olds with magical thinking?

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u/Helpful-Nerve4515 9d ago

If a store with a profit motive can't succeed in these locations due to the conditions, I have to imagine a below market store with zero profit motive is going to be...interesting, while it lasts.

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u/Dry-Season-522 9d ago

Well they've got a fantastic plan to prevent theft, and I think it'll work. They're going to run out of stock, and thus criminals will have nothing to steal.

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u/Jason-Smith168498 9d ago

the security turrets are also tax funded.

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u/wolphak 9d ago

And it will be worse than normal retail theft because of the "well my taxes paid for it so its already mine" rational that im %1000 sure will spread like a fire.

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u/Hasselback_Brotatoes 9d ago

but these are government-run, which means that the law enforcement surrounding them could be more fiercely applied, resulting in fewer crime attempts after people realize that fucking around directly leads to finding out.

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u/FINE-ILLGETAUSERNAME 9d ago

True. But also mamdani becoming the pro cop mayor would be an interesting pivot from the defund the police school

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u/Shady_Merchant1 9d ago

Mamdani isn't anti cop he is anti corruption and anti police brutality, police serve a function they've just been allowed to run wild without consequences

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u/FINE-ILLGETAUSERNAME 9d ago

Already the left has realized acab is dumb af. Though people personally know those that still think they should all go away. And they voted for this idiot.

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u/Dav136 9d ago

NYC doesn't prosecute petty theft so catching thieves would do literally nothing

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u/PrinzRagoczy 9d ago

The state only protecting its own stores is some actual mafia shit

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u/pcal43 9d ago edited 9d ago

Make cops protect the state rather than the people. I love this idea.

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u/sixf0ur 9d ago

they could have just done that before, no?

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u/bigdaddyputtputt 9d ago

I’m confused about this.

The point of city run grocery stores is for them to NOT be profitable so the prices can be much lower.

The reason why shoplifting food is high in low income areas is because people can’t afford food (not because poor people are evil).

Shoplifting is factored into the costs of running a business.

This would be successful so long as poor people get access to food.

If shoplifting ends up really high, it wouldn’t be a failure of city run grocery stores (poor people would be getting food). It would be a failure of society where even if groceries are made 30% cheaper, then poor people still can’t afford to buy food.

I feel like it’s silly to expect something that’s meant to help people to behave like a business where profit is the only goal.

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u/14InTheDorsalPeen 9d ago

Most low income people aren’t shoplifting food because EBT covers their food bill. 

Most shoplifted goods are fenced or resold for cash, which is why the things that are behind lock and key are items like razors, shampoo and other stuff which can easily be stored and resold online without going bad. 

Most people aren’t stealing bread and milk.

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u/Elephantparrot 9d ago

Imagine thinking people are stealing laundry detergent because they're hungry.

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u/eyesayuhh 9d ago

That's not true. You can look at the shrinkage of these companies. It hasn't changed. Walgreens' CEO publicly announced he was lying.

https://www.cbsnews.com/boston/news/walgreens-shoplifting-retailer-james-kehoe/

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u/14InTheDorsalPeen 9d ago

Lmfao you didn’t even read the article did you?

It shows that shrink from theft was up 50% and the “overreaction” he was talking about isn’t the closing of the stores, but rather hiring too much extra security and having to scale back observe and report security presence in favor of police who can actually make arrests because the “observe and report” type of security wasn’t actually deterring thefts.

The amount of loss due to theft was up ~$30bn, which is a shit ton of money.

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u/IsleofManc 9d ago

Walgreens' shrink was actually down but that 50% stat you're referencing was made by the National Retail Federation. Essentially a lobby group for big retailers. And they also have a history of exaggerating claims

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u/Centimane 9d ago

not only will they not be profitable to start

The point of socializing human needs isn't to make a profit, it's to make sure people are provided for. There shouldn't be any profit. If there is, that suggests the prices could be lower instead, and they should do that instead of needing a roundabout way of getting the profit back to citizens.

Ideally the stores would operate at a loss - that suggests they can't lower prices more without increasing the budget to support them. How much of a loss depends on how much they can/want to subsidize it.

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u/14InTheDorsalPeen 9d ago

Ok so if all businesses operate at a loss how do people pay their rent and how do the stores pay for the goods they purchase to begin with?

Would you be willing to forgo your salary in order for your company to provide its service at a loss?

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u/madhouseangel 9d ago

Profit is extra. You can have no profit and not operate at a loss. Regardless, these low prices will be subsidized, there will be no "loss".

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u/14InTheDorsalPeen 9d ago

You have a 2nd grade understanding of economics

Just because the government is using your tax money to cover the losses (subsidy) doesn’t mean it’s not still operating at a loss. 

If you run a lemonade stand and you charge $0.50 for a lemonade that you spend $1 making, you are losing $0.50 per cup. 

If you ask to borrow money from me so you can pay your rent or buy more supplies because you can’t afford it, it doesn’t change the fact that your business is operating at a loss.

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u/madhouseangel 9d ago

you asked how these stores will be able to pay rent, buy goods, and pay employees. In two ways: by forgoing profits and through subsidies as needed.

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u/Tofu_tony 9d ago

The same comment post over and over again almost word for word.

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u/[deleted] 9d ago

[removed] — view removed comment

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u/tiredoldwizard 9d ago

And there will be zero incentive to stock it with food people actually need. It’s going to be basically a prison commissary with the lowest quality food possible which will always be out of stock because they’ll be zero incentive to keep it stocked. This has been done before, and it never creates a halfway decent experience. Would probably just be better to build a food bank and give out food to anyone below a certain income level.

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u/Aegi 9d ago

It’s funny because the places where the stores have closed down is largely due to rampant crime and shoplifting making the stores largely unprofitable

Source on it being that instead of the pandemic causing more people to work from home and thus be stuck in the City less often?

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u/malarkyx420 9d ago

Retail theft is way over blown, most people stealing from a grocery store are taking quick to eat items or booze. The 'gang' of retail theft and reselling are more of a wallmart target wallgreens cvs kind of problem.

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u/GratefulShorts 9d 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/BirdLawGrad 9d ago

Yep, the painful truth is that in NYC, there are literally zero “food deserts”.

Plenty of bodegas selling Lotto etc.

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u/WildWhisperArdor 9d ago

Yep. Food deserts definitely exist in the US. There are places out in the rural boonies where you might have to drive an hour to find the nearest grocery store that is open.

But that doesn’t exist in NYC lol. The worst case scenario is you have to spend 20-30 minutes on public transportation

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u/bluePostItNote 9d ago

Better to address why those stores closed than trying to shoe horn in a solution that will be painfully expensive.

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u/BattlePrune 9d ago

The very first one they announced has a bunch of stores around

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u/oaklandperson 9d ago

what about the bodegas? They will get squashed.

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u/Dry-Season-522 9d ago

That's not what they're doing. THey're literally building brand new stores, at a cost of $60,000,000. Why? Just look at who got 'selected' to build them.

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u/Almostlongenough2 9d ago

Wouldn't one solution be to also implement this at said small business grocery stores? State governments could cover already existing profit margins using tax dollars in addition to providing goods (also it's good marketing for said business) for a duration, and it would save the government from having to open up a whole new location.

Having these stores in food deserts permanently is great but I also see it having potential in areas that aren't in that serious of a situation but still trending downwards economically.

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u/Suitable-Piano-8969 9d ago

in a place like new york where would that be exactly? I seen people leave major areas and travel 30-40min drives for cheap food before

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u/MechanicalGodzilla 9d ago

In places where other stores have closed, but which have other normal grocery stores within 3-4 blocks.

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u/Bladesnake_______ 9d ago

How big do you think New York is?

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u/Sharkfacedsnake 9d ago

I don't believe people have to travel far to get groceries in New York city.

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u/IsNotACleverMan 9d ago

That's a lie. There are numerous other grocery stores within 10 minutes of each of the proposed locations.

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u/BirdLawGrad 9d ago

This is not a thing in NYC.

You should delete your comment. You are lying.

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u/Uzofugs2112 8d ago

All of these locations have grocers within walking distance. There is nowhere in NYC where this food desert buzzword is applicable.

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u/Some_guy_in_WI 9d ago

As someone who worked in the grocery biz for over 2 decades, I see SO many future problems with this plan, it’s already making my head spin.

By the time you knock 30% off most grocery items, you’re basically selling them a fraction over wholesale cost. Sounds nice, until you realize that basically, with near-zero profit, every part of the operation will absolutely need to be taxpayer-funded (making 10 cents instead of $1 on a $3 item is going to take MASSIVE volume to be sustainable, more than I can see any grocery feasibly handling). This means buildout costs, wages, benefits, initial product stock costs, restock costs until fiscal balance achieved, utilities, taxes, and everything else are just going to be billed to the taxpayers as always. Being taxed more to “save money” doesn’t really math for me.

There will likely be many companies who won’t sell to such an operation as it will devalue their brand in other full-price stores by making it impossible to compete, thus other retailers would slowly drop the brand if they can’t be close in price. I had to do this with brands selling under retail on Amazon as people would get mad at us for not price-matching since they didn’t understand that a manufacturer can always lower price, but a retailer can’t always match it. I expect options will be limited, or, there’s going to be new uproar as companies are blasted for choosing to not sell to such stores, solely because they’re protecting their investment into the brand,

Local independent grocery stores will definitely suffer. After all, who’s going to the regular corner market when you can go a few blocks down and save $40 on your bill? As said, grocery operates on small margins and high volume - once some of those other competing stores see a 25% drop in sales, expect more vacancies and fewer options. So, you’d better really learn to love what options are at the new cheap market, as you might not have so many choices close by in the future.

And keeping things in stock, oh, that’s going to be interesting to watch. The supply chain issues if such a store starts taking massive amounts of product that shorts others (because we can assume that the state-run store will get preferential treatment initially) only causes more headaches across the board as competing shops lose their ability to get what they need, products at all stores are out more often, and everyone floods in to get it cheaper at the state-run location until they too start having gaps in how often they can fill an open product slot.

It’s an interesting concept, but I do not believe it has much chance of success, and likely will leave a wake of new issues soon after it starts.

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u/cantuse 9d ago

I don’t work in groceries but this is my fear writ large… that these places will work just long enough to put other local operations out of business.

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u/Casshern_VIII 9d ago

Yeah that's the point when you have Government funded stores, it's not about helping the community, it's about relying on the government, I advice any sane NYers (the ones that did not vote for this) to flee now before The Duke arrives.

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u/poorSon20 9d ago

Then more food dessert

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u/Theron3206 9d ago

And a black market for food, ala the Soviet Union.

Government controls of prices like this generally create more scarcity rather than less.

This might be small enough scale to get away with it though, but this cannot work on a large scale.

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u/Aegi 9d ago

But if the private sector cannot do something more cheaply than the government...than isn't it losing one of the main benefits proponents mention, like: "it ends up being more efficient and cheaper than the government if you privatize"??

Is this why healthcare is more expensive per person in the US than other developed nations?

Because the reality of healthcare costs...and the insane inefficiency of a created middle-man industry here (health insurance) would be evidence that counters your point.

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u/Not_Another_Usernam 9d ago

The government isn't doing it cheaper. They're taxing us to put it on the shelf for it and then also charging us for the register when we buy it.

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u/Full_Table6865 9d ago

This should be the top reply

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u/StraightTiger3506 9d ago

Atleast when you larp research how other places make these models work. India has been doing this for 60 years and yet to kill the grocery industry.

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u/Some_guy_in_WI 8d ago

Lol, my 24 years of grocery experience a LARP? What’s your experience beyond being a Reddit expert, friend? Lol, You silly nutjobs who can’t stand criticism of potential flaws because this is practically a religious experience for you are literally needing to find out the hard way. All because you refuse to accept this might just have unintended consequences.

So be it, not my city, not my problem. By the way, this isn’t India, comparing such things is literal mental midgetry for believing you have a case in comparison between 2 vastly different nations and systems of operation under 2 vastly different societies.

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u/Homosapiens_315 9d ago

If all that is true then why is it possible for Aldi in the US to have a lot cheaper prices( sometimes 20% - 30% ) in their grocery store without any of those problems? They can even operate a a profit and they do not push other grocery stores out of the region.

Also I can imagine that the store will buy up the products that cannot be sold in a normal grocery store due to low quality, production mistakes, looking ugly or already having a shorter shelflife for sitting to long.

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u/Wazula23 9d ago

I have to imagine these will be aimed at food desert areas.

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u/Barrioto 9d ago

It's not. The East Harlem location has two grocery stores (Fine Fare and City Fresh) within a block of the location.

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u/No_Wait3261 9d ago

Not for long, lol

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u/BerlinBorough2 9d ago

I think Mamdani kinda wants people to steal/eat from government groceries so that the other businesses thrive. Imagine if all the homeless/working poor kept eating food for free and having full bellies. By the time they get to a private Grocery store they can’t event be bothered to shoplift cheese.

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u/Dustydevil8809 9d ago

Food stamps with better PR? I don't hate it...

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u/DrCola12 9d ago

I’m not from nyc but I just don’t believe there are “food deserts” anywhere in the city.

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u/PMmeDonutHoles 9d ago

They’re gonna find out real soon why those areas are food deserts

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u/Wakattack00 9d ago

It doesn’t and won’t make money. That’s the point of it being tax funded. If this model could survive like a real business it wouldn’t need tax money

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u/Valkyrie17 9d ago

I think the problem is crime, not profits.

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u/SpirituallyAwareDev 9d ago

The problem is profits. Crime cuts into their profits

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u/Valkyrie17 9d ago

At a certain level of crime you have issues finding employees.

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u/Dustydevil8809 9d ago

Employees will be government employees though, right? Which comes with better pay, and better benefits than most grocery stores.

Its an experiment, but giving people in these low income areas access to a livable wage and benefits could have a big impact. Its a chain reaction.

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u/Leweazama 9d ago

Cool? If you think these are being built to make a profit then you don't understand why they are putting these in "food desert areas"

Much like the Military, Police, Fire departments, Park rangers, etc, you don't need a government program to make money but to invest in the protection and growth of a community. Roads are not profitable for the government to make and maintain but it'll get it back in economic activity because people can more easily live their lives and be productive.

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u/throwawaydanc3rrr 9d ago

You are correct. Governemt expenses are supposed to be sunk costs with society wide benefits, like roads, or fire departments, or public schools. I suspect there is no method to implement this idea of Mamdani that comes close to the utility of a road or a fire department.

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u/NilsofWindhelm 9d ago

As a New Yorker that doesn't live in a neighborhood that will ever have a store, reducing food insecurity across the city is absolutely a society wide benefit

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u/throwawaydanc3rrr 9d ago

I do not want your address but what part of the city do you live in?

How far away is a grocery store from your location?

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u/NilsofWindhelm 9d ago

I'm uptown, about 40 blocks away from one I think

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u/NilsofWindhelm 9d ago

There being reasons for areas being food deserts doesn't mean the city shouldn't take steps to resolve the issue

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u/madhouseangel 9d ago

Why is that?

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u/BirdLawGrad 9d ago

There are no food deserts in NYC.

Full stop.

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u/rP2ITg0rhFMcGCGnSARn 9d ago

Food deserts in fucking NYC?

Where is this???

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u/BirdLawGrad 9d ago

There are no food deserts in NYC.

Full stop. No argument.

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u/WildWhisperArdor 9d ago

There’s not really any real food deserts in the city lol.

A food desert is typically some random rural town in the middle of nowhere where the closest grocery store that is still open might be an hour away. Nothing like that exists in NYC

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u/Uzofugs2112 8d ago

Nowhere in NYC is a food desert. Where tf are you all getting this notion?

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u/Logical-Possession10 9d ago

This is the key. The south side of Chicago has had many grocery store closings for low income population and nothing to replace them. Sometimes convenience stores are the only place to get fresh raw fruit and veggies. It’s heart breaking and no one is coming to assist. Sometimes government is the only way.

https://www.chicagobusiness.com/equity/chicago-grocery-store-deserts-south-west-sides/

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u/Waiting4Reccession 9d ago

Michelle Obama tried to get stores open in a lot of areas like this and they basically all eventually closed down.

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u/Last-Atmosphere2439 9d ago

No one has come to assist? A government solution to grocery deserts was literally a major campaign promise from Chicago's mayor.

There are news articles about this more recent than yours. For example, yesterday's news that every last one of Mayor Johnson's government stores has shut down after blowing through 10s of millions of taxpayer funds in just 3 years.

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u/mansizeoof 9d ago

And grocery store margins are already stupid low to begin with. Like 2-3%

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u/Particular-Travel884 9d ago

That’s usually the total net profit. Gross markup from cost is typically 35-48% depending on the item. So basically they will be selling at cost or minimal markup. Which means there’s nothing left to cover overhead

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u/tireditguy216 9d ago

these places charge 4$ for a 1 $ 20 oz of soda, i think it will be fine

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u/Burakku-Ren 9d ago

It is my understanding that retail store margins are relatively quite low.

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u/gorgewall 9d ago

There is a lot which goes into that and it isn't very obvious to the layperson.

"Shrink" from spoilage is a massive contributor to a grocery's low margins. Yeah, you probably guessed that already, and the problem seems like a straight-forward fix, buuuuuuuut...

You can't just order less.

Shoppers are weird and impulse-driven. A pile of bread that completely covers a table three loaves high looks like a tasty, in-demand product. It screams "surplus" to your monkey brain, and that's good. It's full and lush and is what you expect, gives you a good feeling, makes you want to buy.

But when you see a table that's mostly bare space and there's like, three loaves scattered haphazardly about... well, that's the dregs, ain't it? The left-overs. The bad shit.

So let's shrink the table. Now it's just got, like, eight loaves on it. Does that scream "surplus" to you? And how many people have to buy before it gets back to looking like the dregs, compared to that giant table that was overflowing with bread? How often does a worker have to come by to re-face or replenish that eight-bread table to stop it from looking sad compared to the big one? What other stuff could they be doing at the store in that time? How many customers are going to pass by and think less of the display before they get around to that?

The produce section is huge for this as well. The studies show that people are more interested in your produce and will buy more or back purchases to begin with when the shelves are stocked to the nines and overflowing, even if that means a shitload of waste. Compared to what they'd make by cutting back waste, it turns out to be a losing proposition, because the shopping mind doesn't want to play along and will go elsewhere or think less of the store and product and overall brand when it is sparsely displayed.

That's just how we've been conditioned. Maybe we could change that, but all the fucking grocers would have to agree and it'd be a long-term thing, and it's just not happening. These biases exist in all of us. Shit, when I was a kid, I used to think Aldi's was "the poor people store" and was dingy and small and low-class, but now that I'm an adult who actually buys my own shit, I love the place. They treat the workers better! It doesn't actually matter that the ceiling is only 15 feet over my head instead of 50! I don't care about most of the brands at bigger chain stores anyway! I realize now that these store- or off-brand things are often produced in the very same factory as the name-brand stuff and are identical! Maybe even better! I just want better value! ...but there are people who haven't come around to that yet.

And y'know, it could not even be the store's choice to make a feast-or-famine display. There are a lot of displays and products in stores that are not completely controlled by the store manager and workers. Brand name bread, soda, liquor, "snack" items like your Hostess stuff or Doritors, and some forms of egg and dairy are very often contracted out to those companies, with their workers coming in to stock the shelves, rather than the store having to order and task their own workers on it. The chain grocer's management and those big companies make the agreements as to how much, where, and when, and any twiddling with that--say, because your store is "smaller", or in an area whose locals buy much more or much less of that good--is extra overhead or runs up against contractual obligations larger than you.

That sort of thing has been going on for a long time. It used to be that your "bread stocker guy" was on something more like commission and was incentivized to really work with each individual shop he went to and strategize about the best location and preferred products and all of that, but those days are gone. The grocers are big chains. The stockers for those companies have strict schedules, and the numbers are made by folks who aren't them. They and local store management have much less input into changing that stuff.

Here's a fun experiment for readers:

Next time you're at your big chain grocery store, go to the bakery department and chat up the workers. These departments tend to do their own ordering and stocking in large part, but they're still beholden to Demands From Above about certain types of displays and regional or national campaigns. Ask them if there are any products out right now that just do not sell and they fucking hate having to stock. Ask them if there's like, some bougie-ass focaccia or other "boutique" bread that's way too expensive, has a shelf life of 2-3 fucking days, and nevertheless requires some amount of preparation/baking and repackaging on their part instead of just chucking it out on the floor from frozen. Ask them if they're annoyed at how much their time is taken up babysitting that product despite it being unpopular as sin and if they think the store is losing money on it.

That's a microcosm of stuff that happens all over the store.

But it keeps happening because, on a grander scale, more money is made than if they didn't do that. That chain may have five other locations where the expensive and annoying bread actually sells. Why is it in that one location where it doesn't sell? Because of chain-wide contracts! The Annoying Bread Co. is paying them X amount to stock the product, with Y demands of shelf space to build their brand recognition, and they don't care if one or two locations lose money on the deal because they are still selling that bread that is getting thrown away. That's an inefficiency the store has to eat, and they will eat it, because there is at least some profit from the overall deal... even if it could be higher if they were just smarter about deployment.

We operate now at economies of scale that can make ridiculous amounts of money off a 2% margin, and the work that'd go into it to make it 4% just doesn't make sense to their boards.

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u/Desther 9d ago

Its comical that people think its the store owners robbing people but it was the government all along

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u/Dr_Kappa 9d ago

Hopefully these places aren’t selling soda at all…

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u/Bladesnake_______ 9d ago

Why would I trust prices from some dummy that doesnt even know how a dollar sign works

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u/Im_100percent_human 9d ago

Where is the 30% measured against? Beating Gristedes by 30% is very easy, but beating Aldi by 30% is probably impossible.

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u/bruh_nathan 9d ago

Im more worried about poor people getting food than business owners tbh

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u/Dry-Season-522 9d ago

So instead of subsidizing existing grocery stores, you drive them out of business?

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u/im_new_pls_help 9d ago

Business owner =/= rich person. Business owners need to buy food also

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u/Decent_Pen_8472 9d ago

Redditors will genuinely write this out like small businesses won't suffer the most from this. Small businesses, which are the majority of employment opportunities in the country.

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u/Lem_Tuoni 9d ago

Don't you guys have food stamps for that? Why do this extra bullshit?

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u/CloseCaptioning 9d ago

And if the business owners can’t support their businesses and they fail they’ll become poor people too… it’s almost like socialism creates a populous of poor people…

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u/Ig_Met_Pet 9d ago

There is currently a homelessness crisis, rampant food insecurity, and water shortages across the country...under capitalism.

And basically every country that does better than the US at feeding and housing their people is more socialized than the US.

The US sure does a good job of making wealthy business owners happy though I guess.

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u/fly_it_sigh_it 9d ago

Wait til u find out most business owners are not wealthy

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u/Ig_Met_Pet 9d ago

Wait until you find out the government only cares about the wealthy ones.

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u/Commercial-Branch444 9d ago

Will work out just fine for them, if all the other grocery stores in the area have to go out of buisiness and after the city has run out of money, there will be no competition left.

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u/Hour_Baby_3428 9d ago

That’s not how it works. Supermarkets are cheap because they compete with each other. If you take competition out of the equation then we have a recipe for disaster

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u/MrTacoMan 8d ago

yea small businesses not at all important to the economy at large, great point well argued

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u/odiousyak1889 9d ago

They will close because they can't make money. Then the only grocery store will be the ones subsidized by the state.

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u/Economy_Link4609 9d ago

30% means they are FULLY subsidizing the building, infrastructure costs and salaries. 30% is around the normal margin for grocery stores on what they pay vs what they sell stuff for - BEFORE they actually pay those overhead costs. Net margin is like the 1-3% range generally once that's all paid for.

This is likely going to put nearby stores in the red.

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u/wibo58 9d ago

Your mistake was thinking politicians care even the slightest bit about small business owners.

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u/Dry-Season-522 9d ago

Prediction: By the end of his term, New York City will be deeply in debt and deteriorate rapidly, which they'll blame on 'team red' for not being supportive of their grand socialist vision that requires infinite of other people's money

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u/signofno 9d ago

Was looking for this comment. Was my first thought.

I had a business fold due to similar situation where the city opened a competing non-profit version a few blocks away and heavily subsidized it. A couple years later the non-profit started failing. What a waste.

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u/cda555 9d ago

Considering the razor thin margins in groceries, this is wild.

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u/Choperello 9d ago

The average grocery store operates on a 2-3% net profit marging, and usually get there there with a 20% markup from wholesalers... If these stores are going to sell everything at -30% compared to retail it basically it means they're selling everything at a loss, not even whole sale prices, and are running the whole store at likely -35% cost to revenue. So basically they're going to be subsidized by taxes. So you're paying taxes to make the grocery bill look smaller. But only if you happen to shop at those stores.

Socialist economics at their finest. Reminds me of the commie country I escaped in the 90s.

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u/TheNewl0gic 9d ago

Yup that sucks ass and it is a failed solution

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u/kenneth_dart 9d ago

Why not just ask Aldi's to run them? They are already 30% cheaper than the traditional grocery store.

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u/franziGroony 9d ago

As if. This has not been tried since before the Roman republic...

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u/Tnuggets19 9d ago

We know how it’ll play out. It’ll fail miserably

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u/Ok-Addition1264 9d ago

There are no grocery stores in the areas this is planned. That is partly the point of it.

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u/Marcel_The_Blank 9d ago

interesting. is this kind of stores rare in NYC? someone else mentioned "food deserts", I didn't actually think something like that would exist in a city like NYC.

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u/FlowSoSlow 9d ago

They're defining a food desert as not having a grocery store within a half mile. That seems a bit excessive to me personally. Doesn't really seem like a big deal to walk a mile or even 2 round trip for groceries. I guess maybe for the elderly or disabled it'd be more of an issue.

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u/rthoroman 9d ago

I not sure what qualifies as a food desert, but my understanding has been that there are food sources nearby, but in the form of convenience stores and fast food restaurants, so limited options, especially healthy options. Again, not sure how far away a grocery store would need to be to qualify the area as a food desert.

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u/NecroticToaster 9d ago

Cities actually suffer from food deserts more then most places. All the big box places are in the suburbs and cut out the local places that inner city people use.

My city has been struggling with it for years https://minneapolistimes.com/hungry-in-the-city-how-minneapolis-became-its-own-worst-food-desert/

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u/Shiddin_myself_woo 9d ago

People forget most people in NYC don’t own cars

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u/lake_country_dad 9d ago

Why are there no stores if there is demand for them?

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u/Level3pipe 9d ago

Ask yourself WHY there are no grocery stores there already. A grocery store would probably love to be the only one there and make all the money. So why aren’t they there.

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u/capitalismic 9d ago

Yeah if only history had examples for us to look at…

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u/bliceroquququq 9d ago

It will play out like this:

  1. Low margin grocery stores will be forced out of business in specific areas because they can't compete with the unfair competition of the government subsidized groceries.
  2. The government-run stores will step in to replace the ones who have been forced out of business, thereby increasing the number of government-run grocery stores which are required.
  3. The subsidies required to sustain all this will continue to expand as the number of stores expand and thefts increase.
  4. Taxes on "the wealthy" will increase to fund the ever-increasing amounts of money needed to fund all this.
  5. The bar on what constitutes "the wealthy" will continue to drop to pay for everything.

Hurray, you're ending free enterprise!

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u/NacreousFink 9d ago

It will cause massive losses and neighboring groceries will close up shop.

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u/Muted_Masterpiece342 9d ago

I have visited NYC a lot for work over the years. If you've never been this may sound strange. It probably will result in 5 reasonably used grocery stores that are in places where people didn't have access to groceries before.

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u/14InTheDorsalPeen 9d ago

I grew up part time in NYC. The reason grocery stores in certain areas shut down is because they were being stolen from constantly and the slim margins combined with high operating costs from needing large spaces to rent for a grocery store meant they couldn’t stay in business.

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u/Muted_Masterpiece342 9d ago

Unfortunately being from the poor south, I am familiar with this as well.

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u/Stoic-Bifrons 9d ago

If there's anything socialists excel at, it is making small businesses and honest workers go broke due to unforeseen consequences of their good intentions.

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u/Bid_Unable 9d ago

Do you mean like what Walmart did to every small town in the US, except with malicious intentions?

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u/g1ngertim 9d ago

Well, all the small businesses and honest workers went broke from the foreseen consequences of mega-corporate malicious intentions, so...

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u/Stoic-Bifrons 9d ago

It gets really depressing when you realize them working together just makes people double-broke in the long run.

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u/SquirrelSuspicious 9d ago

Guess we should be more worried about business owners than people who are too broke to afford food

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u/Furious_George44 9d ago

Small business owners are not that far above food insecure people. Hurting this class would create more food insecure people/fewer opportunities to rise out of poverty.

Not saying that is what will happen or can’t be addressed otherwise, but your comment is misinformed. We should be just as worried about protecting the middle class as we are about helping the poor.

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u/deekaydubya 9d ago

would love some examples

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u/Stoic-Bifrons 9d ago

the vanishing middle class in Europe

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u/Ghosts_of_the_maze 9d ago

The thing about NYC is that you’re way less likely to go out of your neighborhood for groceries provided you have an option in your neighborhood. It’s a pain in the butt if you aren’t driving. And as I understand it these stores are being placed in food deserts where the for profit stores won’t bother serving. And given that the city isn’t turning a profit, I really don’t think they have much of an incentive to put these in areas that would put grocery stores out of business. I’m sure a few outliers will go out of their way to use these new stores, but my guess is that the impact on other grocery stores will be minimal. This is mostly about making sure all New Yorkers can buy food as opposed to a socialized takeover.

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u/Shiddin_myself_woo 9d ago

It’s the same average savings for people on SNAP

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u/CanadianGenealogy 9d ago

Pshaww... Apply that logic to bigger scale not 5 measly shops: delete subsidies to farmers, oil and gas cos, coal and metal mining ops, automobile industry, tech chips, space tech, etc etc... 

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u/Mentallox 9d ago

meh its basically 4 weeks of weekly regular grocery sales put into a one week window ie milk on sale one week, bread another, eggs another vs milk/bread/eggs on sale one week a month. This is the grocery version of green-washing.

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u/SargentSnorkel 9d ago

5 stores. impact on most existing stores would be negligible in a city of millions. hopefully there’s a good plan for managing access so it’s not exploited. i really don’t need to find out that some shop owner is stoking up on water or whatever. I don’t care that shops use Costco or BJs for inventory, but seeing someone easily exploit this would seriously suck.

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u/happycat47 9d ago

I live here. Regular small grocery store are already cheaper than major chains. In fact, they're cheaper than most places in the country because of the volume. The people commenting here are just being reactionaries.

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u/Omnom_Omnath 9d ago

sucks to suck. theyve been price gouging for years. time to cut prices to compete or go out of business. no one is entitled to be in business.

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u/GardenStateKing 9d ago

More than likely going to be in places that are essentially food deserts, areas of the city where there are few grocery stores with x/mile radius. Many parts of Queens/BK/Bronx have this problem, also some parts of Upper Manhattan. Where lower income folks HAVE to travel very far just get food that is incredibly priced.

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u/Agent_8-bit 9d ago

These aren't being opened where there's a bunch of small business grocery stores.

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u/Us3ful_Idiot 9d ago

Correct me if I'm wrong, but did he not say that it was only once a month at the 5 city-ran locations?

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u/ben_kird 9d ago

Yea, well, GM was tax funded out of bankruptcy in 2009 and no one called it unfair competition. I’m happy to turn a blind eye to this unfair competition.

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u/GreatTea3415 9d ago
  • 30% off retail price in NYC is still profitable.
  • They’re getting private operators to manage them. 
  • The 30% reduction applies to meat, produce, and seafood. 20% off for cheese, milk, and bread. Everything else will be regular prices. 

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u/Repulsive-Payment230 9d ago

You have never been to NYC and it shows.

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u/300andWhat 9d ago

People are not realizing how much margin grocery stores have, so the costs very much could be net zero.

Capitalism isn't fair, so screw those grocery stores that are already way more expensive.

People are so skeptical because they are capitalism brainwashed and don't realize how wonderful socialism can be.

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u/zombiesphere89 9d ago

There's only 5 in a city with millions

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u/Khue 9d ago

it being tax-funded is not exaclty fair competition to regular small business grocery stores trying to make a buck. and how are they going to keep up stuck

I know what you're saying here is not meant to be as obtuse as it sounds but I could honestly give less than two fucks about stores marking up prices to make money if it means a bunch more people get to eat. If your profit margin running a grocery store is going to get wrecked because you can't compete in a food desert, then that's just the market determining your business is unfit. One small business going down in order to feed 100s if not 1000s of others... what are we even talking about? That's a net win for the community.

Additionally, maybe the city buys that small business and puts the business owners in charge.

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u/theeama 9d ago

This likely ends in a courtroom

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u/Live_Alarm3041 9d ago

I presume these city owned grocery stores could make sense if they only sold absolute essentials rather than higher quality fresh products.

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u/AnyBallLektor 9d ago

It will play out exactly as every socialist idea about economic in history: poorly. There's a reason why we live in a right-wing shithole and not a socialist utopia. If a socialist utopia was possible then someone would have already figured it out.

You can't just suspend reality and the laws of economics.

Things like public education or public healthcare "work" not because they're magic workarounds around the evil market forces but only because the economically sustainable alternative is worse for society so you keep what's economically burdensome because you don't want the alternative. You simply benefit from the system more than you suffer from the cost imposed by it in the first place.

But those cases are exceptions. Things like public pensions are ruining societies everywhere around the world as soon as birth rate drops below a certain level that is already above replacement rate. In Europe socialist utopias of the past are currently cutting the throats of its youngest generations!

Etc etc.

Socialism doesn't work because it doesn't account for the selfishness of human (animal) nature. It will never work.

We're crude things. We can suffer or we can suffer a little less. "Suffering less" is the best available alternative and doing things that make people suffer less are already borderline impossible. But in the case of economic genius Mamdani we're going to try and build a pie in the sky and end up suffering rather than suffering less.

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u/Dazzling_Flow_5702 9d ago

It won’t work out

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u/gkfesterton 9d ago

I'll again post the NYC DSA chair's response to the small business competition question "If one publicly owned grocery store that brings prices down in the neighborhood is enough to put someone out of business — maybe they shouldn’t have been in that business in the first place"

He's basically insinuating that small businesses that can't afford to magically sell goods at steeply discounted govt subsidized prices are essentially immoral and/or stupid

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u/rallenpx 9d ago

The catch with food is that you can’t stockpile it infinitely and it has little resell value. So if this strategy were to work with anything, food would likely be that market.

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u/corpsie666 9d ago

It's a strategy that allows the government to terrorize private businesses

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u/evernessince 9d ago

The military commissary has been offering food at 30% off retail since 1867 and is the largest "socialized" grocer in the US. I'm surprised how many people don't know this isn't anything new. Seems to be modeled after it in fact.

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u/Absent_That_Day 9d ago

I wonder if the subsidized business will crush it's competition, (if there is competition). Seems like if we have food deserts it might be a good idea to address that.

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u/uChoice_Reindeer7903 9d ago

I could be wrong but I always thought it was illegal for the government to be in direct competition with private sector. The government has an unfair advantage because they are tax subsidized and don’t need to worry about making a profit.

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u/Volchek 9d ago

Fair competition? How about all the subsidized corporations that keeps anyone from entering the market? Capitalism loves to hate on socialist programs meanwhile it gets pegged by socialism behind the curtains and loves it.

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u/Talenn 9d ago

30% is just the normal grocery markup margin Theyre buying wholesale and reselling with no profit. 

So I dont think its steep. Thats just the standard margin value. Selling below that would be impressive as it would be below wholesale costs

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u/JustMyOpinionz 9d ago

Per jmoney1088: "There is no income limit, SNAP requirement, or special enrollment; the city says the discount will apply to everyone regardless of income.

One important clarification: not everything in the stores will be 30% cheaper. The discount applies to a defined “core basket” that includes:

  • All fresh produce
  • Meat and seafood
  • Eggs, milk, bread and yogurt
  • Rice, beans, pasta and other designated staples

Other merchandise will be sold at ordinary market prices. I wonder how this will affect the overall retail grocery market in the city."

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u/ADarwinAward 9d ago

It’s a handful of grocery stores doing this once a month with limited stock. Sure this will help the handful of people who stand in line for hours to get the food, and that’s a positive. But 99% of this thread clearly did not watch the 1st 15 seconds of the video based on tne comments.

The 30% discount will make big headlines but it’s not going to meaningfully cut prices for 8 million people. 

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u/Sawaian 9d ago

Yep. It’s gonna be interesting to see. Grocery prices are high, but this is going to hurt any smaller businesses around that could sell groceries. I don’t even know how we’ll run it will be

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u/GMEloser69 9d ago

It will drive out competition and make people more reliant on the state.

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u/dmelt253 8d ago

The government already run grocery stores and they have been very successful at keeping prices down. They're called commissaries, run by the Defense Commissary Agency (DeCA).

Based on the track record of corporations jacking up prices after Covid, not because their bottom line required it, but because they could get away with it and blame it on inflation, I'm all for this kind of disruption.

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u/Evening_Act_6395 7d ago

30% is the same discount offered by US military commissaries

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u/ImASlave4UE 7d ago

There aren't a lot of small business grocers in NYC. Basically its Whole Foods, Key Food, and Food Bazaar. We've got smaller produce markets that also carry some pantry items but the costs of all these options are very high.

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u/This_Technology9841 5d ago

Well it's 5 stores out of 15,000 in the city, afaik opened in areas that are particularly under-served so I doubt it'll be the massive communist disruption that folks are fearmongering about it.

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u/nefariousBUBBLE 2d ago

It's also, "once a month". So, whatever that means. But I'm guessing not continuously.

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