His plan to launch five City-backed supermarkets clashes with his promises to help mom-and-pops.
My first job ever was working at my father’s Met Foods grocery store in Bensonhurst, Brooklyn. Like most of his employees, I did whatever was needed, from stocking shelves to checking out customers. I learned a lot about how small businesses survive by understanding their community's particular needs and dedicating themselves to meeting them. Perhaps more importantly, the exposure at such an impressionable young age to co-workers of vastly different economic, ethnic and social groups made me appreciate that no matter how hard people may work, the circumstances of where they come from have a huge impact on where they wind up. It also gives me a special perspective on Mayor Zohran Mamdani’s plans to create a small network of government-run supermarkets, which clash with so much else he purports to believe in.
Mamdani has weighed in on the value of small businesses — and pledged to make their lives easier, by streamlining regulations and reducing fines, among other things. “You cannot tell the story of New York without our small businesses. Yet, our city has long made it too hard for these same businesses to open their doors, and to keep them open,” he’s said. Most New Yorkers would agree with that quote and would prefer a city with fewer large generic chain stores and more “mom and pop” unique local businesses.
The preference for small, local businesses has a strong foundation. Such businesses provide a critical rung on the ladder of opportunity for many New Yorkers. My father was the classic story: After graduating from high school, he worked in a relative’s grocery store in Sheepshead Bay, Brooklyn. A few years later, he started his own store, giving our family a ticket to the middle class. The amount of work and hours involved in keeping it afloat astonish me (someone who spent years working in a large corporate law firm) to this day. Although it never allowed us to rise above middle income, it gave him, and to some extent me, a sense of agency usually reserved for people much higher on the income spectrum.
My family and I, however, were far from the only beneficiaries of his business. Small businesses like grocery stores typically have a much more informal hiring process than large businesses, which rely on detailed policies and procedures. As a result, mom-and-pops often employ people who might not be hired by big chains or the government and give them the opportunity to join a union (as his employees did). These include senior citizens running low on cash, people who have long since made amends for early brushes with the law and people with documentation issues but with a family that needs to survive. Small businesses have the flexibility and incentive to treat their employees more humanely, as they are people who work directly with the owner daily and not statistics in a corporate or government database overseen by a human resources department. Small businesses also have the ability to help customers who may temporarily be financially strapped or have special needs, and they play a greater role in the community of which the local store is an integral part.
Which brings me back to the mayor’s signature initiative to open a City-owned grocery store in each of the five boroughs — a plan that cuts in the opposite direction of so much of his rhetoric and positioning. These publicly owned grocery stores are likely to offer benefits and pricing that undercut independently owned businesses.
Let’s do some math. The project’s estimated cost totals $70 million, with the Manhattan store in East Harlem alone costing $30 million. Mamdani’s stated aim is “to deliver affordable, high-quality groceries that provide meaningful savings to New Yorkers and strengthen neighborhood food access citywide.” But the East Harlem site is hardly a “food desert.” It is within a 35-minute walk of approximately 45 existing grocery stores, which vary from small bodegas to large chains, and is well serviced by public transportation allowing access elsewhere. Clearly, there are people suffering from food insecurity in this part of Harlem. But they are not food insecure because they lack access to a place that sells food. They are food insecure because they lack the money to buy that food.
Is it possible the proposed store will sell groceries at meaningfully lower prices than competing stores? Perhaps — but if so, that will be only because it pays no rent and has a steady stream of government support that small businesses can’t compete with. As I know only too well from personal experience, existing grocery stores have notoriously low profit margins, which are often estimated to be between 1% and 3%. Mamdani’s proposed stores will pay no rent and no property taxes — benefits that none of the other thousands of places that sell groceries in the city get.
The $30 million price for a single 9,000-square-foot Manhattan location works out to over $3,000 per square foot. Although there is not good data on the per square foot cost of setting up grocery stores, the data suggests that this is far in excess of what it should cost. Anecdotal evidence suggests this is almost four times what it would cost to set up a comparable business.
These subsidies and expenses, which will undermine existing taxpaying businesses, raise the question of whether this program makes sense at a time when the City is facing multibillion-dollar deficits. If the goal is to address hunger, this is a particularly inefficient way of doing it. It will not help the many budget-constrained New Yorkers who do not have convenient access to these stores and will help the many non-budget constrained New Yorkers who do have convenient access to them. Furthermore, the most severely budget-constrained New Yorkers will still have trouble paying even the reduced prices.
Clearly, there are many more efficient ways to help food-insecure New Yorkers. Existing initiatives include Health Bucks that help residents stretch their food stamp dollars at farmers markets, the Green Carts program that helps increase access to fresh fruits and vegetables through street vendors and the FRESH initiative that helps facilitate grocery stores opening in underserved neighborhoods. These are all laudable projects that could be scaled up with the funding that will be going to City-run grocery stores. More funding for food pantries and for local residents cut off from federal SNAP benefit reductions would also address food insecurity more efficiently.
The mayor’s well-expressed preference for small businesses, like the one my father owned, is based on so much more than a mere nostalgia for a time when small, independent, unique and somewhat quirky stores were able to thrive in the city. So many of these have been pushed out by giant corporations running national, or international, operations. Those that have managed to hang on deserve help from the City, not competition from yet another deep-pocketed competitor.
