New Yorkers can untighten their belts by a couple of notches because Mayor Zohran Mamdani plans to save households 30% on their grocery bills. The Democratic Socialist leader is following through on his campaign commitment to open five city-owned grocery stores by 2029 to help residents who are struggling to stock their refrigerators. The intentions may be well and good, but the road to hell is often paved with empty shelves – and the mayor’s smile.
Aisle 9 From Mamdani Economics
Come one, come all! Mayor Mamdani’s municipal-owned supermarkets will sell a core basket of everyday groceries at 30% below retail to billionaires, the downtrodden, and the working class. It does not matter whether you own the means of production and enslave a boy named Oliver Twist or you are seeking a violent revolution against capitalism while recording it on your iPhone! Everyone will get the discount.
Anyone can visit one of five locations across the City That Never Sleeps and purchase fresh produce, meat, seafood, and 20 other categories of pantry staples, dairy, and refrigerator products. Discounts will apply to everyone, except perhaps Israeli Prime Minister Benjamin Netanyahu, who might be arrested if he steps foot in New York City.
What’s more, prices will be locked in! Even if the bird flu devastates the egg supply or a natural disaster destroys Brazil’s coffee beans, Mamdani’s grocery stores will be immune to the laws of supply and demand. The virtue of socialism is that you can slap the invisible hand of the free market and ignore the reality of day-to-day commerce.
City Hall is optimistic, projecting that New Yorkers’ average grocery bill will fall by 15%, or about $1,000 per year. It will indeed be a socialist paradise free from the repercussions of micromanaging the food supply.
“Every week, New Yorkers walk into a grocery store hoping the prices haven’t gone up again,” the mayor said in a statement. “A trip to the grocery store shouldn’t spell dread for New Yorkers. That’s why we are guaranteeing a 30% discount on the most common and most critical groceries for families across the five boroughs — including eggs, milk, chicken and fresh fruits and vegetables. In a city that’s defined by unpredictability, you deserve stability — no matter what aisle you’re in.”
Got Beef?
Now that the commercial is over, the reality is it will not succeed for various reasons.
The major supermarkets – Kroger, Trader Joe's, Aldi, Costco, and Walmart – already do an exceptional job of delivering the lowest possible prices to residents. They achieve this objective by operating on extremely thin profit margins of 1% to 2% after accounting for numerous overhead costs.
Has anyone seen the price of food over the last few years? Food categories within the Producer Price Index, the pipeline inflation indicator that measures prices paid by businesses for goods and passed on to consumers, have surged 30% since 2021. So, Mamdani plans to erase five years of inflation through his scheme.
It would also be comical if somebody scooped up all the discounted supplies and then sold them at the market price, creating an arbitrage opportunity or a black market.
At first, it will be a thriving business model. Who doesn’t want to save 30% on grocery bills? As a result, these stores will experience long lines, shoppers will flood the aisles, and customers will ransack the shelves to save double-digit percentages on beef and chicken. They will be unable to keep up with demand. This then threatens small-business entrepreneurs who own local markets and bodegas, as they will now compete with government-owned stores operating at negative margins while still paying market rents.
Mamdani will need a miracle, such as everyone across the supply chain trims costs by 30%.
In the end, all that New Yorkers will be left with is another grocery store always out of the bare essentials and funded by taxpayers. Across the country, various jurisdictions have experimented with government-run grocery stores, only to either shut down or resemble markets in Venezuela.
The only way this proposal will flourish is if Mamdani receives another bailout from Gov. Kathy Hochul (D), so he can visit the nearby Walmart and buy crates of eggs and bags of lettuce to sell at a discount.
It’s a Good Thing
Free-market advocates should cheer on Mayor Mamdani and the Democratic Socialists, much as you would a toddler who is likely to fall on his rear-end while swinging at a T-ball. Since young socialists repeatedly howl that the ideas expressed by Karl Marx and his disciples have never been tried, this is a perfect crash course in economics. Instead of lecturing these kids again and again, they can see for themselves why every incarnation of socialism never works.
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