New York City mayoral candidate Zohran Mamdani is facing sharp criticism from economists over his proposal to launch city-owned grocery stores that would offer shoppers a 30% discount on a core basket of everyday items. Experts argue the plan would not deliver the promised savings without massive taxpayer subsidies and could distort the local food market.
Mamdani’s campaign says the initiative would save the average New Yorker about $1,000 per year by keeping grocery costs predictable and stable. Under the plan, the city would open five municipal grocery stores — one in each borough — starting with a location in Hunts Point in the Bronx by the end of 2027. Additional stores are planned for East Harlem, Brooklyn, Queens, and Staten Island within the candidate’s first term if elected. The stores would be run by private operators under contract, but the city would own the buildings, cover rent and property taxes, and set pricing requirements.
City Hall has allocated $70 million in capital funding for the project. A core basket of groceries — including fresh produce, meat, seafood, dairy, and pantry staples — would have prices locked monthly rather than fluctuating week to week. Mamdani’s office announced that the discount would amount to roughly $90 in monthly savings per visitor.
Economists, however, are raising red flags about the math. Richard Stern, vice president of the Plymouth Institute for Free Enterprise at Advancing American Freedom, told Fox News Digital that the proposal ultimately relies on taxpayer dollars to make up the difference between the discounted prices and the cost of operating the stores. «They’re just going to use New York City budget money to insure the discount,» Stern said.
Adam Lehodey, a policy analyst at the Manhattan Institute, went further, calling the 30% savings an illusion. «Taxpayers will foot the bill for millions of dollars in subsidies, and they will operate on government-owned land with rents waived. New Yorkers will still be paying the full price, just indirectly,» Lehodey said. He also warned that pricing groceries well below market rates could create unintended consequences, including people buying goods to resell elsewhere, as well as shortages driven by artificially low prices.
E.J. Antoni, chief economist at the Heritage Foundation, noted that grocery stores already operate on razor-thin profit margins, typically around 2%. «A 30% discount at stores with a 2% profit margin is simply a loss for taxpayers who will have to make up the difference,» Antoni said. He also argued that the proposal would hurt small businesses, which would lose sales to taxpayer-subsidized competitors.
The criticism comes as policymakers continue to grapple with the lasting effects of inflation on household budgets. Bureau of Labor Statistics data show that food-at-home prices have climbed significantly since 2019, with most major grocery categories remaining more expensive than they were before the pandemic. Mamdani’s plan attempts to address that burden directly, but experts question whether government ownership is the right solution.
Mamdani’s office did not immediately respond to questions from Fox News Digital about how the administration calculated the projected 30% discount, whether independent economists reviewed its financial assumptions, or how much ongoing taxpayer support would be required to sustain the stores. The proposal, while still in its early stages, is already drawing attention as a major policy plank in the crowded Democratic mayoral primary.
Supporters of the plan argue that by eliminating major overhead costs — such as rent and property taxes — the city can pass savings directly to consumers. They also point to the success of similar public market models in other cities. But the lack of independent financial analysis and the magnitude of the promised discount have left many economists skeptical about whether the numbers can hold up without significant and ongoing public investment.