Mamdani’s city-owned supermarkets will fight the one force no city has ever beaten: the market

Zohran Mamdani stormed into office brandishing the banner of “affordability,” and almost singlehandedly pushed the issue to the center of today’s political debate. Of all the charismatic, 34-year-old Mayor’s initiatives aimed at lowering living costs, the one that’s garnered the most coverage is his proposal to get Gotham into the grocery business.

The city-owned food store initiative looks so radical, even for this avowed democratic socialist, because it puts a city in direct competition versus an immense, entrenched private industry. On his other big “affordability” initiatives, providing free bus service and freezing rent on one million apartments, Mamdani’s simply using his regulatory and budget powers in the Democratic mayors’ traditional vein of tightening price controls on housing and delivering more freebees

This one’s different: It’s extraordinarily rare for a municipality to challenge local businesses by starting its own enterprises that aim to do the same thing. The only major example: city-backed companies that battle the Verizons and Comcasts to supply broadband. They’re all either struggling, or already flopped. Mamdani’s predecessor Eric Adams shuttered the $2 billion fiber-optic buildout started a few years earlier under Mayor Bill de Blasio. As for supermarkets, Chicago last year killed plans for a city-owned emporium as impractical. Kansas City, apparently the only major metro ever to open a taxpayer-funded supermarket, ended the failed foray in early 2025.

Hence, Mamdani’s plan would probably reign as the biggest push any city’s ever made to launch its own business amid a galaxy of private players. The Mayor’s identified a big problem. New Yorkers indeed suffer from extremely high prices for everything from chicken to eggs to milk. The city’s riddled with “food desert” neighborhoods where residents often can’t find much other than processed items nearby, and must travel 20 minutes or more to reach outlets that offer wide choices of fresh foods at low cost.

But that problem’s almost totally self-inflicted. Contrary to Mamdani’s claim that “the private market alone has not delivered affordable, full-service grocery options,” here’s the real rub: A web of antiquated regulations—and one in particular that effectively bans big stores where they’re needed most—is blocking major chains from deploying billions of their own capital to open far more of the kinds of giant extravaganzas featuring baseball-field length stretches of checkout lanes that bring far lower stickers to the suburbs just beyond Gotham’s borders.

In fact, the Mamdani “solution” would make things much worse by providing rich subsidies enabling his stores to underprice private markets in the same area, potentially forcing them to close. That outcome would extend the deserts as stalwarts exit and the ones that remain raise prices. What New York needs isn’t city stores that threaten the often already struggling purveyors already here, but sweeping deregulation that encourages the entry of what consumer crave, far more supersized supermarkets that offer the widest choices and best prices..

As Mitchell Korbey, chair of the zoning group at Herrick, Feinstein, LLP, who’s represented many large chains in their efforts to establish stores in New York, told Fortune, “Many new, large supermarkets would open if the city would lift the rules that have long outlived their usefulness.” Adds E.J. Antoni, an economist at the Heritage Foundation, “New York is really unaffordable by design, not as a natural outcome of the free market. Its zoning regulations create artificial monopolies that reduce competition and limit what would without those rules be far more and better places for people shop.”

Mamdani plans five city-owned stores offering super-cheap prices for family essentials

The mayor’s rationale: Grocery prices have jumped 30% since the onset of the pandemic, so the City will reverse that hit by allowing residents to purchase a basic shopping cart of goods 30% cheaper. The........

© Fortune