Within the not too long ago concluded Democratic major for New York Metropolis mayor, state Assemblymember Zohran Mamdani emerged victorious, beating out former Gov. Andrew Cuomo, amongst others, for the nomination.
One proposal that galvanized each supporters and opponents was Mamdani’s plan to open 5 city-owned grocery shops—one in every borough. In a marketing campaign video, he referred to as the shops a “public choice” like in well being care; he stated they’d not pay hire or property taxes, they’d “function and not using a revenue motive,” and their “mission [would be] decrease costs, not worth gouging.” (As of January 2025, the grocery trade’s common internet revenue margin was underneath 2 p.c.)
Some have come to Mamdani’s protection, saying city-owned grocery shops are usually not as radical as they sound—the truth is, some states have already got them, with out turning into socialist hellscapes. Some have in contrast this plan to states that management liquor gross sales. However in every case, the comparability is unflattering to Mamdani’s proposal.
“5 metropolis owned grocery shops is just not that a lot,” progressive commentator Zaid Jilani wrote on X. “Kansas and Florida have cities with city-owned grocery shops.”
Jilani’s examples are underwhelming: The town council in Erie, Kansas, bought town’s solely grocery retailer in 2020 slightly than let it shut. The town operated the Erie Marketplace for years however at a loss: Erie’s mayor stated the typical buyer wanted to spend $50 per 30 days for the shop to remain afloat, however the precise month-to-month expenditure was nearer to $14. Final 12 months, Erie leased out the shop to be run by a personal firm.
The city of Little River, Kansas, additionally has a city-owned grocery retailer, although the city solely owns the constructing and its refrigeration system; the shop itself is privately owned and operated.
Baldwin, Florida, opened a totally government-owned grocery retailer in 2019 after the city’s solely grocer closed the earlier 12 months. The city already owned the location, having bought the lot and funded the constructing’s building a decade earlier in an try to woo a grocer to city.
“We’re not attempting to make a revenue,” Mayor Sean Lynch, a Republican, instructed The Washington Publish when Baldwin Market opened. “We’re attempting to cowl our bills, and preserve the shop operating.”
The shop closed in 2024 after being in enterprise for lower than 5 years. “The town-run retailer,” The Florida Occasions-Union wrote on the time, “has struggled for years…to achieve the break-even level.”
Citing Lynch, researchers at Vanderbilt College discovered, “that the dearth of ‘shopping for energy’ harms native grocery shops as they compete for purchasers with Wal-Mart and different big-box grocers, who can provide a lot decrease costs. Even with solely needing to interrupt even, Baldwin Market nonetheless feels the strain from these grocers. Whereas these big-box grocers should additionally steadiness income, they will decrease their prices for shoppers by tapping into these bigger distribution networks. Due to this bottom-line distinction in product prices, some residents nonetheless select to make the longer commute and store at a retailer ten miles outdoors of city.”
It is price noting that within the above examples, governments stepped in when a small city’s solely grocery retailer went out of enterprise. It makes even much less sense in a metropolis like New York, with 1,000 grocery shops serving 8.5 million folks—a ratio of 8,500-to-1, the place grocers sometimes see 15,000-to-1 as a viable market.
A government-run grocery retailer would face related issues, struggling to interrupt even regardless of taxpayer backing, whereas possible not offering a significant benefit over the established order.
Others have argued in protection of Mamdani’s proposal by pointing to the variety of liquor management states, during which the federal government handles the sale and distribution of all arduous alcohol throughout the state.
“I do not know if public grocer is a superb concept in apply, however my county runs all of the liquor shops and wholesale distribution and [Mamdani’s] plan is mainly only a pilot program,” Benjy Sarlin, opinion editor at The Washington Publish, wrote in a submit on X. (Sarlin famous in a later submit that whereas a state liquor monopoly might not be nice in apply, “it is within the realm of coverage proposed by normie politicians and never simply socialist politicians.”)
“Seventeen states have state run liquor shops, together with Alabama, West Virginia, New Hampshire, and Montana. Nobody thinks these are socialist states,” Aeon editor Sam Haselby added. “Individuals want some perspective.”
This instance, too, would not maintain as much as scrutiny. Certainly, 17 states, plus localities in 4 others—accounting for practically 25 p.c of the overall inhabitants and an identical share of all U.S. liquor gross sales—are management states. Sarlin appeared to confer with Virginia, the place the state authorities operates greater than 400 liquor shops.
However solely seven of the 17 management states really personal and function their very own shops; the opposite 10 “pull the strings from on excessive, promoting a number of spirits to all personal distributors,” and “set[ting] minimal prices, basically dictating costs on the buyer stage,” in line with Thrillist.
The result’s no shock: “Monopoly of alcohol shops seems to be related to barely greater liquor costs,” in line with a 2014 research. “Solely 5 manufacturers had been at the least 10% costlier in license states, whereas 27 manufacturers had been at the least 10% costlier in management states.”
State-run liquor shops additionally serve a really completely different goal than grocery shops, and even from liquor shops in non-control states.
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“Residents of management states eat 14% much less spirits and seven% much less complete alcohol than residents of license states,” brags Alcohol Justice, which advocates in opposition to the alcohol trade.
Almost 4 a long time in the past, Iowa gave up its liquor retailer monopoly, sustaining management over distribution however ceding gross sales to privately owned shops. On the time, officers had been clear about what the aim had been: “Iowa’s state-owned shops had been initially established in out-of-the-way locations the place they had been arduous to seek out,” The New York Occasions wrote in 1986. “They had been put there deliberately to maintain folks from consuming,” Rolland Gallagher, head of the Iowa Beer and Liquor Management Division, stated on the time.
Granted, any mannequin for a government-run grocery retailer would inherently be completely different from a liquor retailer: Not like management states, no one intends for a grocery retailer to restrict the quantity of groceries that individuals purchase. And even underneath Mamdani’s proposal, personal grocery shops wouldn’t be banned. “Mamdani is not proposing to expropriate the capitalist grocers and make privately owned grocery shops unlawful,” Haselby added in a subsequent submit.
Nonetheless, the rules stay the identical: State liquor shops are costlier than non-state-run shops—which is a characteristic, not a bug. A government-run grocery retailer with greater costs could be the worst of each worlds.
Authorities-run retail institutions are inherently much less environment friendly than their private-sector counterparts. “Public choices” like Mamdani advocates do not need to make a revenue and might rely on taxpayer cash to prop up any losses. For an trade like grocery shops, which have already got razor skinny revenue margins, a publicly-funded competitor could be a foul deal for New Yorkers.
