The Real Reasons New Yorkers’ Groceries Cost So Much

The first few days of 2026, as Zohran Mamdani’s term as mayor began, were frigid. Returning home after a trip, I came home to an empty fridge. Rather than brave the sub-zero temperatures to bike to the Wegmans at the Brooklyn Navy Yard like I normally do, I walked to my local CTown grocery store to stock up. What I found was something New Yorkers have long griped about from our local chains: shockingly high prices.

What first caught my eye were the price of four kiwis (organic, gold): $9.99 at the CTown, compared to $6.99 at Whole Foods. Then I started looking for my less extravagant staples — a pound of chicken thighs was $9.99 at the CTown, while the same exact brand goes for $6.79 at Wegmans; bananas that are $0.79 a pound at Wegmans are $1.29 at the CTown.

Mamdani rode to the mayorship thanks to a relentless focus on affordability, promising to freeze the rent in stabilized units and make the buses free. And so it went with groceries too: “As mayor, I will create a network for city-owned grocery stores,” he said in a TikTok video posted after launching his primary campaign in 2024, “whose mission is lower prices, not price gouging.” He proposed to start with a pilot program of one city-owned grocery store per borough. 

Mamdani has identified a real issue, but his proposed solution is unresponsive to the problem. There are few examples of government-run grocery stores in the U.S., and the skills that it would take to even act as a landlord to one are not ones that New York City is known for. Libraries routinely clock in at $2,000 or more per square foot to build or renovate, and the New York City Housing Authority’s buildings are full of empty storefronts. The City would struggle to resist pressure by unions to agree to less productive practices and to pay higher wages than in most of the private sector, as it has even in its current role simply permitting grocery stores.

Other politicians have proposed to tackle the problem of high costs at independent grocers through local antitrust policy. Operating on the theory that when big chains get cheaper wholesale food prices, they place smaller, locally owned supermarkets at a disadvantage not justified by their scale, a bill in the state legislature would force wholesalers to disclose the terms they offer large grocery chains, and have the state judge whether those terms are fair. The attorney general and ultimately judges would then be able to determine whether decisions to not do business with a specific retailer have a “commercially reasonable justification,” whether sales to one retailer would lead to “unreasonably diminished availability” for another and whether there are “genuine efficiencies” in vertical integration. The pro-mom-and-pop politics are appealing, but New York often struggles with even the core competencies of government, so it remains to be seen how well it would regulate competition in the low-margin, opaque wholesale market for groceries.

A better solution would be to work with the private sector to make it easier to open new grocery stores, stimulating competition in the sector the traditional way — by increasing supply. To bring better produce at lower prices to New Yorkers, Mamdani should apply an abundance mindset to grocery stores. The same logic that’s led him to come around to embrace a housing agenda that seeks to enable the private sector to build many more apartments should inform his approach to food.

Doing this makes great economic sense, but it would involve challenging ingrained political attitudes about protecting small businesses from national competition. 

Before going further, we should stop, step back and look at the city’s supermarket landscape through clear eyes — to understand what makes owning and operating a store different here than just about anywhere else in America. New York City used to have a thriving ecosystem of local mom-and-pop greengrocers offering quality produce at reasonable prices, but these are shutting down as aging owners retire and their kids find better career prospects elsewhere. Of the larger remaining supermarkets, many are cooperatives with common branding and suppliers — CTown, Foodtown, Associated and Key Food, chief among them — but different owners depending on their location. The local chains left cannot match the passion and work ethic of the old greengrocers. The cooperative brands were formed in the 20th century to create economies of scale in purchasing across the region, but they cannot match the buying power or technology of 21st century national chains. Chains like Gristedes and Morton Williams specialized in managing the difficult logistics of Manhattan, but Whole Foods and Trader Joe’s cracked that code years ago. Cost-saving innovations like self-checkout — or even consolidated lines for registers — elude the local chains, some of which have also signed union contracts.

The grocery business has become heavily consolidated not only in the U.S., but throughout the developed world — in Switzerland, the top two grocers control 80% of the market. Many of the chains now growing in the U.S. are now not just national, but international. Germany’s Aldi Nord bought Trader Joe’s decades ago, while Aldi Süd is opening stores across the United States and New York City under the Aldi brand. The Aldis’ major German competitor, Lidl, is now opening stores in New York City as well.

It is simply not realistic for New York City to fight the trend toward more consolidated chains, and consumers will keep suffering as long as we keep trying. National and international chains are making inroads into the city already, and if New York politicians can accept the benefits of welcoming in all grocers rather than trying to exclude those they deem unworthy, there are many available policy levers to further stimulate competition in the sector.

The lowest-hanging fruit is to simply legalize selling groceries in more of the city. The most egregious planning barrier is that grocery stores over 10,000 square feet are not generally allowed as-of-right in so-called “M” districts, which are the easiest places to find sites large enough to accommodate the large stores that national grocers are used to. Many of these districts are mapped in places that are not what people have in mind when they think “industrial” — mixed-use neighborhoods with lots of housing like stretches of Williamsburg’s Bedford Avenue and almost all of Gowanus, even post-rezoning, are in fact mapped as industrial districts.

To open a full-sized grocery store in these areas, a developer must seek a “special permit,” which requires the full City Council to get together and vote for an exception to the rules. This is a long, uncertain process, and has in the past even been an invitation to corruption.

Most famously, the City Council uses this power to keep out Walmart at the behest of unions and community groups. Thwarted in its plans to open a store in East New York — a low-income Brooklyn neighborhood that could desperately use more grocery options — the nation’s largest grocer instead serves New Yorkers with a store just beyond the Queens/Nassau line in Valley Stream, rumored to be the busiest Walmart in the country. New Yorkers with a car and the willingness to schlep beyond city limits — or pay the Instacart premium — get access to cheaper groceries; the rest get locked out.

When politicians are willing to approve a grocery store, the price can be high. My beloved Brooklyn Navy Yard Wegmans was part of a torturous public-private partnership that involved preserving an old mansion and building lots of questionable non-grocery retail and office space that remains mostly vacant to this day. Whole Foods cut a deal to open the store in Gowanus, at Third Avenue and Third Street, in exchange for preserving a similar historic building (which also still sits vacant), along with installing solar panels over the parking lot (which at the time were more expensive than they are today) and wind turbines that can’t even power a microwave on a windy day — shiny, spinning objects intended to lull politicians into a “yes” vote like a baby’s crib mobile.

As for corruption, in 2003, Brooklyn Councilman Angel Rodriguez was sentenced to prison for trying to extort over $1.5 million in cash and benefits from a developer in exchange for voting to allow the Red Hook Fairway (now a Food Bazaar) to open.

Fascinatingly, the special permit requirement can be avoided entirely by building underground, where space doesn’t legally count toward the 10,000-square foot limit. Subterranean construction is an expensive proposition, but it’s how the Whole Foods managed to open up a store in a cellar on Bedford Avenue, which would otherwise require a full City Council vote. Trader Joe’s resorted to the same underground zoning hack on nearby Kent Ave. These national chains spare Williamsburg residents the much higher prices of the aboveground Brooklyn Harvest nearby, in a commercial district where a Council vote was not required.

Grocers with deep pockets, a premium reputation and hardcore fanbases may occasionally jump through these hoops — managing mercurial councilmembers, building expensive underground stores, maybe even playing along to pay a bribe — to win permission to open stores near well-heeled residential neighborhoods like Park Slope and Fort Greene. But most grocers in most neighborhoods won’t even try.

Beyond all these barriers to opening grocery stores in industrial districts, the city has simply not zoned enough land for development in residential and commercial districts. Most existing buildings in New York City are small, and modern grocery stores require large, clear spaces that are easiest to provide in new buildings. When neighborhoods don’t allow new buildings — either for traditional not-in-my-backyard reasons, or more “progressive” justifications like trying to hold off growth that they don’t feel serves existing residents — they also don’t get new supermarkets that serve all of their residents. Even outside of mapped industrial districts, developers often shove grocery stores underground (Manhattan and downtown Brooklyn especially are full of them), due simply to the general shortage of zoned capacity in a city ridden with NIMBYs. Building underground is more expensive than building above ground, but at least it doesn’t count toward zoning limits.

The City also has a program called FRESH that gives incentives to open new grocery stores, but the program does not apply citywide, and in many of the places where the program does apply, it only offers financial incentives — not the zoning bonuses available elsewhere. Even in neighborhoods where they do apply, they are useless if politicians won’t agree to zoning for new buildings at all.

There are additional zoning obstacles. While the City has mostly removed parking requirements for housing, off-street parking is still required for grocery stores in much of the city. The zoning code contains a number of waivers for parking requirements for smaller uses, but grocery stores are often too large to qualify. Food is as critical as housing, and parking should not be a barrier to building grocery stores any more than it should be for housing. Many grocers, especially national chains, would still demand it, but that should be their choice.

Beyond zoning barriers to opening new grocery stores, New York City’s grocery supply chain is aging. Fresh meat and produce must be purchased daily, and the Bronx’s Hunts Point Produce Market, the city’s traditional wholesale market, is physically obsolete. The market’s organization as a co-op on City-owned land adds multiple layers of complexity to any effort to invest in proper warehouses to replace the diesel-powered refrigerated trailers that have proliferated. Subsidized efforts like using congestion pricing money to upgrade the facility may show some results, but the private sector should also be allowed to play more of a role. The city should zone more of its private land for denser warehouses and cold storage facilities.

Mayor de Blasio’s Department of City Planning tried to fix the problem of restrictions on warehouse development in northern Brooklyn, but planners were stymied by now-Brooklyn Borough President Antonio Reynoso, then a city councilmember. He felt the plan to allow denser non-residential development in the industrial parts of Williamsburg, Greenpoint and Bushwick did not include enough restrictions on non-industrial uses. His fear turned out to be largely unwarranted given the subsequent outerborough retail and office crash and the boom in industrial demand during the pandemic, but markets change faster than politics can react, and the plan died. Councilmembers should learn from Reynoso’s blunder and accept planners’ expertise, and Mamdani should make another push on this front.

There are other levers, too. Grocery stores are complex logistical operations, and road and curbside congestion slows deliveries, driving up costs and leaving perishables to rot. Congestion pricing was a good start, but charging the full $15 fee, expanding the program beyond the Manhattan core, and cracking down on box-blocking and creating more loading zones could make deliveries easier.

Another ingredient is slow city bureaucracy. Even after an operator leases a storefront, it often sits empty for months as agencies must grant approvals and carry out inspections. Agencies like the Department of Buildings and the Fire Department should streamline the code requirements to renovate space to meet grocers’ needs, and approve new facilities more quickly. 

A last idea is making better use of the humble elevator — and reducing the high price of electricity here. In other countries, freight elevators are an important tool for moving food around and into storage, with one grocery store developer in Germany saying he would always install one in a store in a place as dense as New York City. Here, though, elevators cost three times as much to build and even more to operate as in Western Europe, so workers often move food into grocery basements by hand or with janky conveyor belt-like devices. The mayor could drag the elevator industry into the 21st century by adopting globally harmonized standards for devices, spurring competition in an oligopolistic market. Grocery stores are also electricity-intensive businesses with high demand for refrigeration, so anything the governor can do to bring more generation and transmission online would be helpful. Gov. Cuomo closed the Indian Point nuclear reactors, a big step back for the state and city.

The New York City grocery market stands out nationally in a number of ways, and will never look exactly like the rest of the country. The city is dense and customers are more likely to arrive on foot than by car, making it a proving ground for national retailers to try out more urban, small-footprint concepts that can later be rolled out to other dense U.S. cities. And New York’s ethnic diversity means there will always be demand for foods that national retailers don’t stock — H Mart started selling Asian groceries in Woodside in Queens before expanding across the United States and then abroad, and NetCost Market has spread the Eastern European concept it started in southern Brooklyn to Pennsylvania and Florida. But grocery abundance can only be achieved by balancing what makes the city unique with the scale that national retailers can bring. Local chains that have something special to offer should be allowed to thrive, and those that New Yorkers resent having as their only options should be allowed to fail. To do that, policymakers need to focus on breaking down barriers to competition, letting New Yorkers vote with their wallets and sort the rest out.