Five stores would sell staples at 30% below market rates
The Multicultural Business Coalition, a nonprofit representing supermarkets, grocery stores and bodegas, filed the lawsuit Monday in New York County Supreme Court. The complaint argues the plan would introduce unfair competition to a local industry already operating on slim profit margins.
Many members of the coalition “cannot compete with the municipal grocery stores, and therefore, will be put out of business,” the complaint reads. The coalition says the plan will particularly harm immigrant- and minority-owned businesses.
The mayor’s office didn’t immediately respond to a request for comment.
Mamdani floated the stores on the campaign trail as part of his affordability agenda, arguing that subsidized supermarkets focused on cheap, healthy foods would help New Yorkers adapt to rapidly rising food costs. The stores would be run by external operators but overseen by the city, offering a core basket of staples at a 30% discount to market rates. Operators would receive free rent and subsidies.
“For many, that 30% discount is the difference between an evening spent around the dinner table with family or working another double shift to make ends meet,” Mamdani said last month as officials announced the details of the proposal.
The mayor has allocated $70 million toward the stores. The city’s Economic Development Corporation says the city has roughly 1.5 square feet of grocery space per capita, compared with roughly 5-10 square feet elsewhere in the country. Mamdani says the plan may save New Yorkers $1,000 a year.
The plan has drawn a steady stream of criticism as broader concerns mount over the mayor’s relationship with the business world.
The city is planning a 12,000-square-foot Manhattan store in East Harlem, set to open in 2029, and a 15,000-square-foot store in the Bronx on Hunts Point, planned to open in late 2027. Other sites haven’t yet been chosen.
Officials are actively soliciting proposals from operators willing to run the stores. Applications are due in October, and the city has been leading tours of the facilities.
Other cities, including Atlanta, have tested the concept of publicly funded stores in recent years. Errol Schweizer, a grocery-industry veteran who has consulted the development corporation on the project, wrote in a recent newsletter that New York’s project “may point the way forward for other cities.”
The recent information session drew attendees from across the local food industry, and its sign-in sheet included officials in San Francisco, Boston and Chicago.
The lawsuit escalates a dispute over the grocery-store initiative Mamdani first detailed in late July, when the administration unveiled the 30% discount structure and the Bronx opening date that the city is now advancing.