New York City Mayor Zohran Mamdani's plan to establish five city-run grocery stores has drawn criticism from John Catsimatidis, the CEO of the local supermarket chain Gristedes. Catsimatidis argues the initiative, which includes a $70 million capital budget and aims to offer a 30% discount on a core basket of groceries, could harm existing bodegas and supermarkets.
Mamdani announced the plan in July, with the first store slated to open in Hunts Point, the Bronx, by late 2027, and all five intended to be operational before his term ends in 2030. The administration stated the goal is to combat the city's affordability crisis, with Mamdani noting that "a trip to the grocery store shouldn’t spell dread for New Yorkers."
However, Catsimatidis expressed concern that the city's subsidy of property taxes and rental costs for these new stores would create an unfair advantage. "The people that are going to run those five stores are not going to pay any real estate taxes. Not going to pay any rent," Catsimatidis said in an interview. "If I don’t pay any rent or real estate taxes, I can bring down the cost of a product 20% across the board."
He further suggested that the city would be competing against its own citizens, a model he associates with socialist countries. Catsimatidis pointed to other rising costs faced by businesses in New York City, such as congestion pricing and increased electricity expenses, which he believes are already straining independent operators. He noted that these factors, combined with competition from online vendors, contribute to the slim profit margins—typically 1% to 3%—for average grocery stores.
"The big picture is that five stores in five boroughs is only good for public relations, and it's not really going to help the hungry," Catsimatidis stated. He suggested that instead of direct competition, the city could offer tax credits to existing businesses to help them lower prices.
While Catsimatidis voiced these concerns, Nevin Cohen, director of the CUNY Urban Food Policy Institute, highlighted the significant issue of food insecurity in the city. Cohen noted that 1.4 million New Yorkers are food insecure and that 20% rely on SNAP benefits. He also mentioned the existing "FRESH" program, which uses tax and zoning incentives to encourage supermarkets in underserved areas. The city is currently seeking private operators to manage the logistics of the new stores.