New York City Mayor Zohran Mamdani's administration is facing a new federal lawsuit challenging its plan to open taxpayer-subsidized grocery stores, with plaintiffs alleging the initiative violates antitrust laws.
The National Supermarket Association, along with two of its member businesses—City Fresh Market in Harlem and C-Town Supermarket in the Bronx—are filing the suit in the Southern District of New York. They argue that millions of dollars in city subsidies for Mamdani's five proposed public supermarkets constitute unfair competition against existing independent grocery stores.
"We are arguing that everyone has to be able to access these subsidies," said Anthony Peña, president of the National Supermarket Association, which represents 450 independent grocery stores in the city. "It’s not about us being afraid of competition. We are against unfair competition."
The lawsuit is being filed with the America First Policy Institute, a conservative nonprofit chaired by Larry Kudlow, a former top economic advisor to President Trump.
This marks the second major legal challenge to the mayor's plan. Under Mamdani's initiative, the new public stores are intended to operate rent-free and sell essential items at prices at least 30% lower than neighboring shops, including small bodegas. In August, the Multicultural Business Coalition, comprising 50 chambers of commerce for ethnically diverse businesses in New York City, filed two state court lawsuits asserting that the municipal stores would violate business owners' civil rights.
City Fresh Market, located a block away from one of the proposed store locations, is slated to be a plaintiff. The mayor's plan includes a 9,000-square-foot store at La Marqueta for an estimated $30 million in taxpayer funding. "Independent supermarkets have invested in our neighborhoods, created jobs, paid taxes and served local families for generations," Peña stated. "They deserve a fair and level playing field—not competition against a government-subsidized program operating under different rules."
Mamdani's grocery store initiative is part of his broader strategy to enhance the city's affordability, a key component of his 2025 campaign platform.
The first public grocery store is expected to open next year in the Bronx's Hunts Point neighborhood, situated near the C-Town Supermarket that plans to join the lawsuit. The Harlem store is scheduled to open in 2029, while opening dates for stores in Brooklyn, Queens, and Staten Island have not yet been disclosed.
Earlier, an official from the New York City Economic Development Corporation suggested the city might offer grants to businesses affected by the new stores, a statement that was quickly walked back. A spokesperson later clarified that while grant programs are not under consideration, the city is exploring potential tax abatements, incentives, and zoning benefits through existing programs to mitigate cost pressures for small businesses.
Mamdani has expressed confidence in the legality of the public grocery store plan, stating, "I’m confident both in the legality of this, that it will stand up in court and the importance of delivering it."