A coalition of grocery store owners has filed a federal antitrust lawsuit to block New York City's plan to establish city-owned supermarkets, arguing the initiative would lead to unfair competition and predatory pricing. The National Supermarket Association (NSA) filed the suit on Wednesday in the U.S. Southern District of New York, seeking to halt a city bidding process for an operator of the municipal stores until the legality of the program is determined.
The lawsuit contends that the city would use its properties to eliminate occupancy costs and exempt the stores from taxes, enabling them to undercut nearby private businesses through permanent discounts. Plaintiffs assert that this strategy amounts to predatory pricing, as the city-subsidized stores could continuously lower prices due to their cost advantages.
"There’s a good grocery store here today," said Jerry Nunez, owner of City Fresh Market in Harlem, one of the plaintiffs. "Our customers support it, and 50 people have jobs because of it. Why should the city put all of that at risk?"
Rafael Nunez, owner of C-Town Supermarket in the Bronx, echoed these concerns. "We pay high rent, taxes, insurance and energy costs," he said of his store, which has operated for 42 years. "We were here when this neighborhood was struggling. Now that the neighborhood has come back, I don’t think the city should use taxpayer money to make it harder for the businesses that helped it get here."
The city administration, led by Mayor Mamdani, maintains that the NYC Groceries initiative is essential for affordability and community access. "The Mamdani administration designed the NYC Groceries initiative to ensure that the stores we open serve the communities where they are located," a spokesperson for the mayor stated. "By the end of the mayor’s first term, every borough will have a high-quality, affordable grocery store that New Yorkers can count on. We remain confident in both the legality and the necessity of NYC Groceries."
The complaint was filed on behalf of the NSA and two grocers by attorneys from the America First Policy Institute. The suit asks the court to delay the city's bidding process, which currently has bids due on October 16. The plaintiffs seek a ruling before any operator is selected, noting that a winning bidder could face future lawsuits if the court ultimately rules against the city's plan.
William Kovacic, a law professor at George Washington University and former chair of the Federal Trade Commission, explained that if the plaintiffs succeed in obtaining an injunction, it would delay the program's rollout. Kovacic also noted that the city would need to demonstrate state authorization for the program to defend against antitrust claims.
The first municipal store is scheduled to open in the Bronx next year, with a Harlem location slated for 2029. Dates for stores in Brooklyn, Queens, and Staten Island have not yet been announced.
This federal lawsuit follows a separate suit filed last month in state court by the Multicultural Business Coalition, a group representing immigrant-owned grocers, which also challenges the city's grocery store program, alleging discrimination.