New York City's largest grocery chain owner says Mayor Zohran Mamdani's $70 million plan for government-run supermarkets amounts to a taxpayer-subsidized assault on the bodegas and stores already serving the city's neighborhoods.
John Catsimatidis, CEO of Gristedes and one of the city's biggest supermarket operators, laid out a blunt case against the mayor's plan in an interview with Fox News Digital. Mamdani announced in July that the city would open five government-run grocery stores, one in each borough, offering a 30 percent discount on a core basket of everyday groceries including meat, seafood, and fresh produce. The first store, in the Hunts Point section of the Bronx, is set to open in late 2027. All five are supposed to be running before Mamdani's term ends in 2030.
Catsimatidis's objection is straightforward: the city plans to cover property taxes and rent for each location, then hand operations to private managers who won't carry those costs. That arrangement, he argues, creates an unbeatable advantage that will siphon customers from the independent grocers and bodegas already operating on thin margins in those same neighborhoods.
The grocery business runs on razor-thin profit margins, between 1 and 3 percent, by Catsimatidis's estimate. Eliminating rent and property taxes from the equation changes the math dramatically.
Catsimatidis told Fox News Digital:
"The people that are going to run those five stores are not going to pay any [real estate taxes]. Not going to pay any rent. If I don't pay any rent or real estate taxes, I can bring down the cost of a product 20% across the board."
That 20 percent built-in advantage would land on top of the administration's promised 30 percent discount on its core grocery basket. For a bodega owner or independent grocer already struggling with New York City's punishing overhead, competing against a store that pays neither rent nor taxes is not a fair fight. It is not designed to be one.
Catsimatidis framed the stakes in personal terms for the small operators most at risk:
"The fact is the people [Mamdani] is going to hurt are the current bodegas or the current supermarkets in those neighborhoods. So it becomes a problem of 'for whom do the bells toll?'"
That warning has drawn support beyond the grocery industry. Immigrant business owners are already preparing a lawsuit against the city over the taxpayer-funded stores, arguing the plan threatens their livelihoods.
The price tag raises its own questions. The Washington Free Beacon reported that the first city-run supermarket will cost $30 million to build, roughly three times what industry experts say it costs to build a supermarket from scratch. Anthony Pena, president of the National Supermarket Association, put it plainly: "Even a high end, gourmet store in the middle of Manhattan wouldn't cost that much to build."
Operating costs could balloon further. Mamdani has estimated $12 million annually per store, but food policy experts cited by the Free Beacon project at least $20 million per store at union labor rates. The Washington Examiner reported that Mamdani estimated five stores could cost $60 million per year to run, while experts anticipate costs exceeding $100 million annually. All of this lands on a city already carrying a $5.4 billion budget deficit.
The fiscal recklessness fits a pattern. A Staten Island judge recently halted Mamdani's pied-à-terre tax after homeowners sued over its botched rollout, another ambitious revenue scheme that ran into legal and practical reality.
Mamdani pitched the plan as a response to food insecurity. Nevin Cohen, director of the CUNY Urban Food Policy Institute, told Fox News Digital that 1.4 million New Yorkers are food insecure and that 20 percent depend on SNAP benefits or federal food subsidies.
No one disputes that hunger is a real problem in parts of New York City. But the administration's chosen locations undercut the food-desert argument. The Free Beacon found that the proposed East Harlem site, La Marqueta, a city-owned marketplace announced as the first location on April 14, 2026, already has five grocery stores within a two-block radius.
And the city already runs a program designed to solve exactly this problem. The FRESH initiative, Food Retail Expansion to Support Health, has operated since 2009, offering tax breaks and zoning incentives to encourage private supermarkets in underserved neighborhoods. Cohen himself referenced the program in his Fox News Digital interview, noting that it "provides [tax incentives] and zoning incentives to encourage new supermarkets or the expansion of existing supermarkets in neighborhoods deemed to be underserved by food retail."
The New York Post reported that FRESH has already opened 30 new grocery stores across all five boroughs, generated $177 million in private capital investment, and created more than 1,400 new jobs while retaining over 600 existing retail positions. At least three FRESH-supported grocery stores sit within walking distance or a short bus ride of the La Marqueta site. Bronx Borough President Vanessa Gibson praised the program in 2023, saying, "With too many of our residents and families in the Bronx living far away from fresh produce, and unhealthy food items often seen as the only option, we are grateful for the FRESH program."
So the city built a working program that uses private investment to put grocery stores in underserved areas, and now the mayor wants to spend $70 million in public money to compete against those same stores. Catsimatidis proposed a simpler alternative: give existing grocers tax credits to lower prices across the board.
"If you want me to lower the price of eggs, well maybe I'll lower the price of the eggs by a dollar a dozen. But maybe [the city] will give me a dollar a dozen credit toward my real estate taxes."
Catsimatidis also pointed to Manhattan's congestion pricing, enacted in January 2025, charging vehicles entering south of 61st Street, as an added burden the administration ignores. Vendors delivering from New Jersey, Nassau County, Suffolk County, Brooklyn, Queens, or the Bronx now charge 10 to 15 percent more for deliveries into the pricing zone, he said. Those costs get passed to stores and, ultimately, to shoppers.
"If you go up and down the streets in New York City, half the stores are empty, which is horrible."
Private grocers absorb congestion pricing surcharges. The city-run stores, subsidized by taxpayers, will not feel that pressure the same way. The playing field tilts further.
Critics beyond the grocery industry have raised similar alarms about the mayor's broader economic agenda. Billionaire investor Bill Ackman has warned that Mamdani's policies, including rent freezes and new taxes, risk hollowing out New York City's economic base.
Sarah Kang, a manager at CTown Supermarkets, captured the fear among small operators when she told Breitbart: "A lot of people walk 20 to 30 minutes to get here. If they find a cheaper supermarket, I don't think they'll be willing to make that trip. It's going to affect small grocery stores. Definitely."
The mayor has offered a different narrative. At a Campaign for Hunger community food distribution event in Brooklyn on July 27, Mamdani cast the stores as relief for working families battered by rising food costs.
"Every week, New Yorkers walk into a grocery store hoping the prices haven't gone up again. A trip to the grocery store shouldn't spell dread for New Yorkers."
Senator Bernie Sanders made a surprise appearance at the La Marqueta announcement to endorse the plan. "Providing affordable food to working families, that's not radical," Sanders said. "It's exactly the right thing to do."
But the administration has not answered basic questions about sustainability. How will the 30 percent discount be funded beyond the initial $70 million capital outlay? What happens when operating costs, projected by outside experts to exceed $100 million a year for all five stores, outstrip the budget? And what happens to the bodega owners, immigrant grocers, and FRESH-supported stores that lose customers to a competitor that pays no rent and no property taxes?
The administration's own grocery stores will also operate under restrictions that limit their commercial appeal. The city-run locations will ban alcohol and cigarettes and mandate a "healthy eating" focus, choices that may narrow the customer base while still undercutting the private stores that carry those products.
An alleged accounting error flagged by Breitbart raises further doubts about the plan's financial foundation. The administration reportedly misclassified $140 million in private grocery store investment as government spending, when the actual public expenditure in tax breaks amounted to roughly $30 million. If the city cannot accurately account for existing grocery spending, the prospect of managing five new stores and their ballooning budgets inspires little confidence.
Government-run grocery stores have been tried in other American cities. The track record, as the Free Beacon documented, is one of near-universal failure. Catsimatidis put the ideological stakes in terms that cut past the policy details:
"You're competing against your own citizens, and that's only done in socialist countries. Look at socialist countries, nobody's breaking down the walls to get in, but they're all breaking down the walls to get into the United States of America."
New York City has 1.4 million food-insecure residents and a proven program that uses private investment to reach them. The mayor's answer is to spend public money competing against the private businesses that already do the work, and to ask taxpayers to cover the bill when the math stops adding up. That is not compassion. It is governmenteliminating the competition and calling it progress.
