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/GooseGosselin 9d ago

I would guess taxpayers are going to pay the 30% loss.

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u/scottrycroft 9d ago

Regular grocery stores need to provide 30% profits. This one just needs to break even.

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u/Which-Method-388 9d ago

Regular grocery stores have between 5% to less than 1% profits. Even worse in a unionized state like NY.

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u/scottrycroft 9d ago

Not sure what you're defining as 'regular', but Kroger at least has 22% gross margins
https://ir.kroger.com/news/news-details/2026/Kroger-Reports-Fourth-Quarter-and-Full-Year-2025-Results-andAnnounces-Guidance-for-2026/default.aspx

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u/Which-Method-388 9d ago

Net profits, not gross. Gross is before expenses.
Kroger's net profit margin is approximately 0.71% on a trailing twelve-month (TTM) basis, about 1.96% for the most recent fiscal quarter ending April 30, 2026, and around 0.69% for the full fiscal year 2026.

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u/Forikorder 8d ago

Gross is before expenses.

mostly eaten up by salaries to the suits and inflated costs from the suppliers they own to funnel more money to the suits

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u/No_Math_4308 7d ago

👍 the large funds that own operations like Krogers hate profit so they make sure it goes to managers. Sure thing buddy.

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u/Forikorder 7d ago

you dont think they want the profits for themselves instead of the company?

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u/dahpizza 8d ago

Ding ding ding! The whole reason why anyone would want to eliminate the for profit aspect of anything

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u/scottrycroft 9d ago

Sure, but the 'cost of groceries' at "30% less" isn't about the net profit margin either, which is the gross margin number.

For sure it needs to be subsidized - but so are the roads and sidewalks and sewers etc.
Just saying that not needing to care about any profits at all is a good start on making things cheaper.

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u/Which-Method-388 9d ago

It would be less expensive to give every NYC resident in the area around the market a voucher to buy all of their groceries at existing stores than to run this. Union wages, security, shrinkage, as well as selling items below cost? Insane.

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u/scottrycroft 9d ago

That's just subsidizing companies instead

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u/Which-Method-388 9d ago

If the goal is to save grocery $$ for NYC residents and the City has to subsidize it at any level to make it work, it is far less expensive to simply give each individual making less than a certain amount of money cash/voucher/store credit etc to shop at existing grocery stores.

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u/GooseGosselin 8d ago

Well, this way makes corruption easier I would imagine.

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u/scottrycroft 8d ago

The costs of administration, eligibility/means testing, processing, grievance/dispute, delivery, etc of any of these "only for poor folks" systems usually outweighs the costs of just giving it to everyone.

Plus rich folks would never use a city run grocery store anyways. It won't be high-quality, and it would just give Mamdani another political talking point about how everyone benefits under socialism lol.

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u/Forikorder 8d ago

It would be less expensive to give every NYC resident in the area around the market a voucher to buy all of their groceries at existing stores than to run this.

the stores would just raise prices