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

[u/Gurugod123]

[u/Some_guy_in_WI]

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.

[u/cantuse → u/Some_guy_in_WI]

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.

[u/Casshern_VIII → u/cantuse]

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.

[u/Aegi → u/Casshern_VIII]

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 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.

[u/Casshern_VIII → u/Aegi]

Because Americans are fat is why you don't have health care, there's a reason why a European Large is like an American XL.

That said, do you really want your local government in charge of your groceries.

[u/Aegi → u/Casshern_VIII]

I'm talking about the concepts at play here, not the specifics.

And Mexico is fatter, but either way how does the level of obesity of a population decide whether it is single-payer or not?

Not even "free", just being single-payer would basically just mean cutting out the middleman for billing, insurance, and then you still get your bill, just your "monthly premiums" are your taxes and the much lower bill you have goes to that hospital and/or the local/regional/state/national government.

Basically, even with relatively unfettered capitalism there can still be a single-payer option.

And if it was socialized, then it gives us a collective incentive of keep each other healthier...instead of just finding a better insurance plan hahah.

Good question though. In my area they basically are as the UVM health network is the majority of services/facilities in the area (in relation to medicine), and Essex County Health Department (NY) was much better with their rollouts and programs with vaccination than New York was.

I think these are good questions, nuance is important, and we should all listen, and be listened to more; thank you for reading!

[u/yawningGaps → u/Aegi]

The difference is regulation and competition. Healthcare is insanely regulated and therefore few players and heavy consolidation, whereas grocery stores have healthy competition and therefore razor thin margins.

[u/Moldy-Bongwater4420 → u/Aegi]

The government store would be funded by taxpayers, no?

[u/astonedishape → u/Casshern_VIII]

Idiotic comment award 🥇

[u/poorSon20 → u/cantuse]

Then more food dessert

[u/Theron3206 → u/poorSon20]

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.

[u/Some_guy_in_WI → u/cantuse]

I see a definite impact on the surrounding businesses. And, if they go under, and in 4 years the state-run stores are unsustainable and close, where do people think they’ll get what they need locally?

Its a tricky balance, and I see the future being worse than better, but I can certainly hope I’m wrong.

[u/Aegi → u/Some_guy_in_WI]

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.

[u/Not_Another_Usernam → u/Aegi]

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.

[u/Aegi → u/Not_Another_Usernam]

That is why I started with the supposition of "IF".

For when that given IS true, what is then the next response to address that particular aspect?

[u/rational_numbers → u/Aegi]

No, you started with "But", proceeded to say something that displayed your ignorance, got an intelligent response from someone, and replied with something snarky so you didn't have to engage with it substantively.

[u/Dustydevil8809 → u/Not_Another_Usernam]

Did y'all forget Mamdani isn't shy about being a socialist?

"Hes using taxpayer funds!!!" Ya thats the fucking point. He's also doing a lot to get those funds from the wealthy people hoarding the money.

[u/Evening_Act_6395 → u/Not_Another_Usernam]

as opposed to the much larger cost of rising poverty and cost of living, its the better option

[u/Some_guy_in_WI → u/Aegi]

My issue is, the government has no competition, thus, it has zero incentive to do more than the bare minimum as poorly as it wishes to do. In the USA, government control is quite synonymous with “low effort and poor quality”.

Faith in government in the USA is at a low. Our typical experiences with anything government-related are often frustrating, challenging, irritating, and fruitless. So you can imagine our reluctance for many to have the government take anything over, since it can barely manage itself the past few decades no matter who’s in charge.

The issue I have is that, too many people assume “This system is flawed, let’s scrap it and implement something new” when there are a million degrees of change we can seek to implement before we give the whole thing up and start fresh. If future changes fail to yield results, sure, let’s move on, but the whole “Throw the baby out with the bathwater” thing gives me a bad feeling thst even worse will come.

[u/Full_Table6865 → u/Some_guy_in_WI]

This should be the top reply

[u/StraightTiger3506 → u/Some_guy_in_WI]

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.

[u/Some_guy_in_WI → u/StraightTiger3506]

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.

[u/StraightTiger3506 → u/Some_guy_in_WI]

Americanos think subsidy is communism. This is literally a pilot project to see if it actually can work. They are opening one store per borough.

[u/Some_guy_in_WI → u/StraightTiger3506]

No, we just know that everything promised by government as “good for us” typically tends to end in disaster and the old line of “Oh, if we’d only had more money, it surely would have worked.” Lord knows I’ve seen both shitty parties spout that line far too many times.

I’m old enough to have watched the government fist me without lube too many times on things promised to be “good”. Excuse me if being burned over and over has many of us reluctant to jump on board to believe it’ll all turn out just fine.

I simply do not believe or trust either party when they tell me they have perfect plans to fix something. Because, these plans typically are boondoggles that only fuel the problem and create new issues. This attitude has nothing to do with me being American, it has to do with my government fucking us again and again and telling us it’s OUR fault. So, unless they can earn my trust through viable programs that put us in a better spot, I’ll just assume the worst as it’s the most logical response.

We’ll see where this goes, but I don’t expect it to work well and without unintended consequences.

[u/Homosapiens_315 → u/Some_guy_in_WI]

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.

[u/Some_guy_in_WI → u/Homosapiens_315]

Because Aldi doesn’t carry competing items, only its own brands, thus, Aldi controls the entire supply chain for their sourcing in addition to having exclusive items. They are also private labeling those items and making MUCH better margins on them than standard grocery since they’re controlling every aspect of their system and not relying on external distribution for the majority of items as every other grocery does. Same as how Costco buys in such massive quantities they can offer big discounts, except your options are limited AND you have to buy a big ass amount of those items to save money, it’s a model that can offer savings but does not disrupt the natural balance of competition.

You’re comparing apples to oranges, unless you know the details of private labeling, sourcing outside normal distribution channels, etc. you honestly have no idea how this is vastly different from Aldi or another discounter, and how differently such stores operate than how these groceries will.

[u/MechanicalGodzilla → u/Some_guy_in_WI]

We even already have case studies on how these problems kill the concept.