Economists and business leaders are sounding alarms over New York City mayoral candidate Zohran Mamdani’s plan to roll out city-owned grocery stores that he says will lower food costs.
“You don’t lower grocery bills by having government-run stores,” Ryan Bourne, a top economist at the libertarian leaning Cato Institute think tank, told Fox Business. “Government-run entities have no market discipline — no need to earn profits, compete, or serve customers efficiently. That leads to bloated costs, empty shelves, and zero accountability.”
Bourne called Mamdani’s city-run grocery stores “the height of political hubris” by failing to acknowledge that grocers operate in competitive arenas and on razor-thin profit margins.
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“If we just do the simple math here, there’s no way you can sell these products at lower prices and still make money,” said E.J. Antoni, chief economist at the conservative leaning Heritage Foundation think tank.
“The other problem is that if he (Mamdani) is selling things substantially less than the private market, who is going to want to go to the private market? Everyone is going to want to go to these grocery stores,” Antoni told Fox Business, adding that the city-run grocery stores have the potential to exacerbate food shortages in New York City.
Mamdani, the underdog winner of Tuesday’s Democratic mayoral primary, has placed affordability at the forefront of his campaign to helm America’s largest city.
The 33-year-old says the public grocery stores will be exempt from paying rent or property taxes, a move aimed at lowering overhead costs. Other efforts to pass on savings to shoppers include buying at wholesale prices, partnerships with local farms on product sourcing and centralizing warehouses and supply chain distribution.
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The socialist upstart says it will cost a total of $60 million to launch one grocery store in each of New York City’s five boroughs. Mamdani has previously said he will redirect some of the $140 million in private grocery store tax breaks to finance the pilot program.
“If the government is going to make it impossible for the private market to compete, then the private market will stop competing. If you make it unprofitable for a grocer to do business in Manhattan, then people like John Catsimatidis are going to pull the plug,” Antoni said, referencing the billionaire supermarket magnate.
In an interview with Fox Business, Catsimatidis said retail food was the toughest company in his Red Apple Group portfolio, which also includes real estate, energy and insurance assets.
“If the city of New York is going socialist, I will definitely close, or sell, or move or franchise the Gristedes locations,” he said. Catsimatidis, a high-profile political donor in conservative circles, operates more than 15 Gristedes and nearly a dozen D’Agostino grocery stores in Manhattan.
“It’s going to hurt New York,” Catsimatidis said of Mamdani’s economic agenda should he win the November general election. He added that he is considering moving his corporate offices to New Jersey if that happens.
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What’s more, Wall Street executives have emerged as some of the loudest critics of Mamdani’s economic agenda, which also includes free buses and rent freezes for residents in rent-stabilized units.
Billionaire hedge fund manager Bill Ackman pledged to finance an alternative candidate to Mamdani, should one emerge. He also warned that Mamdani’s financial plan would “destroy jobs and cause businesses and wealthy taxpayers” to leave New York.
“Socialism has no place in the economic capital of our country,” the Pershing Square chief wrote in a post on X.
“We have two choices, which is to support Mamdani and try to get on his good side, or try to see if we can resurrect Eric,” Jeff Gural, chair of GFP Real Estate, told Bloomberg, referring to New York City’s current mayor.
Gural, who has donated to Andrew Cuomo’s PAC, added that he would “certainly” prefer Adams over Mamdani.
Dan Loeb, the hedge fund founder of Third Point, wrote following Mamdani’s win on X that it was “officially hot commie summer.” Loeb has previously donated to super PACs supporting Adams and Cuomo.
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“As the weeks go on, Mamdani’s going to be ripped to pieces,” FOX Business’ Larry Kudlow said Friday.
“Before it’s over, a lot of the younger people will realize that he will financially bankrupt us, and they’ll lose their jobs, and I think he’ll lose them too,” added Kudlow, who served as White House economic advisor during President Donald Trump’s first year.
The three-term assembly member says the city-run grocery stores will not only address rising food prices, but food deserts.
Mamdani, whose district includes the Queensbridge Houses, the largest public housing project in North America, says residents there have called for low-cost grocery options.
“What I hear from so many of my constituents there is, ‘Why is it that there are five or six fast food restaurants in a five-block radius, but I can’t find anywhere where I can actually afford to buy groceries?’” he said in an interview with Bon Appétit.
“What this network of municipally-owned grocery stores would provide is a guarantee of cheaper groceries and a recognition that food is a non-negotiable for New Yorkers,” he added.
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Chicago Mayor Brandon Johnson proposed opening a city-run grocery store in 2023 to deal with food insecurity in the Windy City. His administration sidelined the project but recently announced a city-run public food market as an alternative, according to the Chicago Tribune. Meanwhile, Atlanta Mayor Andre Dickens is set to open the city’s first municipally subsidized grocery store in 2026.
“Cooperative grocery stores are a feature of many American communities; they provide competition to for-profit groceries and this helps to lower costs for everyone,” James Galbraith, an economics professor at the University of Texas at Austin, told Fox Business. “Mr. Mamdani’s proposal seems comparable; obviously it resonated with New York voters on Tuesday.”
Mamdani’s campaign did not respond to Fox Business’ request for comment.
Judge Glock, the director of research and a senior fellow at the Manhattan Institute, told Fox Business that Mamdani could expand food stamps or the SNAP program in order to address “concerns about the unaffordability of food for some families.”
“But running a grocery store is a famously low-margin business for which the city could not realistically find any excess profit to squeeze,” Glock added.
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