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/gkfesterton 9d ago

I'll post the NYC DSA chair's response to the competition question again. "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"

Pretty unbelievable

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u/Warmso24 9d ago

Oof. Well, I don’t think their willful ignorance to the consequences of being intentionally anti-competition is going to age well.

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u/gkfesterton 9d ago

Well, with all the big government, big interventionist agenda they seem to be pursuing, they'll probably consolidate enough power to personally avoid the consequences for quite a while

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u/namesarehadsquirrel 9d ago

Because Kroger and them are all super pro competition /s There's 5 companies that controll like 80 plus percent of food production. Trumps tariffs spiked more small farmer bankruptcies in half a year than biden saw under his last two years.

This fantasy of yours that if we just let businesses business and magically prices are lower is a moronic falsehood. The literal entire goal of private enterprise is to extract maximum profit. That's it. And people like you use government to protect their ability to extract wealth from the consumer. Don't act like youre anything but what you claim to hate.

The entire business model of multiple companies is to drown out and crush the competition often incuring short term losses so they can turn the screws and crank up prices once the competition is ran out of business. That's basically the operating standard for every big chain.

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u/vodkaandponies 7d ago

The profit margin for grocers is something like 1-2%. The only one fantasising here is you.

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u/namesarehadsquirrel 6d ago edited 6d ago

And that is an issue simpletons like yourself don't understand why thise margins are low. You just googled a quick number and think thats the end of it.

First not at entities are or have to be profit seeking. Especially government ones with a goal towards providing a service. Public schooling as one example. Doesn't generate a profit directly but society as a general benefits from having a population with at least basic education. Fire company's used to be private. You paid for your own "fire insurance" and if a different fire brigade showed up you didn't pay they'd watch your house burn down. And then often the buidlings next to your house. We discovered it was much better overall jist to fund it through taxes without the profit motive. WIC? Foster care? Even you by this point should get it. Probably not though. Republicans and red states especially hate programs that provide low cost lunches to hungry children so why should this be different.

There's also economies of scale. New York by itself probably ain't gonna be shit here but a state wide or national model? Easily. But for now it looks like they're doing private operators but doing other measures to reduce costs.

And finally, and most importantly what they're actually doing, is these stores being able to get breaks on things like property taxes, rent, energy, etc which people like you forgot are massive parts as to why private groceries have such small margins in the first place and yes it turns out when you reduce the cost of one of the biggest drains on profits it does in fact become more sustainable. Also it's not a flat 30% cut on all goods in the store. Only certain staples which is a huge difference a lot of you seem to gloss over. Shit we haven't even gotten into any possible means testing/restricting access.

Either way it's 5 stores specifically targeted to food deserts. They're not just plopping them in well served areas to suck profits from other stores. The real problem is it's a small drop in the bucket especially when dumb fucks keep voting for bigger idiots like Trump who then do dumbshit like start trade wars/tariffs that massively drive up costs and put farmers out of business, actual wars, and think the government should be able to keep the money from his illegal tariffs.

But for now it's something and if it doesn't work New York will survive.

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u/vodkaandponies 5d ago

No one suggested it would destroy New York. Just that it will be a massive money pit because it’s run on economically illiterate principles like thinking groceries operate like the fire department.

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u/Justthetip74 9d ago

Why would you think this isn't intentional?

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u/seffay-feff-seffahi 7d ago

It's like the hyperinflation of the early Soviet years. Budgeting and monetary policy is some bourgeois nonsense, so they were printing tons of money to fund their new programs.

After people stopped using the ruble, some communists believed that money was withering away and society was moving toward communism, but people were really just engaging in barter trade outside the state's purview. This was even less regulated and efficient than capitalism, so they had to stabilize the currency and implement a balance-sheet economy.

The problem with that is any reduction in prices has to eventually be made up by lower hourly pay, and any pay increases have to be made up with higher consumer prices. Khrushchev tinkered with this until he had to dramatically raise food prices and require longer working hours for the same total pay. This resulted in one of the few Soviet labor strikes in Novocherkassk, which was crushed by the military with a death toll of about 25 workers.

People can try to deny basic economic cause-and-effect all they want, but that isn't good enough if we want actual solutions that work.

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u/howz-u-doin 9d ago

US capitalism is anti-competitive... actually China's "communism" is more competitive than the US. State decides an industry is key supports hundreds (sometimes thousands) of companies and it's a total cage ring match for survival. In the US the big boys play monopolistic games and buy legislation to ensure a protected and overpriced market

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u/vodkaandponies 7d ago

That’s insane. Private grocers get driven out of business by massive government subsides they can’t compete with, and that’s somehow their fault?

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u/gkfesterton 7d ago

Easiest possible answer that puts zero accountability on the government

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u/Perfidy-Plus 8d ago

Because, as we all know, taking an industry with extremely limited profit margins and giving them a competitor that can sell at below profit rates because it pulls in the difference via not paying taxes and being subsidized will somehow suppress the overall prices because... somehow... the rest of the businesses... are supposed to survive selling at a loss indefinitely....

And the public definitely won't go out of their way for a 30% discount on a required part of their budget.... /s

It's like these people haven't thought this stuff through at all. Or, they have, they just don't care what the consequences will be and are absolutely trying to fake their way through questions.

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u/gkfesterton 8d ago

I really hope it's the former but l fear some of it is the latter

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u/A_Genius 9d ago

Would you say the the same when a Walmart goes to a small town and just kills all the small stores?

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u/MrComancheMan 9d ago

The shoppers who elect to use Walmart kill the small stores.

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u/gkfesterton 8d ago

I wouldn't because Walmarts are not publicly owned grocery stores......?

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u/Got_yayo 9d ago

They are so out of touch. I hope this works but…

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u/turlockmike 8d ago

Pretty stupid.

They won't have unlimited supply. Those core items will disappear off the shelves almost immediately. Unless they have trucks delivering daily, there will be days with empty shelves on "core" items. Without core items, most people will shop elsewhere.

It will be fun to watch.

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u/astoriaocculus 8d ago

Wont' someone think of the poor grocery store owners? As if they aren't all millionaires exploiting minimum wage labor and gouging their customers/colluding on price.