New York City Mayor Zohran Mamdani’s plan to open city-owned grocery stores is drawing criticism from economists and local business owners who warn the proposal could hurt small grocers while costing taxpayers millions.
The initiative was one of Mamdani’s major campaign promises. His administration says city-backed supermarkets could help lower food costs for residents in neighborhoods where grocery access is limited or expensive.
But critics argue that the city should not be in the business of running grocery stores.
Adam Lehodey of the Manhattan Institute called the plan a wasteful distraction and said New York could address food affordability more effectively through private-sector partnerships and existing assistance programs.
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The first city-backed grocery location is expected to open in 2027 in Hunts Point in the Bronx. It would be part of The Peninsula redevelopment project at the former Spofford Juvenile Detention Facility.
That larger project includes affordable housing, public open space, light industrial space and community facilities. The grocery market would take up about 20,000 square feet and is intended to serve residents in the South Bronx.
Supporters say the store could help families struggling with high food prices. But critics say taxpayer-backed stores could undercut small businesses that already operate on thin margins.
Lehodey warned that if city-backed stores are able to offer lower prices because of public support, private grocers nearby could struggle to compete.
He also argued that the city is giving up valuable land and potential revenue by using public resources to subsidize grocery projects.
A second city-backed grocery market is planned for La Marqueta in East Harlem. That location is expected to open next year and could cost about $30 million to build.
Critics question whether the East Harlem site is necessary, noting that the surrounding area already has many grocery stores, bodegas and markets within walking or transit distance.
Some local store owners say they are worried the new city-backed market could take customers away from existing businesses.
Sarah Kang, a manager at a CTown Supermarkets location south of La Marqueta, said customers who currently walk or take the subway to her store may choose a cheaper city-supported option instead.
Other grocers said the impact may depend on how close their stores are to the new market, but they acknowledged that smaller businesses near the site could be affected.
Bodegas and small grocery stores have long been a key part of New York City neighborhoods, often serving residents who rely on nearby stores for daily food shopping.
Similar government-backed grocery proposals have been discussed in other U.S. cities, including Boston. Atlanta has already opened a city-backed grocery store aimed at improving food access in underserved communities.
The debate in New York highlights a larger question: whether city government should directly operate grocery stores or focus on helping existing businesses and residents through other programs.
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“Reagan said the 9 most terrifying words in English are I’m from the government and I’m here to help…I disagree! 9 more… pic.twitter.com/BewWw4xFSV
— Eric Daugherty (@EricLDaugh) May 18, 2026
