Can’t get past the paywall, but I’m curious how they’re calculating the discount here.
Traditionally, milk and other staples are loss leaders for grocery stores and already sold at a “discount” from wholesale. DECA (the military grocer) ran into an issue where they tried to operate with a fixed margin, but shoppers thought they were more expensive because they didn’t have these loss leaders.
So, could see this being a case where they’re just slightly below other stores, which are already selling at a loss. Then claiming that it’s a 30% discount when in practice it’s significantly less.
I grocery shop every week, and I go between Costco and the local store. I buy where ever is cheapest. Look at TP, tuna, flour, sugar, milk , eggs, pasta, meat. I calculate it all and go to whichever I can find is cheapest.
Costco has the lowest price and better quality for most items.
Yep. You can easily see this in any DOJ / Eastern District of NY fraud case work or walk into a bodega and see Kirkland products. Plenty of articles on the subject. Have a horrific day!
Liberal democrats, sure. Others, less so. I'll take this moment to say the market is not perfect, does not operate in a vacuum, and sometimes state intervention is necessary.
Unlike corporations, government run grocery stores aren't profit driven, so they have no reason to scalp prices unreasonably and throw out unbought food. Non government grocery stores are ludicrously wasteful and inefficient on a societal level since their goal isn't to feed people, but to make as much money as possible
Grocery stores throw away expired food because there are required to (and should be). They are not inefficient at all - grocery stores typically have only ~2% profit margins.
>government run grocery stores aren't profit driven
Correct. They are corruption driven. Someone is getting a hefty cut under the table at the tax payers expense.
Additionally, because they can't financially go out of business, there's no desire to run things efficiently or spend money innovating in ways to reduce costs.
Well there’s gross margins and net margins. Most grocery stores operate at low net margins. But if you were a government backed program conceivably you can strip out some income tax and real estate rent. That would probably be 20% net margins right there.
There’s gross (Revenue - COGS), operating (gross - operating expenses), then net (operating - tax and interest expenses)
Income tax is negligible in relation to revenue, was roughly .1% for Kroger looking at TTM. Harder to find rent, but it’s not making up the 20% difference. Operating expenses in total were roughly 20% and a lot of that is in salaries, hourly pay, overhead expenses, keeping the lights on, etc.
Not to mention, both of those are opportunity costs, so they’re being subsidized by the tax payers as well, not “savings”
20% on rent and taxes is extremely hopeful when considering the mamdani plan, but that's ok because the subsidies will cover the rest. Subsidies, by the way, is a different way of saying taxpayer funding. Relying on taxpayer funding is a very bad way to design state policy with regard to food. Every lost taxpayer due to tax increases is generally a 2:1 loss in tax revenue after the tax increase, more or less depending on the increase, but it's not just lost taxpayer base, because those taxpayers were also consumers and that will be gone as well. If I was to choose one system to overhaul it would definitely not be the one that has a 1%-2% profit margin, that would rank near the bottom, in fact.
From his press conference, it sounds like they will be taking a sampling of prices from competitors and marking it down every month. So, it sounds like it will actually be much cheaper, taking the savings government ownership and passing them directly on to the consumer.
I like to think its the logical extension of a food bank and offering SNAP cards, but a more evolved model which we'll see if its a better fit; I could easily see banks turning into grocers with a little government assistance and incentive if the structure works better.
Yea people will try to take advantage of it, but it the stock, force the "store" to buy more and increase the program's deficit, requiring even more taxpayer money. This will work great
Given the low gross margins of grocery stores, any claim that they'll be profitable while selling food at 30% less cost (not 30% less markup) is fairy dust.
I don't know that NYC taxpayers will actually mind, as a whole, honestly. It's not all that different from other subsidized food that's done in ten different ways already. They'll let us know at the voting booth.
A portion of those who can leave, those making $150k+, will leave and have been leaving for a while now. According to the city comptroller, there was a net loss of 15,552 high-earners who left the city last year (that's net, so accounts for any who moved in).
As much as I personally would love for us to collectively subsidize our grocery bills, I don’t think that’s what’s going on. It sounds to me like they are running the military commissary model. They aren’t using tax revenue to pay for the 30% margin, they just don’t have to pay taxes themselves and aren’t interested in generating profit. I don’t know the full breakdown of what they’re saving on, but it sounds like a different model than the free buses; which would be using tax revenue to cover the cost instead of a fair.
Exemptions from taxes is just a mechanism is pass on a subsidy - that revenue is no longer entering the governments budget and acts in the same way as a subsidy.
To me it is still a direct transfer of costs from the individual to the government.
The commissary serves serves approximately 8.3 million servicemembers and their families. It is subsidized by 345 million Americans.
NY city has a population slightly larger then what the commissary serves coming in at 8.5 million but they only have 8.5 million tax payers to subsidize it.
He even mentions in the video the subsidy for the commissary is 1.5 billion although he try's to downplay it as part of the defense budget ( its only 2%! ) which is dishonest to say the least.
Also, there is a 5% surcharge at the commissary (I am army retired) that is conveniently not mentioned when people bring up this argument.
The video guy try's to make everything sound basic. He doesn't mention utilities, building upkeep, security, supply chain, logistics, or the host of other things a store has to pay. Its not as simple as "this costs $2.00 so I can sell it for $2.01" like he tries to make it out to be.
But it is an unsustainable model on a mass scale because in the end the government is paying 30% of your grocery bill and that’ll just come out of taxation.
I’m sure this pilot will run for his term of office but I would be surprised if in a few years it was expanded to anymore than these 5 locations. After he’s gone I’d expect at some point they’ll be quietly closed as too costly.
What’s unsustainable? It’s still taking in revenue to keep its self afloat, and if it’s under the same structure as military commissaries then the only cost is in unrealized tax revenue. Tax’s that could be collected from a private store.
However, our country is littered with such waste, non of which do what tax’s should be used for, like making groceries cheaper. If you’re really worried about tax potential that goes wasted, are you equally worried about suburban neighborhoods? What about parking lots? These are massive waste of space that rob us far more resources than a couple grocery stores.
You are right we should spend our tax money on things like another war, not silly things like making food cheaper for everyone. New York choose to spend their tax money in this way by who they voted for. If they don’t like it, then the can vote for someone else next time.
I am very worried about free parking and suburban neighborhoods and I think every mayor should take those seriously as fiscal problems (mostly the non-NYC mayors). What I’m worried about with the stores is that are a fiscal cost that also don’t really provide cheap groceries to people, which there are lots of reasons to be concerned that they won’t.
The problem isn't inherent in the goverment subsidizing groceries. They take tax money, which is taxed progressively, and then hand it out in a manner which is advantageous to the poor ( they spend a much larger % on groceries ).
Not so different from many other forms of welfare.
The problem comes in making the government run business run at similar efficiency as the competitive ones on the market. As we've seen in many centrally planned economies, easy for it to languish in corruption and low productivity.
i know groceries are run on razor cheap margins. Yet i see Market Basket around me be some 12-25% less than Stop n Shop or target, easily som 40% less than Whole foods, yet has more cashiers, and they still make enough profit that the family that owns it keep fighting over it.
I once asked a Market Basket manager, how the math maths, he said volume.
My point, a well run grocery store, with enough volume, can sell at up to some 20% cheaper
Yeah but the big thing is that it seems like a non-trivial task to run a grocery store better than other grocery stores. I don't have any reason to believe that government-run grocery stores would automatically have the economies of scale and the management of Market Basket rather than the worst Stop n Shop
Also with no profit incentive the employees will unionize and make 40 bucks an hour with no pushback from management because there is profit incentive.
have you ever been to a bodega? they have to be like the most innefficient way to distribute groceries. Its like $8 a gallon of milk. Half of what bodgas carry is from them buying from other box retailers. A milk truck driving around to 40 bodegas all a block away from each other and using a 2 wheeler to bring each one 32 gallons of milk 5 days a week.
Aldi has to be the most efficeint grocer, imo, the city of NY should just subsidize whatever they need and get cheap groceries to the peole of ny. I bet if Mamdani went to Aldi, and said NYC needs 24 Aldis throughout the city, they could come back with exactly what they needed to make that happen, and it would be more efficient.
I imagine they’ll get some savings from being government run and having subsidization. But can also see some increased operating costs due to economies of scale.
Wouldn't the other grocery stores basically be forced to lower their prices as well? And than next month these government stores have to go 30% under that new lower median price. That kind off looks like a feedback loop. Off course I like cheaper grocery every month as much as the next guy. But it doesn't look very sustainable.
Grocery stores already sell products on small margins. It’s impossible to compete with someone who is selling all their products at a loss and making up the difference with taxpayer money.
Probably what will happen is that other grocery stores don't lower their prices. Instead they'll outcompete the public grocery stores in any number of other ways like having better hours, better service, better selection, better variety, etc.
If it is truly 30 percent cheaper there is incentives for entrepreneurs to buy up as much stock as they can and open their own tiny businesses where they deliver groceries and keep 20 percent for themselves.
Grocery stores usually operate on a 1-3% profit margin, which is to say there’s not much they can actually reduce their prices by and still stay in business. Getting undercut by 30% means that any nearby stores will just get pushed out of business
Not really though, as the grocery stores really aren't crushing consumers with their pricing - they operate on razor thin margins. Maybe this will get producers to lower their costs, but they too aren't exactly crushing consumers as their input costs have risen.
The savings would come from cutting out all the extra costs (middlemen) that are basically unnecessary expanses in the first place. The producers would probably get paid the same.
All those useless people like the employees stocking shelves, truck drivers bringing the product to the store, food processors that prepare and package the food, farmers that produce it, etc. All capitalist bloat.
Direct to consumer would be cutting out the grocery store and buying direct from the supplier. Then theoretically you’d save money on the operating margin required to run a grocery store.
Grocery stores need to find suppliers in order to get products to stock their shelves. Same thing applies whether it’s a government store or corporate store.
“The city will build the stores and waive rent and property taxes. It is also expected to provide an operating subsidy to help pay for the discounts.”
I consider these no different from the commissaries on military bases where groceries are cheaper than (subsidized) what you’d find “on the economy” (retail stores). I’d love to know if my thinking is accurate.
Military commissaries are completely different. Congress gives commissaries $1.57 billion annually on only ~5.5. billion in sales. Congress also exempts commissaries from virtually all taxes. Commissaries can also pay less the federal minimum wage. In fact, some employees are paid 0.00 and work just for tips.
It's because of a specific statutory exemption passed by Congress in 1978 (Public Law 95-485), which amended the definitions within federal labor law. Bottom line there's plenty in the military that's uncompensated labor. Military-industrial goes brrr; if troops need to be fed the DeCA can't say no. The fact some officer wives in Coronado have milk a dollar cheaper is missing the forest for the trees.
NYC is not child labor and paying 7.50/hr and taking infinite money from Congress and flying in cargo planes courtesy of the Air Force. People talking about operational costs and profit margins are blowing smoke up people's asses. It's two ships sailing past each other in the middle of the night.
Someone did a walk through on Tik Tok. I posted all the flyers in my neighborhood in the Bronx from the weekly set and showed them they could everything cheaper here with the price leaders. I wasn’t that impressed with the prices. They took down my posts with pics and dates circled. You just need to learn to shop sales. They go in cycles.
Commissaries operate nothing like that second paragraph describes unless maybe the PX's run different, but those are completely different things. A good month was 10% in the red, and their was often pushes to not be at 15.
People are going to lose their minds at the millions this is going to cost.
I once saw an Indian tribe do something similar, except it was with a gas station that had MTO foods.
At its peak, it had 50 full-time employees, all drawing full benefits. LOL
Eventually the thing became such a white elephant that they sacked the bright-eyed young college graduate (English degree) tribal member they had hired to run it and turned it over to an experienced convenience store owner, who quickly whipped it into shape (out with the salad bar, in with the deep fryer!) and made it profitable by selling cartons of cigarettes (sans tax stamps) on the downlow to the nearest town's non-Native businesses.
City will build the stores. Maybe NYC will be thrifty about it, but could foresee these costing tens of millions just for a fit out. If new construction, potentially $100+ million to accommodate the store, other stores, and/or low-income housing. Basically, a large, expensive grift.
Wonder who gets to run these stores? Rent free too. Presumably not anyone. Presumably need to have special connections along with checking various demographic boxes.
Maybe it will all be great, but have strong doubts. A co-op would be a better way. And even those generally struggle. Grocery business is tough even for the big-name retailers.
I hope it won’t become a 18 month fight between the veterans and the ex-drug convicts fighting it out for the cannabis dispensaries. Remember when that happened. We had a pot shop on every corner until they worked that out. I think the state one bit veterans think they get first dibs on stuff like this..
OK but then the city is just taking away property taxes it could have collected by doing something else. It's still losing money - opportunity tax in a way.
If you want to subsidize stuff and provide government assistance, why do it by running a logistically complex, price competitive business where you need scale to operate efficiently? There's no good reason for it, even if your goals are noble, all you're doing is setting a match to a pile of cash in the sake of "trying to be nice".
"If you want to subsidize stuff and provide government assistance, why do it by running a logistically complex, price competitive business where you need scale to operate efficiently"
As others have stated, the point is not to generate revenue. Even if it's operated at a loss, it can be successful.
I imagine the reason a person would prefer a grocery store to a food pantry is: options and being able to shop instead of stand in line waiting for food you didn't select (maybe that's not universal to food pantries but that's what I've seen where I live).
I mean, why don't you go to a food pantry instead of a grocery store?
this is a horrible way to look at the world. Why collect taxes at all? All this program does is make the city subsidize food at the expense of the local bodegas, grocery stores and the taxpayer. Seems like a silly waste of money but at least it will be measured in the millions and not billions.
Taxes should be used to benefit the populous. I think the issue is some of these neighborhoods don't really have many options, so opening a grocery store provides healthier food options where they couldn't get them previously (bodegas aren't generally known for their produce sections).
I don't see how this is a horrible way to look at the world. I see someone trying to do good, using tax payer money to benefit tax payers. It's better than doing nothing and collecting taxes that only go to admin that bloat the system.
The private grocery stores only left due to rampant theft. The solution is to reduce theft, not put all private grocers and bodegas out of business and heavily subsidize one government grocery store per borough.
Oh yeah they just need to hit the "reduce crime" button.
Crime can be reduced by providing affordable groceries so that paychecks go further.
I have no idea why people are simping so hard for bodegas and existing grocery stores. Neither group will suffer any significant losses. Bodegas probably make way more money selling cigs, beer and impulse items than they do grocery items.
I'm guessing people with the strongest opinions aren't even living in new york.
Budgets exist. Efficient allocation of budgets is important. You shouldn't just spend money wastefully for dumb ideas even if they're well intentioned.
roads are objectively useful to society. They can generate many times their cost in other ways. Publicly subsidized food stores that will likely also take out a bunch of normal privately run grocery stores, or at least hurt them, seems like an enormous waste of money with zero benefit.
You miss my point completely. You're saying because its good for government to spend money on roads, they should build it in the most inefficient, costly way possible.
Please explain why you think the government would be effective at running a grocery business? Give money directly to the poor. Give extra assistance to existing food assistance infrastructure and programs. Give private grocery stores an incentive to open and run locations in target areas. These would all be FAR better solutions than having the government run a grocery store that its going to suck at doing and run for much higher operating expenses than a regular grocery store... The only explanation for such a dumb plan is optics.
Food pantries in my area are grocery style, but we're something of a breadbasket. Some are needs-gated, some aren't.
I don't shop food banks but I do go to Aldi when they open first thing Saturday morning and scoop 10-20lb of 50% off beef. Aldi is getting my trade because they're a very efficient store and they pass those savings on. That's why I don't shop at Target or Walmart or Food Lion.
Now maybe they don't notice my loss of trade but if the catchment area in a food desert draws enough people out of the other (presumably barely marginal) stores on the perimeter of the food desert, do they also earn a subsidy once they're no longer profitable? Do they get tax cuts, perhaps free rent?
Being the richest society in the history of the world means nothing when there are people starving to death on the corner of a 10,000 square foot office funded by the launch of the 93rd Chat GPT wrapper this year that does absolutely nothing of use.
We're about to get a massive social experiment in a metro area that is comparable in size and GDP to many countries (Brazil, Canada, Italy, ...). Rent control, socialized grocery stores, etc. Much like COVID, this is going to be research for years to come for economists everywhere.
The fact that his EDC finds consumer savings of about $90 per month from this suggests that the margin with which this would be considered a net success is going to be narrow. Public grocery stores in food deserts have struggled (Why Opening Grocery Stores Alone Doesn’t Solve Food Deserts — ProPublica), and I know people bring up military commissaries, but there are issues there as well.
Grocery store margins are already tiny on fresh foods so it’s not super shocking that savings are that small, there’s just not much you can reasonably cut without just running at a loss
Yeah I imagine they’ll have to just run a barebones assortment so there’s not enough assortment to risk things going bad at a scale that causes problems.
One of my biggest shocks coming to the US as a wee lad was the first time we went to a supermarket. Going from "this store has five things in it for sale, including exactly one kind of cheese -- do you want it or not?" like I remember from being very young, to "this store has, like, eighty different kinds of cheese... the more popular ones we sell in like eight variants and each variant might come in two to five different packaging/preparation styles" was fucking crazy.
But I mean yeah, yknow, this is a really interesting question to address the food desert problem.
Do you go for full practicality and stock the two most popular kinds of cheese because frankly that's all anyone actually needs? And repeat that for every other product. In other words, do you basically just set up a bodega or corner store that instead of being filled mostly with junk food just has a decent assortment of affordable necessities?
Or, do you find that to be somehow too humiliating, and that in order to not make people in a food desert feel like they're less-than, you open a larger scale grocery store with a large selection of items and then have to bear the cost of all that inventory management and spoilage?
Similarly, is this going to be a self-serve model or is it going to be acknowledged that one huge reason for food deserts is high theft and vandalism rate, and put everything behind the counter, like all stores used to be, a hundred-odd years ago? Are we going for practicality or are we going to eat loss in order to have people not feel like it's a loss of dignity?
On a related note, if the latter, are they going to have a cop posted there to address the theft issue? Are they going to budget for that using the store's budget or are they going to hide it?
I'm also really curious how they'll handle the junk food problem. Does a government subsidized store in a food desert need to stock a good selection of junk food? Are we endorsing selling the same exact food that helps people have all manner of health problems, and costs way the hell more than raw basics and thus contributes to poverty as well?
Will be interesting to see how consumers respond to considerable reductions in product type; probably one (or two) types of apples and grapes, limited availability of what type of beef (93/7, 90/10, ...), and so on.
Also interesting that they are basically doing "full price" on sodas, which is what SNAP rules in certain states are trying to do (with considerable pushback because how dare we limit choice).
I think the total lack of private label will also be an interesting experiment. That’s where most of your grocery savings can come from but the City of New York probably isnt going to go through the trouble of doing RFPs across cheese suppliers and yogurt suppliers and salad mix suppliers, etc. taste tasting, formula management, etc. for a couple stores. As you said lots of interesting things to learn from this in a city that has a scale that makes the findings relevant.
The success of this project is definitely going to be assisted by the fact that there is a widespread perception that grocery prices are out of control, even if that's not always reflected in the data
For the type of shopper who is very attracted to this, I'm not sure it's going to be an issue for them to only have one or two different types of apples instead of 15. It's hard to calculate how much value that having a massive selection of similar undifferentiated commodities really makes
Lots of places do that already, Costco is a good example of a limited selection of products. People don't seem to mind. Basically name brand, or white label for most products they offer. As long as the name brand is well known and decent.
I think they'll need the name brands regardless, to avoid creating some stereotype for the type of shopper going there. By using brand names, no one really knows who is there and you're getting the same food as store X.
The real issue is lobbying and large super markets targeting and trying to destroy this project before it has had time to be tested. Anything negative they can find to push via the media, they will. With enough negative media, even the most liberal will call it a failure. But if it's not losing money, helping food banks, selling brand names.. it's going to be hard to find a good negative angle, other than anti-capitalism.
>Lots of places do that already, Costco is a good example of a limited selection of products. People don't seem to mind. Basically name brand, or white label for most products they offer. As long as the name brand is well known and decent.
I can't believe you're seriously equating Costco shoppers to government discount store shoppers. Totally different income levels, demographics, locations, and use-cases. No one shops at Costco for their daily groceries; you get good deals on good products in bulk to stock up your pantry and chest freezers where the typical spend is anywhere from $250-$500 per trip depending on how often you go.
People shopping at government discount stores aren't looking for a 12-pack of Kirkland pasta sauce to last them a few months. They want small affordable jars enough for tonight's dinner and in different varieties so they don't end up eating the same foods over and over like a pet.
The biggest problem, as the linked article mentions, is facilities. The military charges an extra 5% just to maintain facilities, if you try to eliminate that to pass on savings you can end up crippling your store for days when systems fail due to lack of money for maintenance.
That's the thing tho, y'all thinking he needs to breakeven / make money. He has the entire NYC tax base as a piggy bank.
Basically ur tax money will make up the hole for a food desert grocery store.
I can already tell you how it's gonna go. Either the store gonna get robbed and looted and now we know why all the grocery stores left because of a certain population. Or the costs of running this shit is gonna balloon so high we gonna be like WTF
To your point about costs, people don't ever seem to lookup how much commissaries actually cost. It's all a public record. Last year DeCA (Defensive Commissary Agency) got $1.57 billion from Congress and total annual sales were under $4.9 billion.
The Commissary's 5% surcharge and pricing is for show. It's a simple wealth transfer because military-industrial goes brrr.
Incidentally, commissaries can (and do) employ child labor and pay some people 0.00. They're exempt from a bunch of basic labor rules. They don't pay any taxes. A lot of their logistics are paid for by hitching to the Army and Air Force.
The amount of people (but thankfully not Mamdani) repeating 'this is like Commissaries' is really worrying. If these things are going to be like commissaries they're going to close in a year.
Or they're going to be ridiculously subsidized, guess at that point it's just a question of whether the tax payer wants to subsidize cheaper groceries indefinitely
I live in Canada and Walmart is always more expensive than local grocers except for certain items like Banana's and Avocados. When I researched it, it is because Walmart doesn't find more local sources but rather large distributors.
Now the difference is Walmart will always have the same fruits and vegetables where the local grocers will have alternating produce.
NYC has had rent stabilization/control policies for decades. The effects of it are really clear. There is nothing novel about a rent freeze under mamdani's term.
Except for the additions to rent stabilization this time around (2 year leases), we know that rent control is effective in reducing rents, but has a whole host of negative unintended consequences, and is usually considered by Economists to be poor policy, relative to supply-side measures.
Plus, Mamdani has frozen rents at 0%. Which hasn't been seen since 2020 (and even then, a 2 year lease allowed for a 1% rent hike in the second year).
Relative to the counterfactual of no rent control (since these analyses are all natural experiments, largely using DiD methods, the counterfactual is applicable).
Edit: but you're right, the only way to UNCONDITIONALLY lower rents is build more housing.
> and is usually considered by Economists to be poor policy, relative to supply-side measures.
Yeah, I'm sure John Maynard Keynes would have hated rent control.
Outside of existing entirely within the CSE bubble, I don't know how you can say such a slanted bit of drivel with a straight face. You're joking, right?
No, you! You’re the one making the outrageous claims, not me.
And as an aside - “Usually considered” is the kind of weasel word poor form that gets you tossed from debate club and Wikipedia alike. Everybody knows - Nobody likes it. See?
Let's go point by point to unclog the shit, shall we?
> Economists pretty much universally think of rent control as poor policy.
You're just wrong. There's two layers to why you're wrong. How you phrase it, implies universality, that's "wrong" as in "fucked up to do" but also... the implied understanding. That's just incorrect.
Supply side, conservative-leaning Economists don't like rent control. Keynesians do
Source - a signed letter (which itself cited plenty of sources) from 30+ senior economists to the previous administration
> what evidence do you have that our discipline is wrong?
See part 1. You can't claim to speak for "our discipline" while being so confidently and maliciously incorrect. Seriously. GFY.
> Also, I don’t really give a fuck what you think of my choice of language.
Gee, pal. Thanks. I see the misunderstandings continue. I couldn't give a flying fuck less what words you choose to use, I DO care greatly what you do with them. And as of now, you're lying.
A vast majority of Economists do not have a positive view of rent control. Two surveys in the last 40 years have shown consistent low super for rent control amongst economist. Like 3 percent support rent control.
Also, the negative effects of killing investment through higher taxes and anti-market reforms will take decades to unfold. Rent control might make you feel good about your rent not going up the next year but ten years later after no new builds and lack of maintenance it might be making you miserable.
As opposed to the lack of rent control making you miserable immediately?
I find that most people who are against rent control have never had a landlord jack their rates up to the point of unaffordability and been forced to leave a place. It's not a fun experience and no amount of dry discussion of how this is what's best for the market will make anyone feel better in that moment
Fair, but the landlords are just going to make up the profits in other areas and this is being overlooked. Parking that was once free now you have to pay to compensate for the losses in rent, or the laundry that was free access now you have to subscribe for a card to access or pay per load, the gym or pool that was open access now a subscription for the tenants to participate or just hike if it already was being charged. This is just going to trickle into other parts of the property that they can manage and create new frustrations that can't be as easily blocked.
I think when the alternative is 'you have no place to live,' access to a gym or pool is pretty low on the frickin list of concerns, wouldn't you agree?
Rent control and rent stabilization almost always apply to older buildings; these places don't have laundry, pools, or a gym. And most don't have parking either, haha
What I'm saying is from perspective you don't understand how green they can make these hikes if they do band together and decide for a certain set of people, what are you going to do not park your car in front of your house? They can make these candles so green and name their price because of this and those with access to heat even in apartment buildings when they short the heat and blame it on whatever draws gigawatts of energy so they save money there. No disrespect but they can save in so many places and hike in so many other places to make up for what was lost on this.
economists like to say that simply building more will do the deed of lowering prices, which is such a short sighted view on spots and places where land is simply not infinite
Just build bigger apartment buildings. It’s not infinite, but you have to build to keep up with growth and demand. You can’t just constrain supply and then say everything is getting expensive and we are out of ideas other than constraining supply.
They aren't anti market. There's still a housing/rental market, just with regulations like rent control. City run grocery stores are still competing within the market, are they not?
It's crazy that anything other than complete and utter laissez faire (which just leads to monopolies and anti-consumer behavior) is considered "anti-market".
Your head would explode if you read about how postwar governments managed their economies.
Your head would explode if you could visualize all policies on a spectrum of pro market and anti market policies, and see the obvious fact that rent control is more anti market than not having rent control.
rent control has been experimented with again and again. It can be used as a short term emergency solution but it creates problems on the long term. The only thing that works is increasing supply, which mamdani is also working on.
As I said, this will be considered an experiment in Economics that will be analyzed using the considerable amount of micro data coming from a metro area that’s a country.
I don’t think you understand the econometric implications of this.
How do you think we come to our conclusions? Data. With some form of causal setup.
As this is.
Yet again, I am telling you this is an experiment. The discipline will utilize this as an experiment. You’re simply incorrect if you don’t think economists will leverage a very visible policy.
You seem to be reading what you want, instead of what I wrote
We will not be treating this as an experiment. When it fails, we will analyze the data to create even more evidence (that will be ignored) that this is a terrible idea. But we will not treat it as an experiment, because we already know how this goes
lol. You think there will be no research done on this?
You’re smoking crack.
Here’s a hint: you can run an experiment even if you have strong beliefs about the outcomes. Economists do it often. You know, since our results are ceteris paribus
We already have socialized grocery stores that are discounted in the US. They're just on military bases. There are hundreds if not thousands of these kinds of stores.
By the time we get the truth on how much money this wasted, the goalposts will be moved outside of the stadium. Then we'll have a new surefire way to install price controls
"Trying things" is not an unconditional welfare improving policy choice.
Regardless, we already know the impacts of rent control. Yes, it lowers rents for controlled apartments, but leads to a whole host of negative side effects (higher rents for uncontrolled units, higher housing prices, lower quality, more eviction attempts, ...).
For instance, we know that "although rent control appears to be very effective in achieving lower rents for families in controlled units, its primary goal, it also results in a number of undesired effects, including, among others, higher rents for uncontrolled units, lower mobility and reduced residential construction. These unintended effects counteract the desired effect, thus, diminishing the net benefit of rent control. Therefore, the overall impact of rent control policy on the welfare of society is not clear."
Rent control is one of the few policies where it almost universally has the opposite effect from its own stated purpose. Even "well-designed" rent control with benchmarks to inflation / property mortgages introduce all sorts of perverse incentives that end up reducing stock and coagulating the market.
People never leave rent controlled units. You just create hereditary beneficiaries of a policy while anyone new to the area is forced to pay for the astronomical rates for non-controlled units.
I mean,... part of the point of rent control is to allow people to have a long term home that they don't eventually get priced out of. It isn't a negative that they're able to live there permanently. You can say it like it is a negative, but it isn't.
Why should people be forced to leave the place where they live by market forces?
It's a ladder-pull. When you implement rent control, inventory in the controlled area almost universally declines. For those living in controlled units, it's most economical for them to stay where they are. You identify this as a good thing, and generally it is - we want people to have permanent shelter. The problem is the benefits of this policy are unevenly distributed. The beneficiaries of rent control are those residing in those controlled units at the time of the legislation going into effect. If you're entering the market looking for housing, what you often find is that there's almost no rent controlled units available, and all that's open to you are the high-tier luxury units that you can't afford.
It ends up putting upward pressure on prices, since the only units that have the float necessary to accommodate new residents are expensive/luxury. Rents rise, people who can afford them move in, neighborhoods gentrify, and the cycle repeats.
It also means that those living in controlled units often have more space than they need, which matters for big cities. An empty-nester couple would likely find their 4BR apartment is cheaper than moving to a 2BR, so they stay - meaning families moving into the city have even fewer options and need to look at possibly stuffing themselves into smaller units.
If long-term, affordable shelter is the goal - and it should be - rent control is not the way to achieve that.
The benefits of practically all policies are unevenly distributed, it's always an argument over who they should be unevenly distributed towards
> If you're entering the market looking for housing, what you often find is that there's almost no rent controlled units available, and all that's open to you are the high-tier luxury units that you can't afford.
This wasn't my real world experience. Nor the real world experience of pretty much anyone I knew who lived in a remote control apartment. I'm sure that the literature will show this is the case in general, but it's not the case in specific
> An empty-nester couple would likely find their 4BR apartment is cheaper than moving to a 2BR, so they stay - meaning families moving into the city have even fewer options and need to look at possibly stuffing themselves into smaller units.
Four bedroom apartments? Talk about a unicorn, these exist almost nowhere in reality. Hell, even three bedroom apartments are rare
I believe it was Denmark that had an interesting solution to this issue. It basically limited the maximum rent allowed based off the declared property value of the residence. Essentially, if you wanted to charge more rent, you had to pay higher taxes. If you wanted to lower your property tax bill (because you wanted to sit on an empty property) and declared your property value low enough, then whatever you declared could legally be bought by the government if they thought it was undervalued.
It was an interesting system that seemed to align the incentive structure for affordable rents and capping gains from land appriciation without actually improving the land value itself.
Well, that is the incentive. Basically, the asset owner has a disencentive to not undervalue their property value if the government is a willing buyer at that price who could turn around and resell it with a profit and at the market property tax rate.
In some us markets, this is sort done already with contesting property values in order to lower it and pay less taxes. However, there is no disencentive to discourage frivolous claims (aka, recent property sales reflect higher values than what ypu are saying). This fixes that.
Except property taxes are 3.8-4% of total tax revenues in Denmark (combined with wealth). It’s triple that in the US, with ~70% of local revenues coming from it.
Any reason why property tax rates / evaluations can't be adjusted to a higher revenue? I am not seeing how that will be an issue considering property tax rates already fluctuate that much between city and states.
Wouldn't you adjust the property tax rate at that point? At some point there is an equalization of revenue needs and asset values. We already do this when revenues don't match up with tax increases anyways or when it is too much with things like homestead exemptions.
And again, if someone wants to declare their property is valued at a bargain, then there is nothing to stop the government from buying it.
You said we already know the impacts of rent control but then cited a study and quoted it "therefore, the overall impact of rent control policy on the welfare of society is not clear"
There is literally no policy intervention in the world that has absolutely no negative effects and the free market doesn't work either... So what's the answer?
There are more boring policies like easier permit for multi-family housing and better rezoning which will increase housing supply, or government built housing in large scale like Singapore. But those take long time of planning, slow to see results and won't get anyone erected.
NYC is already a mixed-zoning area - meaning housing and shops are right on top of each other. It already has high-rises for both office buildings and apartment buildings. They do not need easier permits for multi-family buildings. Government built buildings are notorious across the board for being poor builds due to the tendency to have contracts to the lowest bidder. What NYC needs is a policy/ rules system that encourages conversion of office spaces to living spaces, because it's at the point where that's the only way to get MORE housing into the downtown areas where the majority of their housing issues reside.
Trying things to fix the problem with zoning and regulation driving up the cost or living, as if grocery stores margins are high due to anything but land value.
Yeah, 90 bucks isn't a lot. But if you ask a family what they could do with an extra 1000 dollars, im sure they can figure out a lot of ways to stretch that.
$90 isn't a lot, and there are downsides that will impose costs on small businesses and city budgets, which means that there is a narrow opening to be a net positive.
Much of it is directed at the middle class -- the bourgeoisie.
> hence the prefix social
Hmm I'll keep that in mind next time I attend a social gathering or socialize with friends or attend an ice cream social or a social mixer or meet a social butterfly or really anyone in my social circle, especially if they have social anxiety, but if we're practicing social distancing it may be best to reach out through social media.
All I can say is no, because that isn't what socialists do to my knowlege, feel free to educate me if you have some examples or something but you seem very tilted at this, did a socialist take your sweet roll or something.
My main beef with them is they helped Trump rise to power, they helped the Nazis rise to power in the 30s, they committed endless numbers of mass civilian killings, they spent a long time advocating for eugenics, and they take over every online discussion about US politics to tell people that voting is useless and they should just give up on democracy.
But historically it was a movement against the middle class, and especially against people and races associated with commerce.
It's also a bit like any other cult. They pretend to be nice and to care only about nice and good things as a matter of outreach. but the deeper you get in the social network the darker it becomes. There are many cases of them preying on people who are isolated and lonely and totally ruin their lives, to the point where the people end up in prison or killed for no benefit to anyone.
You have no idea what socialism is. You already admitted it, so everyone reading this conversation knows it.
Also I've noticed you've gone straight to ad hominems after asking me for examples and I replied to you.
But then again socialists don't have a great history of operating in good faith do they? Even back in the 1840s Marx was writing as if it was common knowledge that socialists routinely lie about their beliefs and goals to trick others into joining them.
All one has to do is touch grass and talk to an individual that escaped from socialism/communism because they are two sides of the same coin and individuals that espouse it can suffer the absolute worst.
Government grocery stores will hire employees too. And government often subsidizes the pay of cheapskates like Walmart with food stamps anyways may as well cut out the leech middlemen of the waltons when trying to feed people
Is this model going to help the working middle class in NYC that do not qualify for assistance. Or is it going to give the SNAP recipients 30% cheaper options using funds already supplied to them by the federal government? It seems like this system will eat itself alive fairly quickly.
It's their way of saying your question is akin to asking if Santa Claus is real. You may not know much about Santa Claus but you should know enough to not have to ask that question.
I was a bit confused. I can’t wrap my head around the mayors way of thinking. I live in Alabama where we have around 3% state grocery tax, in addition to city/county tax. Total around 5% for our groceries. New York does not have a grocery tax which I agree is a positive. The mayor announcing that they can sell groceries at 30% less than others, fresh produce being in that category, is he going to negotiate paying 30% less to farmers to pass on the savings to residents that already get federal subsidies? How is that going to be possible? The math just isn’t mathin’ to me. How many people in a city of that size is this really going to benefit? It is cutting off your nose to spite your face.
I can't understand it either but in any case you'll have the skeptics who believe in market forces and the believers who think it will work differently for them.
In any case, the result will be either Mamdani found a way to overturn the same fundamental business model that supermarkets and the supply-chain industry around the world has been based on for nearly a century or, proponents will come up with more excuses as to why it didn't work THIS time and how it will work the next.
They have tried it several times - huge taxpayer waste (not the main issue) but the five finger discount was the biggest issue. I am going to assume the city will have trouble paying vendors on time. I know when we sued for ours don’s education they were 100K behind on one point and my lawyer had to file suit to get payment after they had already settled. The city loves to wait until the last minute to pay bills - at least for special ed families.
I really can’t imagine this ends up being a net positive. I’m not a New Yorker so I don’t really have a dog in this fight, but this seems like a horrible policy that could have highly damaging effects on competing businesses
Even in a trial capacity, it’s still an economic disrupter that will broadly hurt small business/stores with less capacity to absorb shocks than the big guys
I’ve been reading into it and there is honestly is not a ton of evidence it’s done damage, and has actually increased foot traffic in the area.
There are caveats, of course. NYCs Bodegas are a bit different than other corner stores, the financing is much more continuous for the NYC program and the larger discount can change the dynamics. It also should be mentioned that public transit is much much better in NYC so that may make this a more appealing option to non-local shoppers. I still don’t like it, but if the Atlanta store is the benchmark it might work
And my local co-op is more expensive on specific things that other stores usually sell as loss leaders, but about 10-20% cheaper on everything else. As well as a 20% discount for members. Non members have to pay more, but it's a set amount for a person per month and a family per month or they offer yearly passes at a discount.
This is why we don't use anecdote to prove rules, but rather just direct research.
the difference in color between store bought yolks and farm fresh yolks is pretty wild. the yolks have such a deep rich orange color. sometimes they almost look red
I think the hardest thing for people to get over is the idea that everything is designed to make profit. The goal for these stores should and likely is to break even.
I look at this kind of like how I see the Costco whole chicken or the food court. Both those things are loss leaders that costco doesn't make a dime on but help to get people into the store overall and then they make money on everything else despite other products that are sold similarly at other stores being under competitors pricing (keurig's for example).
The real difficulty is going to be finding the right balance of products to hit this goal and is I think the primary challenge from a financial standpoint.
The moment you decide the gov isn’t in it to make a profit is the moment costs balloon.
The price of the actual groceries as an input is kind of irrelevant since is a commodity. It’s that Costco and others are insanely efficient at the back office and supply chain logistics. They have massive economies of scale and the only thing they care about is cost reduction in the pursuit of profit.
The mandate for a gov grocery store is low prices. OK, that’s fine. That’s the easy part. Who is going to be worried about all the rest of the costs. Mamdani and the gov have every interest to just pay whatever to make it look good politically. They have interest groups that will want fair union wages. They will be forced to negotiate with suppliers when they don’t have any expertise. The difference will be billed to the taxpayer.
The fundamental issue is Mamdani has much more to lose from a failed grocery store politically wise than just dumping taxpayer money into it to make it look like a success.
Correct about 0.5%-2% industry wide in the US. There is still margin to work with there which is why I'm more interested to see how this turns out than I might otherwise be.
This is a myth. The data points to 5% as the industry average. NYC is not average for most things and I imagine ( after living here for 8 years) that the prices I’m seeing (20-50% higher than Costco) means they aren’t as razor thin as they seem.
Doesn't even have to break even, look at the production value of a lot of things like high-speed rail and subway systems, they don't have to break a profit but they provide immeasurable value.
People also entirely miss the point that the city already spends millions subsidizing grocery stores. Mamdani's argument (right or wrong) is basically "let's cut out the middleman and subsidize the buyer directly."
Cutting out the middleman would be giving the money directly to residents and have them decide how to spend the money. This is the government deciding it can run grocery stores more efficiently than private industry.
You can "subsidize" the buyer by cutting taxes or offering payouts directly to those that need it. Just fail to see how this is the most efficient way to redistribute taxes.
Why not just give poor people vouchers? That would be far more efficient and help more people.
The answer is Mamdani wants to cut a blue ribbon in front of a store to post on tik tok. It’s good politics but horrific economics and slop public policy. . The fact people are this confused is scary.
When all of the privately-owned stores around the city grocery go out of business, are you gonna vote for a guy (or gal) who pledges to shut down the wasteful, inefficient city enterprise? Or are you gonna reelected Mamdani to keep the store you rely on open?
The fact that it's completely at odds with all evidence and expert opinion is a plus for them, because anyone who has actual expertise is an "elitist" or "bootlicker" or whatever other term makes them feel proud about their ignorance.
Many government services don't make a profit, for example parks. City residents can collectively make a decision: we want our pot of money to pay for public transit, libraries, health care, housing, and now... Food. This conceptually makes sense to me, but it's all in the implementation details. If my tax funds feed a poor person that seems to be a huge win.
It will make sense if a bread cost $10 and if you only pay $9.99 for the bread in tax dollars. Government don't have magic money. The money comes from you. If you are paying $20 tax for a $2 bread, they are screwing you, not helping you.
It's different from a park because no private business is selling you a park, or if you give the land to the private business, it will become a golf course instead of a park. There are plenty of groceries store selling you food for pretty efficient pricing, not some imaginary "rip off" price everyone imagined. The inflation is due to Trump and his policy, which people voted for.
Actually most of the grocery price inflation took place in 2022. It's running at a normal rate of inflation now, but prices aren't going DOWN, so people are pissed.
It also makes sense when you realize this will create many overpaid unionized government jobs, kickback contracts, and therefore expand the pool of people who will never vote to unwind this
>governments don't contract with themselves, but they do with private contractors.
And in their contracts, they tend to add a lot of provisions that raise prices. Like specifying the use of union labor and adding other specific requirements that aren't necessary but that inflate the prices.
>If a government does work directly, there is less space for people to siphon off wealth for personally enriching themselves.
There is more space to waste more money because the government has no incentive to save money, and every possible incentive to benefit favored groups, including steering contracts to favored donors.
I think this is a valid critique. There are lots of people in this discussion who think the food industry is just capitalism at it's finest when it's filled to the brim with government subsidies all the way down to the farmers and ranchers.
Organizations that arent motivated to make a profit typically dont perform well as they aren't punished when they do a bad job. The people running them still make a salary regardless if they actually succeed in their mission.
Ie. See government agencies/NGOs that were in charge of managing Los Angeles' homelessness crisis. $12 billion tax payer dollars spent and homelessness has gone up.
The problem isn't profitability, it's sustainability. Costs never stop rising. That's why every competent government in the world strives for maximum efficiency if not outright profitability. Failing that, they're forced to cut costs and reduce services because you can't just raise taxes indefinitely.
This argument doesn't make sense - you can't increase profitability infinitly either - so taking either calculation to 'infinity' doesn't help solve an issue.
As someone else mentioned - its less efficient to subsidize private grocery stores than it is to fund one directly, and pass those savings off to the buyers.
More to the point - the goal of government isn't to be the most 'efficient'. Efficiency is "Just in Time" logistical delivery and "Variable Pricing". Efficiency isn't always supposed to be the goal.
When you increase efficiency, you decrease redundancy and resilience.
Governments are supposed to be the supplier of last resort, they NEED to be there when other markets fail. Which means - they spend more with the risk of waste, so that they can meet the needs when no one else can.
These grocery stores don't exist in a vacuum. Their operating budget has to come from somewhere and dozens of other departments vying for a piece of the city's tax revenue.
So as their profit margin shrinks from 3% to 1% to negative, thanks to all kinds of externalities, what do they do? Hope that they grab a piece of someone else's budget? Bank on taxes getting raised further? Or start charging more and undermine their value proposition?
Again, if there were easy answers every country in the world wouldn't be wrestling with these problems.
Are we talking the city stores, or other stores in the area?
If the former: yes, they are likely operating at a loss, which is likely intended and completely possible for government - government exists to provide service first, not profit.
If other stores - then yes, you are introducing more supply, which means some stores might suffer. But, that was also anticipated - the private stores in the city WEREN'T serving the needs of the population. The city store serves as increased pressure for them to adjust their business plans.
And this is because, fundamentally, there is no guarantee that profit as a motive always leads to better quality of life. It works in some cases, and others, the profit pursuit comes at the cost of public good.
Also the governments job isn't to turn a profit. It's often to make/administer laws and take care of citizens. Even if these stores lose some money subsidizing food, you know, the thing everybody neess to live, isn't that what we ultimatwly pay taxes for, to provide a service a servive to tax payers
That's magical math. Unless the government have magical ways to make food cheaper, you are better to use your tax dollars to buy food directly, instead of paying more money to the government to buy the same food. Even if they don't make profit, it'll still cost more to buy from a for profit business due to logistic and administrations. We had tried that in some countries before, it had 100% failure rate.
Food stamps are federal and pay for all the food. This is municipal and only pays for the 30% trim. So no, Mamdani can't provide more food stamps, and no, it wouldn't be cheaper.
Nonsense. SNAP is federal, CFAP is state, Health Bucks is municipal. Every level of government can and does provide food subsidies.
City food vouchers would be immensely more efficient since there's no infrastructure costs, leveraging of existing private retail infrastructure, vouchers can be used anywhere in the city instead of one store per borough, and doesn't run off existing businesses that wouldn't be able to compete with government stores running on free real estate and tax exemptions.
No, they'll sell it for $3.50 because that's 30% of $5.00, and yes, that difference will be paid for out of the billions Mamdani has already saved in the City's budget.
He literally saved almost $4bn from a few tweaks to CityFEHP, delaying classroom size increases, and pension refinancing. Y'all legit have no idea what you're talking about and should spend literally 30s looking into the things he's actually done before you come in here making fools of yourselves.
And he didn't ask Albany for anything, the State government simply funded its #1 driver of tax revenue which is NYC.
False. He's saved ~$3.4bn alone through simple tweaks to things like CityFHEPS, class size requirements, education costs, and pension refinancing.
Also, Albany allocating money to New York City isn't a bail out, it's the State government funding its #1 driver of tax revenue. You don't even know what that term means so keep yapping lmao
Dude balances the budget in 170 days and gives his constituents cheaper groceries and y'all somehow still salty. s
Simple tweaks like delaying pension contributions and delaying the class size reductions that unions wanted?
Wow, what a genius. Nobody else could have thought up imaginative solutions such as kicking the can down the road!
What genius solutions will he come up with if Hochul decides to not pay up in future years, or when the pension payments need to happen, or when the unions refuse to delay education investments anymore? What then?
I am not saying they don’t do anything or should not do anything beyond protecting rights. I am saying that things like “should the government open grocery stores” is not something you are going to find support for outside of a few select dense areas.
A few select dense areas is a pretty funny way of saying the most populated, diverse and economically productive metropolitan center in all of North America.
Not making a profit means it’s not a workable or scalable solution to fix food dessert. There is only so much tax dollars you can put into loss generating ventures. Every loss means less money for the government to spend on other social programs.
> The goal for these stores should and likely is to break even.
I think Mamdani disagrees with you. What I got from the article is that the stores are going to actively lose money and cost the taxpayers. At best, their goal is to obfuscate the losses a bit, make them harder to tally up cleanly.
Yea but that's ONE item or a handful of items to lure u in. They make a lot more money on all the other stuff. Airconditioners, lamb shanks, tacos, bakery.
Mamdani is gonna be a whole store just selling everything at a loss. EVERYTHING at a loss.
> I think the hardest thing for people to get over is the idea that everything is designed to make profit
Why do uneducated people come onto an economics sub and say things like this? The profit motive is what makes the private sector so efficient and so much better at feeding people than the government run grocery stores
I like the general premise of this whole thing, but I will say that there are so many neighborhood grocery stores often run by minorities that will suffer if he really tries this. I think there are other things I can focus on but since he campaign on it I think they have to go through with trying it, and if nothing else I'll give us some really good data on how to do this because I think there are communities especially in rural area where this is the right answer.
None of the big grocers earn close to 5%. Kroger and most others are <1%. The only ones I can find that are over 2% are places like Costco and Walmart that make the vast majority of their profits from higher margin goods outside of groceries, memberships etc.
I think they decided no cooked foods so the bodegas will get some business…but don’t all the food insecurity people talk about people working multiple jobs that cannot cook or don’t have the means to cook. I read a lot about it and they seemed to brush this stuff aside so I guess it is rhetoric from those advocates.
> “If one publicly owned grocery store that brings prices down in the neighborhood is enough to put someone out of business, then maybe they shouldn’t have been in that business in the first place,” Mr. Gordillo said.
Socialist is going to find out the definition of second order affects the hard way; Some stories will respond by not selling these “essential” goods, as they won’t sell the products at a loss.
Other stores will rise prices to game the system. The “essentials” become more expensive than the no essential alternatives.
Then there is risk of over demand of these tax payer subsidised shopping centres.
This is essentially just how amazon and walmart built their companies but people are seemingly only mad when the government might do it. Uber/Lyft ran completely unprofitable attempting to bankrupt the cab industry. The entire AI industry is a money pit attempting to get people hooked on low cost plans before switching over to a more expensive token model. Teams is trying to kill slack by being included (free) instead of being itself a paid product.
There are many many examples of capitalism where competitors have artificially kept prices lower and drive out competitors whom they then took over for. This plan might even just become a prudent example of cutthroat capitalism.
Time will tell but either way it'll provide good data to look at.
People are mad because burning taxpayer money on low return projects is dumb. No one cares if Ventura capitalist and billionaires lose their money on poor investments in Uber, Lyft WeWork etc..
These are city owned grocery stores, my friend. They assumedly will not operate for profit, they operate for public good.
The whole point of this is that it is a choice to reorient parts of the economy so that they are
immune from the market dynamics of late stage capitalism that you seem to think are facts of life.
What you described is a how the market might react to a half assed and poorly designed govt intervention in a hypercapitalist system, not how a socialist system would react.
It very well might! Mamdani admin should absolutely be smart about the way this is implimented to reduce the negative impact. The AI bumble bursting will hurt many retirement savings and pensions. Single Payer Healthcare will eventually cause many job losses in the insurance industry. The economy is complex. Struggling people having the basics for survival should be a primary goal of any rational system right? Clearly that is not being provided now, is it primarily bodega owners who profit from this or folks higher up the food chain?
I guess it depends whether the meat is cheap enough to draw shoppers from other parts of the city, thereby depriving other stores of their margin/revenue, adding to "food desertification."
They used to spend dollars at for profit stores. When they spend them at the competitor that's underwritten by the state, what happens to the original stores?
If the socialist aspect is the part you're choking on, consider that this is how Walmart killed Main St. businesses too.
So you are operating on the assumption that enough of these stores will be established to put bodega out of business, and then also that the Mamdani stores will disappear and leave a food desert? Bc with out the leaving part, all I see is people getting fed.
The walmart example is an interesting one, except eliminating competition is part of their business model. Surely that wont be the case for these Mamdani stores. As ive said, he certainly has a responsibility and ability to make sure impacts to the broader food supply industry are minimized (Income based eligibility for example). I would hope he does those things.
You are making a lot of "bad faith" assumptions about the carelessness about which this program will be run.
Most people who can afford regular prices will not be running to government subsidized stores because I am guessing that the variety of foods and different brands will be in less and focus on just essentials and most who can afford to do so won't want to waste time going to multiple stores. I invariably go to one store that has the most of what we like to eat, rather than try to shop around for the best price. However, if I were struggling to put food on my table, I'd put in the effort. Overall, there are plenty of customers for regular stores to stay in business in a densely populated city like NY. So my guess is that this will work as intended for those who need it the most.
For shits and giggles I asked Claude to take 2 publicly traded grocers financials and determine what could happen.
It is also very unlikely that Mamdani can match Kroger and Albertson's purchasing power.
Yes, I realize this is a simple exercise but gives an idea of what would happen
FY2025 for both with a 30% decline in revenue.
Kroger:
Rev 103.3B
COGS (fixed) 113.8B
Gross profit -10.5B
Operating expenses 31.9B
Net loss 43B
Albertsons:
Rev 58.22B
COGS 60.57B
Gross profit -2.35B
Operating expenses 21.8B
Net loss 24B
Other things
We can assume that these stores will be staffed with NYC government workers. The costs for these workers is likely to be $6-7 more per hour for the NYC benefits/wages.
Loss of economies of scale, in addition to raw goods purchasing power. These grocers obviously have complex systems in place for SCM, management etc.
I dont give a shit about groceries. Fix the housing problem. This is the real issue. If mayors actually promoted new builds then everyone could afford a home
You really think all the transplants who shop at Trader Joe’s are hauling their butts to Hunt’s Point. They will get to meet all the drug addicts hanging out at the 125th Station in Harlem near all the methadone clinics. It’s good for them to get out of LIC, Williamsburg, Below 14th Street, and Astoria. I agree with the poster above. Housing more pressing than this.
If you look at a store like Aldi and compare it to Kroger you start to see just how much shit gets marked up and how inefficient these mega grocery stores are. Yes some things are sold at a loss and others are sold at 40% markup. Some grocery stores maintain an expensive seafood department where much of the product is discarded instead of being marked down. If they follow the aldi model of efficient food sales, private label items, etc they absolutely can make this work. They could probably also do a coop model of local first with affordable produce bought in bulk. If they just mirror a Kroger / Fred Meyer / Metro Market / Ralphs / Pick 'n Save / Harris Teeter (these are all the same company and a box of cereal costs like $7 for some reason ) then they probably will fail as their customers don't seem to price shop.
Snlxdd | a day ago
Can’t get past the paywall, but I’m curious how they’re calculating the discount here.
Traditionally, milk and other staples are loss leaders for grocery stores and already sold at a “discount” from wholesale. DECA (the military grocer) ran into an issue where they tried to operate with a fixed margin, but shoppers thought they were more expensive because they didn’t have these loss leaders.
So, could see this being a case where they’re just slightly below other stores, which are already selling at a loss. Then claiming that it’s a 30% discount when in practice it’s significantly less.
Super_Mario_Luigi | a day ago
Here's the math:
Pasta and beans 30% cheaper than your most expensive bodega
$100 million operating cost
Simple math
mister_empty_pants | 22 hours ago
Dang. So they're still 200% more expensive than a sensible grocery store.
FaultRoutine3520 | 20 hours ago
What are the sensible grocery stores in NYC?
cocktails4 | 19 hours ago
Trader Joe's, Whole Foods, Aldi, Lidl, Wegman's, everything in Chinatown, Food Bazaar on a good day, Western Beef
Avoid: City Fresh, Met Fresh, CTown, Associated, Key Food, Foodtown, Morton Williams, D'Agostino, and especially fuck Gristedes
FaultRoutine3520 | 19 hours ago
Expensive, all of them. So what’s your definition of sensible when all of these chains have markups of 10-20% to non upscale grocery stores.
cocktails4 | 19 hours ago
What exactly is your reference non-upscale grocery store in NYC?
FaultRoutine3520 | 18 hours ago
Key foods, food bazaar, shop fair.
cocktails4 | 17 hours ago
I don't know what magical Key Foods you're near but mine is disgusting, overpriced, and frequently sells long expired products.
FaultRoutine3520 | 17 hours ago
Exactly my point but that’s all e got
vbsteez | 13 hours ago
Not whole foods
cocktails4 | 11 hours ago
Do you live in NYC or know the first thing about NYC grocery stores?
vbsteez | 9 hours ago
Yes, would be hard for me not to.
Do you want my bodega order, bus line, and slice place too?
jay10033 | 4 hours ago
Where did you get your data on the mark up?
FaultRoutine3520 | 3 hours ago
I grocery shop every week, and I go between Costco and the local store. I buy where ever is cheapest. Look at TP, tuna, flour, sugar, milk , eggs, pasta, meat. I calculate it all and go to whichever I can find is cheapest.
Costco has the lowest price and better quality for most items.
SueNYC1966 | 4 hours ago
Come to the Bronx. We have several.
FaultRoutine3520 | 3 hours ago
I’m in the Bronx. I agree we have sensible ones but given his list, I want to know what is sensible
SinghamSlop | 19 hours ago
Here’s the math. Pasta and beans bought by bodegas at 30 percent of cost.
Resold in bodega or alternatively;
Exists to be a front for the usual EBT/SNAP fraud.
Slow-Temporary-1489 | 9 hours ago
Uh huh. You got any proof for any of this? Or is it "Source, trust me bro?"
What I've noticed is that anytime someone is commenting on a Democratic policy, they will always pull out the fraud card
SinghamSlop | 9 hours ago
You can easily find this. You can do it.
Slow-Temporary-1489 | 9 hours ago
So, it was source, trust me bro
SinghamSlop | 8 hours ago
Yep. You can easily see this in any DOJ / Eastern District of NY fraud case work or walk into a bodega and see Kirkland products. Plenty of articles on the subject. Have a horrific day!
Petrichordates | 8 hours ago
This is a socialist policy moreso than a Democratic one. Democrats tend to work with the market rather than use state interventions that disrupt it.
dmadSTL | 7 hours ago
Liberal democrats, sure. Others, less so. I'll take this moment to say the market is not perfect, does not operate in a vacuum, and sometimes state intervention is necessary.
djdjddhshdbhd | 17 hours ago
It’s based on an average from grocery stores. In his speech. Why lie
derpasuarusx | 23 hours ago
Unlike corporations, government run grocery stores aren't profit driven, so they have no reason to scalp prices unreasonably and throw out unbought food. Non government grocery stores are ludicrously wasteful and inefficient on a societal level since their goal isn't to feed people, but to make as much money as possible
Marlsfarp | 22 hours ago
Grocery stores throw away expired food because there are required to (and should be). They are not inefficient at all - grocery stores typically have only ~2% profit margins.
Suspicious_Chart5817 | 22 hours ago
You think the problem with grocery stores is they don't sell you expired food?
more_housing_co-ops | 22 hours ago
That's not what they wrote in their comment.
memtiger | 20 hours ago
>government run grocery stores aren't profit driven
Correct. They are corruption driven. Someone is getting a hefty cut under the table at the tax payers expense.
Additionally, because they can't financially go out of business, there's no desire to run things efficiently or spend money innovating in ways to reduce costs.
derpasuarusx | 19 hours ago
Wow you must mald hard at every public works project, do you think roads should be managed privately roo
SueNYC1966 | 4 hours ago
No, but it has been tried before and usually a disaster. Better to give the money to food banks.
jay10033 | 4 hours ago
So government grocery stores will be exempt from health codes passed by the same government?
NotveryfunnyPROD | 14 hours ago
Well there’s gross margins and net margins. Most grocery stores operate at low net margins. But if you were a government backed program conceivably you can strip out some income tax and real estate rent. That would probably be 20% net margins right there.
Snlxdd | 7 hours ago
There’s gross (Revenue - COGS), operating (gross - operating expenses), then net (operating - tax and interest expenses)
Income tax is negligible in relation to revenue, was roughly .1% for Kroger looking at TTM. Harder to find rent, but it’s not making up the 20% difference. Operating expenses in total were roughly 20% and a lot of that is in salaries, hourly pay, overhead expenses, keeping the lights on, etc.
Not to mention, both of those are opportunity costs, so they’re being subsidized by the tax payers as well, not “savings”
Alternative_Read8760 | 6 hours ago
20% on rent and taxes is extremely hopeful when considering the mamdani plan, but that's ok because the subsidies will cover the rest. Subsidies, by the way, is a different way of saying taxpayer funding. Relying on taxpayer funding is a very bad way to design state policy with regard to food. Every lost taxpayer due to tax increases is generally a 2:1 loss in tax revenue after the tax increase, more or less depending on the increase, but it's not just lost taxpayer base, because those taxpayers were also consumers and that will be gone as well. If I was to choose one system to overhaul it would definitely not be the one that has a 1%-2% profit margin, that would rank near the bottom, in fact.
Lzy_nerd | a day ago
From his press conference, it sounds like they will be taking a sampling of prices from competitors and marking it down every month. So, it sounds like it will actually be much cheaper, taking the savings government ownership and passing them directly on to the consumer.
irrational_econ_ | a day ago
But groceries aren’t sold with anywhere near a 30% profit margin, so where are these savings coming from?
So it’s more shifting 30% of the price of groceries from the individual budget to the governments.
MrOaiki | a day ago
The operating margin on groceries in Sweden is about 3%. I imagine they’re about the same in the US. So I too wonder where the 30% is taken from.
A_Genius | 23 hours ago
Subsidies from taxpayers.
DTFH_ | 18 hours ago
I like to think its the logical extension of a food bank and offering SNAP cards, but a more evolved model which we'll see if its a better fit; I could easily see banks turning into grocers with a little government assistance and incentive if the structure works better.
The12th_secret_spice | 18 hours ago
Im paying taxes already, might as well get cheaper groceries out of it. Sounds good to me.
benadreti_17 | 18 hours ago
Yea people will try to take advantage of it, but it the stock, force the "store" to buy more and increase the program's deficit, requiring even more taxpayer money. This will work great
The12th_secret_spice | 18 hours ago
I don’t understand what you’re trying to say.
You think it will be so successful at undercutting corporate supermarkets that it’s going to cost more money for the government to run?
I bet anyone working full time but struggling to buy groceries would take this trade off for immediate help with their grocery bill.
benadreti_17 | 18 hours ago
I'm saying the cost of the program will need to be filled by something, most likely taxes.
The12th_secret_spice | 18 hours ago
Obviously, that’s how these programs work. I don’t know how someone “takes advantage” of a subsidized store that is available to everyone.
That’s like saying some people take advantage of public libraries.
LunaD0g273 | a day ago
No real estate tax + taxpayer money.
juice06870 | 23 hours ago
His ass
gimpwiz | 21 hours ago
> so where are these savings coming from?
Taxpayers.
Given the low gross margins of grocery stores, any claim that they'll be profitable while selling food at 30% less cost (not 30% less markup) is fairy dust.
I don't know that NYC taxpayers will actually mind, as a whole, honestly. It's not all that different from other subsidized food that's done in ten different ways already. They'll let us know at the voting booth.
jay10033 | 4 hours ago
For a city with a persistent growing budget deficit, we sort of mind.
Alternative_Read8760 | 6 hours ago
A portion of those who can leave, those making $150k+, will leave and have been leaving for a while now. According to the city comptroller, there was a net loss of 15,552 high-earners who left the city last year (that's net, so accounts for any who moved in).
mattw08 | 18 hours ago
Wonder if they will be smart enough to limit purchases for customers so they aren’t reselling.
mottledmussel | 8 hours ago
Especially, if they're selling low-margin staples at below wholesale.
SueNYC1966 | 4 hours ago
I am just driving up with my SUV and letting our family out if that is the case a- especially steak 30% off.
FaultRoutine3520 | 7 hours ago
Can easily do that with Costco. You don’t see much of that here.
mattw08 | 3 hours ago
Costco isn’t 30% cheaper though.
FaultRoutine3520 | 20 hours ago
I know for some products I buy in my grocery store it’s 30-50% as compared to Costco.
So this idea that it’s 5% profit across the industry, sure. But NYC may higher than the average. Would love to see numbers from grocers in NYC.
Lzy_nerd | a day ago
As much as I personally would love for us to collectively subsidize our grocery bills, I don’t think that’s what’s going on. It sounds to me like they are running the military commissary model. They aren’t using tax revenue to pay for the 30% margin, they just don’t have to pay taxes themselves and aren’t interested in generating profit. I don’t know the full breakdown of what they’re saving on, but it sounds like a different model than the free buses; which would be using tax revenue to cover the cost instead of a fair.
irrational_econ_ | a day ago
Exemptions from taxes is just a mechanism is pass on a subsidy - that revenue is no longer entering the governments budget and acts in the same way as a subsidy.
To me it is still a direct transfer of costs from the individual to the government.
Lzy_nerd | a day ago
Ok, but we are already doing it, and it’s working.
https://youtu.be/PQOXdtPBGXI
stevent1221 | 13 hours ago
The commissary serves serves approximately 8.3 million servicemembers and their families. It is subsidized by 345 million Americans.
NY city has a population slightly larger then what the commissary serves coming in at 8.5 million but they only have 8.5 million tax payers to subsidize it.
He even mentions in the video the subsidy for the commissary is 1.5 billion although he try's to downplay it as part of the defense budget ( its only 2%! ) which is dishonest to say the least.
Also, there is a 5% surcharge at the commissary (I am army retired) that is conveniently not mentioned when people bring up this argument.
The video guy try's to make everything sound basic. He doesn't mention utilities, building upkeep, security, supply chain, logistics, or the host of other things a store has to pay. Its not as simple as "this costs $2.00 so I can sell it for $2.01" like he tries to make it out to be.
irrational_econ_ | a day ago
But it is an unsustainable model on a mass scale because in the end the government is paying 30% of your grocery bill and that’ll just come out of taxation.
I’m sure this pilot will run for his term of office but I would be surprised if in a few years it was expanded to anymore than these 5 locations. After he’s gone I’d expect at some point they’ll be quietly closed as too costly.
Lzy_nerd | 23 hours ago
What’s unsustainable? It’s still taking in revenue to keep its self afloat, and if it’s under the same structure as military commissaries then the only cost is in unrealized tax revenue. Tax’s that could be collected from a private store.
However, our country is littered with such waste, non of which do what tax’s should be used for, like making groceries cheaper. If you’re really worried about tax potential that goes wasted, are you equally worried about suburban neighborhoods? What about parking lots? These are massive waste of space that rob us far more resources than a couple grocery stores.
PSUVB | 23 hours ago
The country is littered with wastes of taxpayer money. So the solution is we should add another way to waste taxpayer money. Interesting
Lzy_nerd | 23 hours ago
Food isn’t a waste
nbx909 | 19 hours ago
You are right we should spend our tax money on things like another war, not silly things like making food cheaper for everyone. New York choose to spend their tax money in this way by who they voted for. If they don’t like it, then the can vote for someone else next time.
Unhelpfulperson | 23 hours ago
I am very worried about free parking and suburban neighborhoods and I think every mayor should take those seriously as fiscal problems (mostly the non-NYC mayors). What I’m worried about with the stores is that are a fiscal cost that also don’t really provide cheap groceries to people, which there are lots of reasons to be concerned that they won’t.
jay10033 | 4 hours ago
Groceries are already exempt from sales taxes.
Wellontheotherhand1 | 23 hours ago
Every single thing our government does is unsustainable in the long run. It's just a matter of how long it's unsustainable for.
Dangerous-Sport-2347 | 21 hours ago
The problem isn't inherent in the goverment subsidizing groceries. They take tax money, which is taxed progressively, and then hand it out in a manner which is advantageous to the poor ( they spend a much larger % on groceries ).
Not so different from many other forms of welfare.
The problem comes in making the government run business run at similar efficiency as the competitive ones on the market. As we've seen in many centrally planned economies, easy for it to languish in corruption and low productivity.
Alternative_Read8760 | 6 hours ago
Grocery stores aren't paying anything hing close to 30% in taxes.
aznology | 22 hours ago
Food is already not taxed tho
CuriosityKillsHer | 21 hours ago
Property is.
naijaboiler | a day ago
i know groceries are run on razor cheap margins. Yet i see Market Basket around me be some 12-25% less than Stop n Shop or target, easily som 40% less than Whole foods, yet has more cashiers, and they still make enough profit that the family that owns it keep fighting over it.
I once asked a Market Basket manager, how the math maths, he said volume.
My point, a well run grocery store, with enough volume, can sell at up to some 20% cheaper
Unhelpfulperson | a day ago
Yeah but the big thing is that it seems like a non-trivial task to run a grocery store better than other grocery stores. I don't have any reason to believe that government-run grocery stores would automatically have the economies of scale and the management of Market Basket rather than the worst Stop n Shop
A_Genius | 23 hours ago
Also with no profit incentive the employees will unionize and make 40 bucks an hour with no pushback from management because there is profit incentive.
LogoffWorkout | 23 hours ago
have you ever been to a bodega? they have to be like the most innefficient way to distribute groceries. Its like $8 a gallon of milk. Half of what bodgas carry is from them buying from other box retailers. A milk truck driving around to 40 bodegas all a block away from each other and using a 2 wheeler to bring each one 32 gallons of milk 5 days a week.
Aldi has to be the most efficeint grocer, imo, the city of NY should just subsidize whatever they need and get cheap groceries to the peole of ny. I bet if Mamdani went to Aldi, and said NYC needs 24 Aldis throughout the city, they could come back with exactly what they needed to make that happen, and it would be more efficient.
Intelligent_Read_697 | 8 hours ago
You still have to pay profits to Aldi…so why pay that?
FaultRoutine3520 | 7 hours ago
That exactly why they’ve asked private grocery stores to run them. Who knows better than the people in the current industry?
rasp215 | 22 hours ago
Are they going to be 30% less than aldi or 30% less than Whole Foods. That makes a huge difference
presidents_choice | a day ago
So like.. Walmart?
Snlxdd | a day ago
Very interested to see how it pans out.
I imagine they’ll get some savings from being government run and having subsidization. But can also see some increased operating costs due to economies of scale.
Prestigious_Load1699 | 10 hours ago
They will quickly run out of food that is artificially cheap, just like the Soviet Union.
This is an absolutely F-Tier policy that one should expect from the economically-ignorant likes of the DSA.
Borbit85 | 4 hours ago
Wouldn't the other grocery stores basically be forced to lower their prices as well? And than next month these government stores have to go 30% under that new lower median price. That kind off looks like a feedback loop. Off course I like cheaper grocery every month as much as the next guy. But it doesn't look very sustainable.
makemeking706 | a day ago
Theoretically, the savings would diminish over time as grocery stores lower their prices to compete for customers.
BUKKAKALYPSE_NOW | a day ago
Grocery stores already sell products on small margins. It’s impossible to compete with someone who is selling all their products at a loss and making up the difference with taxpayer money.
Unhelpfulperson | a day ago
Probably what will happen is that other grocery stores don't lower their prices. Instead they'll outcompete the public grocery stores in any number of other ways like having better hours, better service, better selection, better variety, etc.
[OP] IvoryTowerResident | 23 hours ago
probably better access. 5 stores for the entire city probably not very accessible.
A_Genius | 23 hours ago
If it is truly 30 percent cheaper there is incentives for entrepreneurs to buy up as much stock as they can and open their own tiny businesses where they deliver groceries and keep 20 percent for themselves.
[OP] IvoryTowerResident | 23 hours ago
brilliant!
makemeking706 | a day ago
I guess they will have to accept even less profit, go out of business, or find a way to compete on something besides cost.
rasp215 | 22 hours ago
How can you accept less profit than 3%
Cliffhanger87 | a day ago
And that would be a success lol. The savings don’t diminish for the customer if other stores lower their prices in response
BUKKAKALYPSE_NOW | a day ago
Grocery stores usually operate on a 1-3% profit margin, which is to say there’s not much they can actually reduce their prices by and still stay in business. Getting undercut by 30% means that any nearby stores will just get pushed out of business
klingma | a day ago
Not really though, as the grocery stores really aren't crushing consumers with their pricing - they operate on razor thin margins. Maybe this will get producers to lower their costs, but they too aren't exactly crushing consumers as their input costs have risen.
Passncatch | a day ago
The savings would come from cutting out all the extra costs (middlemen) that are basically unnecessary expanses in the first place. The producers would probably get paid the same.
Snlxdd | 23 hours ago
What middlemen are you cutting out? This model won’t supplant any of the suppliers as that’s still a necessary step.
You can argue that you’d reduce marketing costs. But grocers are already trying to minimize that to the extent that it’s practical.
mister_empty_pants | 22 hours ago
All those useless people like the employees stocking shelves, truck drivers bringing the product to the store, food processors that prepare and package the food, farmers that produce it, etc. All capitalist bloat.
Prestigious_Load1699 | 10 hours ago
You will starve and you will like it, comrade.
Passncatch | 23 hours ago
Pls tell me how direct to consumer is more expensive then direct through corporate. Lol
Snlxdd | 23 hours ago
These stores aren’t direct to consumer.
Direct to consumer would be cutting out the grocery store and buying direct from the supplier. Then theoretically you’d save money on the operating margin required to run a grocery store.
Grocery stores need to find suppliers in order to get products to stock their shelves. Same thing applies whether it’s a government store or corporate store.
A_Genius | 23 hours ago
Ever been to a farmers market and seen what they are trying to sell onions and carrots for?
WillowgirlIII | 19 hours ago
Those are free range, artisanal onions and carrots tho!
LittleMsSavoirFaire | a day ago
So is the city just eating the difference on meat and dairy? Or do they have some secret government cheese style discount source?
Legitimately, isn't it just cheaper to fund a food bank in food deserts instead of distorting the market this way?
doubagilga | 16 hours ago
First you fill a cave with cheese to save the dairy farmers…
WantCookiesNow | a day ago
2nd paragraph:
“The city will build the stores and waive rent and property taxes. It is also expected to provide an operating subsidy to help pay for the discounts.”
I consider these no different from the commissaries on military bases where groceries are cheaper than (subsidized) what you’d find “on the economy” (retail stores). I’d love to know if my thinking is accurate.
Suspicious_Chart5817 | 22 hours ago
Military commissaries are completely different. Congress gives commissaries $1.57 billion annually on only ~5.5. billion in sales. Congress also exempts commissaries from virtually all taxes. Commissaries can also pay less the federal minimum wage. In fact, some employees are paid 0.00 and work just for tips.
It's because of a specific statutory exemption passed by Congress in 1978 (Public Law 95-485), which amended the definitions within federal labor law. Bottom line there's plenty in the military that's uncompensated labor. Military-industrial goes brrr; if troops need to be fed the DeCA can't say no. The fact some officer wives in Coronado have milk a dollar cheaper is missing the forest for the trees.
NYC is not child labor and paying 7.50/hr and taking infinite money from Congress and flying in cargo planes courtesy of the Air Force. People talking about operational costs and profit margins are blowing smoke up people's asses. It's two ships sailing past each other in the middle of the night.
WantCookiesNow | 18 hours ago
Exactly the kind of info/correction I was looking for. Thank you!!
SueNYC1966 | 4 hours ago
Someone did a walk through on Tik Tok. I posted all the flyers in my neighborhood in the Bronx from the weekly set and showed them they could everything cheaper here with the price leaders. I wasn’t that impressed with the prices. They took down my posts with pics and dates circled. You just need to learn to shop sales. They go in cycles.
The_Brian | a day ago
Commissaries operate nothing like that second paragraph describes unless maybe the PX's run different, but those are completely different things. A good month was 10% in the red, and their was often pushes to not be at 15.
People are going to lose their minds at the millions this is going to cost.
WillowgirlIII | 19 hours ago
I once saw an Indian tribe do something similar, except it was with a gas station that had MTO foods.
At its peak, it had 50 full-time employees, all drawing full benefits. LOL
Eventually the thing became such a white elephant that they sacked the bright-eyed young college graduate (English degree) tribal member they had hired to run it and turned it over to an experienced convenience store owner, who quickly whipped it into shape (out with the salad bar, in with the deep fryer!) and made it profitable by selling cartons of cigarettes (sans tax stamps) on the downlow to the nearest town's non-Native businesses.
ronreadingpa | a day ago
City will build the stores. Maybe NYC will be thrifty about it, but could foresee these costing tens of millions just for a fit out. If new construction, potentially $100+ million to accommodate the store, other stores, and/or low-income housing. Basically, a large, expensive grift.
Wonder who gets to run these stores? Rent free too. Presumably not anyone. Presumably need to have special connections along with checking various demographic boxes.
Maybe it will all be great, but have strong doubts. A co-op would be a better way. And even those generally struggle. Grocery business is tough even for the big-name retailers.
SueNYC1966 | 4 hours ago
I hope it won’t become a 18 month fight between the veterans and the ex-drug convicts fighting it out for the cannabis dispensaries. Remember when that happened. We had a pot shop on every corner until they worked that out. I think the state one bit veterans think they get first dibs on stuff like this..
throwaway880729 | 18 hours ago
OK but then the city is just taking away property taxes it could have collected by doing something else. It's still losing money - opportunity tax in a way.
If you want to subsidize stuff and provide government assistance, why do it by running a logistically complex, price competitive business where you need scale to operate efficiently? There's no good reason for it, even if your goals are noble, all you're doing is setting a match to a pile of cash in the sake of "trying to be nice".
WantCookiesNow | 17 hours ago
"If you want to subsidize stuff and provide government assistance, why do it by running a logistically complex, price competitive business where you need scale to operate efficiently"
Like universal healthcare? :)
Super_Mario_Luigi | a day ago
It's cheaper to get discounters like aldi in there. However that's not collectively enough
Prestigious_Load1699 | 10 hours ago
New Yorkers keenly await the warmth of collectivism as their grocery stores are run into insolvency by Mamdani’s brilliant policies.
SueNYC1966 | 4 hours ago
They dud big say they would be doing it on meat during the campaign. If they do I am buying a chest freezer..
Little_Big_Burglar | a day ago
As others have stated, the point is not to generate revenue. Even if it's operated at a loss, it can be successful.
I imagine the reason a person would prefer a grocery store to a food pantry is: options and being able to shop instead of stand in line waiting for food you didn't select (maybe that's not universal to food pantries but that's what I've seen where I live).
I mean, why don't you go to a food pantry instead of a grocery store?
Super_Mario_Luigi | a day ago
Every spending loss is seen as a success. The budget crisis is always a mystery except for needing more taxes
Mr_Axelg | 21 hours ago
this is a horrible way to look at the world. Why collect taxes at all? All this program does is make the city subsidize food at the expense of the local bodegas, grocery stores and the taxpayer. Seems like a silly waste of money but at least it will be measured in the millions and not billions.
Little_Big_Burglar | 21 hours ago
Taxes should be used to benefit the populous. I think the issue is some of these neighborhoods don't really have many options, so opening a grocery store provides healthier food options where they couldn't get them previously (bodegas aren't generally known for their produce sections).
I don't see how this is a horrible way to look at the world. I see someone trying to do good, using tax payer money to benefit tax payers. It's better than doing nothing and collecting taxes that only go to admin that bloat the system.
DeflatedDirigible | 20 hours ago
The private grocery stores only left due to rampant theft. The solution is to reduce theft, not put all private grocers and bodegas out of business and heavily subsidize one government grocery store per borough.
Little_Big_Burglar | 19 hours ago
Oh yeah they just need to hit the "reduce crime" button.
Crime can be reduced by providing affordable groceries so that paychecks go further.
I have no idea why people are simping so hard for bodegas and existing grocery stores. Neither group will suffer any significant losses. Bodegas probably make way more money selling cigs, beer and impulse items than they do grocery items.
I'm guessing people with the strongest opinions aren't even living in new york.
WillowgirlIII | 19 hours ago
> Crime can be reduced by providing affordable groceries so that paychecks go further.
Don't know many thieves do you?
Little_Big_Burglar | 19 hours ago
It's easy to criticize when you don't have any of your own ideas
throwaway880729 | 18 hours ago
Budgets exist. Efficient allocation of budgets is important. You shouldn't just spend money wastefully for dumb ideas even if they're well intentioned.
Little_Big_Burglar | 18 hours ago
We spend money on roads and make no money on them. Many goods/services are provided at a loss because we pay taxes for them.
It's pretty simple to understand. If you don't live in NYC you won't understand why they're doing this, I guess.
Mr_Axelg | 18 hours ago
roads are objectively useful to society. They can generate many times their cost in other ways. Publicly subsidized food stores that will likely also take out a bunch of normal privately run grocery stores, or at least hurt them, seems like an enormous waste of money with zero benefit.
throwaway880729 | 18 hours ago
You miss my point completely. You're saying because its good for government to spend money on roads, they should build it in the most inefficient, costly way possible.
Please explain why you think the government would be effective at running a grocery business? Give money directly to the poor. Give extra assistance to existing food assistance infrastructure and programs. Give private grocery stores an incentive to open and run locations in target areas. These would all be FAR better solutions than having the government run a grocery store that its going to suck at doing and run for much higher operating expenses than a regular grocery store... The only explanation for such a dumb plan is optics.
SueNYC1966 | 4 hours ago
Screw that..I am driving up in the SUV and sending in all my kids to clean out the meat section once a day..lol.
LittleMsSavoirFaire | a day ago
Food pantries in my area are grocery style, but we're something of a breadbasket. Some are needs-gated, some aren't.
I don't shop food banks but I do go to Aldi when they open first thing Saturday morning and scoop 10-20lb of 50% off beef. Aldi is getting my trade because they're a very efficient store and they pass those savings on. That's why I don't shop at Target or Walmart or Food Lion.
Now maybe they don't notice my loss of trade but if the catchment area in a food desert draws enough people out of the other (presumably barely marginal) stores on the perimeter of the food desert, do they also earn a subsidy once they're no longer profitable? Do they get tax cuts, perhaps free rent?
WillowgirlIII | 19 hours ago
When they go out of business, the owner can apply for a job at the city-run store, I guess.
SueNYC1966 | 4 hours ago
Since they are going to be at Hunt’s Point at least the vegetables will probably be nicer.
MIT_Engineer | 2 hours ago
Yeah, city's just eating the difference. Per the article, the stores are going to be subsidized.
derpasuarusx | 23 hours ago
Markets need to be distorted, unfettered capitalism got us where we are now.
majesticstraits | 17 hours ago
Where we are now - the richest society in the history of the world?
Mr1ntexxx | 16 hours ago
Being the richest society in the history of the world means nothing when there are people starving to death on the corner of a 10,000 square foot office funded by the launch of the 93rd Chat GPT wrapper this year that does absolutely nothing of use.
Joltizer | 18 hours ago
Please keep your uneducated opinions in the less intelligent subs like politics
Elestra_ | 17 hours ago
Unfortunately this subreddit fell a long time ago.
EconomistWithaD | a day ago
We're about to get a massive social experiment in a metro area that is comparable in size and GDP to many countries (Brazil, Canada, Italy, ...). Rent control, socialized grocery stores, etc. Much like COVID, this is going to be research for years to come for economists everywhere.
The fact that his EDC finds consumer savings of about $90 per month from this suggests that the margin with which this would be considered a net success is going to be narrow. Public grocery stores in food deserts have struggled (Why Opening Grocery Stores Alone Doesn’t Solve Food Deserts — ProPublica), and I know people bring up military commissaries, but there are issues there as well.
BlazinAzn38 | a day ago
Grocery store margins are already tiny on fresh foods so it’s not super shocking that savings are that small, there’s just not much you can reasonably cut without just running at a loss
EconomistWithaD | a day ago
The spoilage issue will be interesting.
BlazinAzn38 | a day ago
Yeah I imagine they’ll have to just run a barebones assortment so there’s not enough assortment to risk things going bad at a scale that causes problems.
gimpwiz | 22 hours ago
One of my biggest shocks coming to the US as a wee lad was the first time we went to a supermarket. Going from "this store has five things in it for sale, including exactly one kind of cheese -- do you want it or not?" like I remember from being very young, to "this store has, like, eighty different kinds of cheese... the more popular ones we sell in like eight variants and each variant might come in two to five different packaging/preparation styles" was fucking crazy.
But I mean yeah, yknow, this is a really interesting question to address the food desert problem.
Do you go for full practicality and stock the two most popular kinds of cheese because frankly that's all anyone actually needs? And repeat that for every other product. In other words, do you basically just set up a bodega or corner store that instead of being filled mostly with junk food just has a decent assortment of affordable necessities?
Or, do you find that to be somehow too humiliating, and that in order to not make people in a food desert feel like they're less-than, you open a larger scale grocery store with a large selection of items and then have to bear the cost of all that inventory management and spoilage?
Similarly, is this going to be a self-serve model or is it going to be acknowledged that one huge reason for food deserts is high theft and vandalism rate, and put everything behind the counter, like all stores used to be, a hundred-odd years ago? Are we going for practicality or are we going to eat loss in order to have people not feel like it's a loss of dignity?
On a related note, if the latter, are they going to have a cop posted there to address the theft issue? Are they going to budget for that using the store's budget or are they going to hide it?
I'm also really curious how they'll handle the junk food problem. Does a government subsidized store in a food desert need to stock a good selection of junk food? Are we endorsing selling the same exact food that helps people have all manner of health problems, and costs way the hell more than raw basics and thus contributes to poverty as well?
EconomistWithaD | a day ago
Will be interesting to see how consumers respond to considerable reductions in product type; probably one (or two) types of apples and grapes, limited availability of what type of beef (93/7, 90/10, ...), and so on.
Also interesting that they are basically doing "full price" on sodas, which is what SNAP rules in certain states are trying to do (with considerable pushback because how dare we limit choice).
BlazinAzn38 | a day ago
I think the total lack of private label will also be an interesting experiment. That’s where most of your grocery savings can come from but the City of New York probably isnt going to go through the trouble of doing RFPs across cheese suppliers and yogurt suppliers and salad mix suppliers, etc. taste tasting, formula management, etc. for a couple stores. As you said lots of interesting things to learn from this in a city that has a scale that makes the findings relevant.
[OP] IvoryTowerResident | 23 hours ago
also need to limit corruption, who is to say we carry brand A and not brand B
Wellontheotherhand1 | a day ago
The success of this project is definitely going to be assisted by the fact that there is a widespread perception that grocery prices are out of control, even if that's not always reflected in the data
For the type of shopper who is very attracted to this, I'm not sure it's going to be an issue for them to only have one or two different types of apples instead of 15. It's hard to calculate how much value that having a massive selection of similar undifferentiated commodities really makes
fa1afel | 13 hours ago
Realistically, carry Honeycrisp or Fuji apples and ignore the rest right?
MareNamedBoogie | 6 hours ago
You need to make sure Granny Smiths are in there for those who like to bake.
optimis344 | a day ago
I think the success of Aldi and similar places have shown that "good enough" works if the prices are low.
EconomistWithaD | a day ago
It could; the fact that they are choosing a public option, rather than working with low budget food retailers, certainly says something, however.
Check_Me_Out-Boss | 11 hours ago
Hilariously going back to what USSR grocery stores looked like.
-worryaboutyourself- | a day ago
It works be no different from going to Aldi for groceries.
BlazinAzn38 | a day ago
Except Aldi is ALL private label essentially. This store will likely be none of that
pkennedy | 22 hours ago
Lots of places do that already, Costco is a good example of a limited selection of products. People don't seem to mind. Basically name brand, or white label for most products they offer. As long as the name brand is well known and decent.
I think they'll need the name brands regardless, to avoid creating some stereotype for the type of shopper going there. By using brand names, no one really knows who is there and you're getting the same food as store X.
The real issue is lobbying and large super markets targeting and trying to destroy this project before it has had time to be tested. Anything negative they can find to push via the media, they will. With enough negative media, even the most liberal will call it a failure. But if it's not losing money, helping food banks, selling brand names.. it's going to be hard to find a good negative angle, other than anti-capitalism.
CauliflowerDaffodil | 21 hours ago
>Lots of places do that already, Costco is a good example of a limited selection of products. People don't seem to mind. Basically name brand, or white label for most products they offer. As long as the name brand is well known and decent.
I can't believe you're seriously equating Costco shoppers to government discount store shoppers. Totally different income levels, demographics, locations, and use-cases. No one shops at Costco for their daily groceries; you get good deals on good products in bulk to stock up your pantry and chest freezers where the typical spend is anywhere from $250-$500 per trip depending on how often you go.
People shopping at government discount stores aren't looking for a 12-pack of Kirkland pasta sauce to last them a few months. They want small affordable jars enough for tonight's dinner and in different varieties so they don't end up eating the same foods over and over like a pet.
EconomistWithaD | 22 hours ago
The median shopper for Costco is not the median shopper at these places.
As I said, probably not going to work out well, but that's what evidence will be used for.
pkennedy | 23 hours ago
City project, guessing city will use food banks to keep that limited.
Super_Mario_Luigi | a day ago
The fraud, waste, abd abuse as a whole will be interesting
JRoc1X | a day ago
The theft will be legendary as I don't think Mayer will allow the staff and police to do anything about it.
OrangeJr36 | a day ago
The biggest problem, as the linked article mentions, is facilities. The military charges an extra 5% just to maintain facilities, if you try to eliminate that to pass on savings you can end up crippling your store for days when systems fail due to lack of money for maintenance.
aznology | 22 hours ago
That's the thing tho, y'all thinking he needs to breakeven / make money. He has the entire NYC tax base as a piggy bank.
Basically ur tax money will make up the hole for a food desert grocery store.
I can already tell you how it's gonna go. Either the store gonna get robbed and looted and now we know why all the grocery stores left because of a certain population. Or the costs of running this shit is gonna balloon so high we gonna be like WTF
Suspicious_Chart5817 | 21 hours ago
To your point about costs, people don't ever seem to lookup how much commissaries actually cost. It's all a public record. Last year DeCA (Defensive Commissary Agency) got $1.57 billion from Congress and total annual sales were under $4.9 billion.
The Commissary's 5% surcharge and pricing is for show. It's a simple wealth transfer because military-industrial goes brrr.
Incidentally, commissaries can (and do) employ child labor and pay some people 0.00. They're exempt from a bunch of basic labor rules. They don't pay any taxes. A lot of their logistics are paid for by hitching to the Army and Air Force.
The amount of people (but thankfully not Mamdani) repeating 'this is like Commissaries' is really worrying. If these things are going to be like commissaries they're going to close in a year.
Hautamaki | 19 hours ago
Or they're going to be ridiculously subsidized, guess at that point it's just a question of whether the tax payer wants to subsidize cheaper groceries indefinitely
VanCityPhotoNewbie | 19 hours ago
I live in Canada and Walmart is always more expensive than local grocers except for certain items like Banana's and Avocados. When I researched it, it is because Walmart doesn't find more local sources but rather large distributors.
Now the difference is Walmart will always have the same fruits and vegetables where the local grocers will have alternating produce.
ThinVast | a day ago
NYC has had rent stabilization/control policies for decades. The effects of it are really clear. There is nothing novel about a rent freeze under mamdani's term.
EconomistWithaD | a day ago
Except for the additions to rent stabilization this time around (2 year leases), we know that rent control is effective in reducing rents, but has a whole host of negative unintended consequences, and is usually considered by Economists to be poor policy, relative to supply-side measures.
Plus, Mamdani has frozen rents at 0%. Which hasn't been seen since 2020 (and even then, a 2 year lease allowed for a 1% rent hike in the second year).
DarkExecutor | 9 hours ago
Rent control had never reduced rents. The only thing that I'm aware of that actually reduces rent is building more homes.
EconomistWithaD | 7 hours ago
Partially incorrect. It reduces the rents of controlled units.
https://www.sciencedirect.com/science/article/pii/S1051137724000020
DarkExecutor | 6 hours ago
It only slows the growth of rent, how does rent control reduce the rent? Unless by reduce you mean it will keep it under the average.
EconomistWithaD | 6 hours ago
Relative to the counterfactual of no rent control (since these analyses are all natural experiments, largely using DiD methods, the counterfactual is applicable).
Edit: but you're right, the only way to UNCONDITIONALLY lower rents is build more housing.
dnyank1 | 21 hours ago
> and is usually considered by Economists to be poor policy, relative to supply-side measures.
Yeah, I'm sure John Maynard Keynes would have hated rent control.
Outside of existing entirely within the CSE bubble, I don't know how you can say such a slanted bit of drivel with a straight face. You're joking, right?
EconomistWithaD | 21 hours ago
Please. Provide peer reviewed evidence that rent control is superior to increasing housing supply.
From my fellow economists.
dnyank1 | 21 hours ago
No, you! You’re the one making the outrageous claims, not me.
And as an aside - “Usually considered” is the kind of weasel word poor form that gets you tossed from debate club and Wikipedia alike. Everybody knows - Nobody likes it. See?
EconomistWithaD | 21 hours ago
Economists pretty much universally think of rent control as poor policy. https://www.sciencedirect.com/science/article/pii/S1051137724000020
https://www.brookings.edu/articles/what-does-economic-evidence-tell-us-about-the-effects-of-rent-control/
https://fraser.stlouisfed.org/files/docs/publications/frbsl_ote/frbstl_ote_20240212.pdf
So, what evidence do you have that our discipline is wrong?
Also, I don’t really give a fuck what you think of my choice of language.
dnyank1 | 20 hours ago
Let's go point by point to unclog the shit, shall we?
You're just wrong. There's two layers to why you're wrong. How you phrase it, implies universality, that's "wrong" as in "fucked up to do" but also... the implied understanding. That's just incorrect.
Supply side, conservative-leaning Economists don't like rent control. Keynesians do
Source - a signed letter (which itself cited plenty of sources) from 30+ senior economists to the previous administration
https://peoplesaction.org/wp-content/uploads/Economist-Sign-on-Letter_-FHFA-RFI-Response-1.pdf
See part 1. You can't claim to speak for "our discipline" while being so confidently and maliciously incorrect. Seriously. GFY.
Gee, pal. Thanks. I see the misunderstandings continue. I couldn't give a flying fuck less what words you choose to use, I DO care greatly what you do with them. And as of now, you're lying.
Joltizer | 18 hours ago
He is correct. We universally think of rent control as a bad policy, because it is one
https://kentclarkcenter.org/surveys/rent-control/
> Supply side, conservative-leaning Economists don't like rent control. Keynesians do
Supply side and Keynesian economist are not things in modern economics
dnyank1 | 17 hours ago
> Supply side and Keynesian economist are not things in modern economics
Sure, Jan.
Robokitten | 18 hours ago
A vast majority of Economists do not have a positive view of rent control. Two surveys in the last 40 years have shown consistent low super for rent control amongst economist. Like 3 percent support rent control.
https://kentclarkcenter.org/surveys/rent-control/
dnyank1 | 17 hours ago
no astroturfing here, oh no
WindHero | a day ago
Also, the negative effects of killing investment through higher taxes and anti-market reforms will take decades to unfold. Rent control might make you feel good about your rent not going up the next year but ten years later after no new builds and lack of maintenance it might be making you miserable.
Wellontheotherhand1 | a day ago
As opposed to the lack of rent control making you miserable immediately?
I find that most people who are against rent control have never had a landlord jack their rates up to the point of unaffordability and been forced to leave a place. It's not a fun experience and no amount of dry discussion of how this is what's best for the market will make anyone feel better in that moment
FunctionOk8962 | 23 hours ago
Fair, but the landlords are just going to make up the profits in other areas and this is being overlooked. Parking that was once free now you have to pay to compensate for the losses in rent, or the laundry that was free access now you have to subscribe for a card to access or pay per load, the gym or pool that was open access now a subscription for the tenants to participate or just hike if it already was being charged. This is just going to trickle into other parts of the property that they can manage and create new frustrations that can't be as easily blocked.
Wellontheotherhand1 | 23 hours ago
I think when the alternative is 'you have no place to live,' access to a gym or pool is pretty low on the frickin list of concerns, wouldn't you agree?
Rent control and rent stabilization almost always apply to older buildings; these places don't have laundry, pools, or a gym. And most don't have parking either, haha
FunctionOk8962 | 16 hours ago
What I'm saying is from perspective you don't understand how green they can make these hikes if they do band together and decide for a certain set of people, what are you going to do not park your car in front of your house? They can make these candles so green and name their price because of this and those with access to heat even in apartment buildings when they short the heat and blame it on whatever draws gigawatts of energy so they save money there. No disrespect but they can save in so many places and hike in so many other places to make up for what was lost on this.
Wellontheotherhand1 | 2 hours ago
If landlords can make up the difference in so many other areas, why do they complain about rent control at all?
optimis344 | a day ago
Also the whole "when they dont get money, they wont fix things" as if things get fixed when they charge more.
RockDoveEnthusiast | a day ago
"anti-market reforms". way to hold yourself to a high standard of intellectual honesty there, buddy.
"I know I'm right because I've labeled my ideas as good and the other people's ideas as bad. And good is obviously better than bad."
EconomistWithaD | a day ago
Rent control, in economics, is pretty much uniformly labeled as bad policy.
Kelsig | 22 hours ago
What reform did he do on rent control
EconomistWithaD | 22 hours ago
2 year leases, for first time ever, will have 0% rent hikes.
Kelsig | 22 hours ago
Yes, this year for rent stabilized units, sure. That's not a reform lol.
EconomistWithaD | 22 hours ago
In economics, reform is making changes to a system (or a practice), in order to improve it. This is reform.
May not be major, but in no other year (since 2003) has the one year lease rate had the same rent change as the two year lease rate.
Suspicious_Place1270 | 23 hours ago
economists like to say that simply building more will do the deed of lowering prices, which is such a short sighted view on spots and places where land is simply not infinite
EconomistWithaD | 23 hours ago
Yes, because it’s a better strategy than rent control.
That’s what happens when we understand economics.
DeathMetal007 | 22 hours ago
Just build bigger apartment buildings. It’s not infinite, but you have to build to keep up with growth and demand. You can’t just constrain supply and then say everything is getting expensive and we are out of ideas other than constraining supply.
Rent control constrains supply.
Prestigious_Can_6359 | 22 hours ago
Because it is a better policy. It's a classic case of supply & demand.
WindHero | a day ago
Post above talked about rent control and city run grocery store. How are those policies not anti market?
KingFebirtha | a day ago
They aren't anti market. There's still a housing/rental market, just with regulations like rent control. City run grocery stores are still competing within the market, are they not?
It's crazy that anything other than complete and utter laissez faire (which just leads to monopolies and anti-consumer behavior) is considered "anti-market".
Your head would explode if you read about how postwar governments managed their economies.
WindHero | a day ago
Your head would explode if you could visualize all policies on a spectrum of pro market and anti market policies, and see the obvious fact that rent control is more anti market than not having rent control.
Frequently_lucky | 5 hours ago
rent control has been experimented with again and again. It can be used as a short term emergency solution but it creates problems on the long term. The only thing that works is increasing supply, which mamdani is also working on.
EconomistWithaD | 5 hours ago
Yes, I'm well aware that rent control has a substantial literature, much like the minimum wage (so much so they have survey articles).
This is a synthesis (up until 2024) of all of rent control.
Rent control effects through the lens of empirical research: An almost complete review of the literature - ScienceDirect
It's (any new rules/regulations/laws put into place by Mamdani) still going to spur research, given the "ceteris paribus" assumption.
Incragable-Crunk | a day ago
They've had rent control for over 50 years.
jeffwulf | 23 hours ago
Yeah, it's a big contributor to why rental prices are bonkers in the city.
EconomistWithaD | a day ago
Yes; more doesn't make it better.
Incragable-Crunk | a day ago
He didn't add more rent control, it's still the same rules as before.
EconomistWithaD | a day ago
Uh. A 2 year lease rent freeze isn't new?
Incragable-Crunk | a day ago
It's not the first time it's happened so no it's not new
EconomistWithaD | a day ago
Got any proof for that?
Because everything I'm reading says that a 2 year lease rent freeze is the first time it's been adopted in history.
NYC Rent Guidelines Board approves 2-year rent freeze, fulfilling Mamdani campaign pledge - Gothamist
Incragable-Crunk | a day ago
I guess it is the first time they've frozen on 2 year leases. 2015, 2016 and 2020 they only froze on 1 year leases. My bad
EconomistWithaD | a day ago
2024 and 2025 saw substantial additions to rent stabilized housing stock.
Time for a reversal of the recent trends due to this.
2026-Changes.pdf
Joltizer | 18 hours ago
This isn't a social experiment. This is repeating a policy we know doesn't work because the mayor needs his vanity project
EconomistWithaD | 18 hours ago
As I said, this will be considered an experiment in Economics that will be analyzed using the considerable amount of micro data coming from a metro area that’s a country.
Joltizer | 18 hours ago
As I said, this will not be considered an experiment as this has already been done and failed every time
EconomistWithaD | 17 hours ago
I don’t think you understand the econometric implications of this.
How do you think we come to our conclusions? Data. With some form of causal setup.
As this is.
Yet again, I am telling you this is an experiment. The discipline will utilize this as an experiment. You’re simply incorrect if you don’t think economists will leverage a very visible policy.
Joltizer | 17 hours ago
You seem to be reading what you want, instead of what I wrote
We will not be treating this as an experiment. When it fails, we will analyze the data to create even more evidence (that will be ignored) that this is a terrible idea. But we will not treat it as an experiment, because we already know how this goes
EconomistWithaD | 17 hours ago
lol. You think there will be no research done on this?
You’re smoking crack.
Here’s a hint: you can run an experiment even if you have strong beliefs about the outcomes. Economists do it often. You know, since our results are ceteris paribus
Joltizer | 17 hours ago
You are again reading what you want and triggering yourself
EconomistWithaD | 17 hours ago
Crackhead.
Joltizer | 16 hours ago
No I didn't go to Amherst. That's probably you since you think a public grocery store being attempted is a new and novel thing
Ecstatic_Dinner_992 | 7 hours ago
We already have socialized grocery stores that are discounted in the US. They're just on military bases. There are hundreds if not thousands of these kinds of stores.
EconomistWithaD | 7 hours ago
If only I had said that in my last sentence….
Super_Mario_Luigi | a day ago
By the time we get the truth on how much money this wasted, the goalposts will be moved outside of the stadium. Then we'll have a new surefire way to install price controls
EconomistWithaD | a day ago
Certainly less waste than tariffs.
EPSTEIN-blue-white | a day ago
At least he has ideas and is trying things...
EconomistWithaD | a day ago
"Trying things" is not an unconditional welfare improving policy choice.
Regardless, we already know the impacts of rent control. Yes, it lowers rents for controlled apartments, but leads to a whole host of negative side effects (higher rents for uncontrolled units, higher housing prices, lower quality, more eviction attempts, ...).
For instance, we know that "although rent control appears to be very effective in achieving lower rents for families in controlled units, its primary goal, it also results in a number of undesired effects, including, among others, higher rents for uncontrolled units, lower mobility and reduced residential construction. These unintended effects counteract the desired effect, thus, diminishing the net benefit of rent control. Therefore, the overall impact of rent control policy on the welfare of society is not clear."
Rent control effects through the lens of empirical research: An almost complete review of the literature - ScienceDirect
di11deux | a day ago
Rent control is one of the few policies where it almost universally has the opposite effect from its own stated purpose. Even "well-designed" rent control with benchmarks to inflation / property mortgages introduce all sorts of perverse incentives that end up reducing stock and coagulating the market.
People never leave rent controlled units. You just create hereditary beneficiaries of a policy while anyone new to the area is forced to pay for the astronomical rates for non-controlled units.
THedman07 | a day ago
I mean,... part of the point of rent control is to allow people to have a long term home that they don't eventually get priced out of. It isn't a negative that they're able to live there permanently. You can say it like it is a negative, but it isn't.
Why should people be forced to leave the place where they live by market forces?
thewimsey | a day ago
> ou can say it like it is a negative, but it isn't.
It's a negative because it happens at the expense of other renters.
di11deux | a day ago
It's a ladder-pull. When you implement rent control, inventory in the controlled area almost universally declines. For those living in controlled units, it's most economical for them to stay where they are. You identify this as a good thing, and generally it is - we want people to have permanent shelter. The problem is the benefits of this policy are unevenly distributed. The beneficiaries of rent control are those residing in those controlled units at the time of the legislation going into effect. If you're entering the market looking for housing, what you often find is that there's almost no rent controlled units available, and all that's open to you are the high-tier luxury units that you can't afford.
It ends up putting upward pressure on prices, since the only units that have the float necessary to accommodate new residents are expensive/luxury. Rents rise, people who can afford them move in, neighborhoods gentrify, and the cycle repeats.
It also means that those living in controlled units often have more space than they need, which matters for big cities. An empty-nester couple would likely find their 4BR apartment is cheaper than moving to a 2BR, so they stay - meaning families moving into the city have even fewer options and need to look at possibly stuffing themselves into smaller units.
If long-term, affordable shelter is the goal - and it should be - rent control is not the way to achieve that.
Wellontheotherhand1 | a day ago
The benefits of practically all policies are unevenly distributed, it's always an argument over who they should be unevenly distributed towards
> If you're entering the market looking for housing, what you often find is that there's almost no rent controlled units available, and all that's open to you are the high-tier luxury units that you can't afford.
This wasn't my real world experience. Nor the real world experience of pretty much anyone I knew who lived in a remote control apartment. I'm sure that the literature will show this is the case in general, but it's not the case in specific
> An empty-nester couple would likely find their 4BR apartment is cheaper than moving to a 2BR, so they stay - meaning families moving into the city have even fewer options and need to look at possibly stuffing themselves into smaller units.
Four bedroom apartments? Talk about a unicorn, these exist almost nowhere in reality. Hell, even three bedroom apartments are rare
BuvantduPotatoSpirit | a day ago
Why should generally older, wealthier people get their housing subsidised by generally younger, poorer people?
Silver-Literature-29 | a day ago
I believe it was Denmark that had an interesting solution to this issue. It basically limited the maximum rent allowed based off the declared property value of the residence. Essentially, if you wanted to charge more rent, you had to pay higher taxes. If you wanted to lower your property tax bill (because you wanted to sit on an empty property) and declared your property value low enough, then whatever you declared could legally be bought by the government if they thought it was undervalued.
It was an interesting system that seemed to align the incentive structure for affordable rents and capping gains from land appriciation without actually improving the land value itself.
EconomistWithaD | a day ago
It's novel, I'll give them that.
Declared value likely won't be a U.S. thing, however, as cities/counties/states rely on property taxes.
Silver-Literature-29 | 23 hours ago
Well, that is the incentive. Basically, the asset owner has a disencentive to not undervalue their property value if the government is a willing buyer at that price who could turn around and resell it with a profit and at the market property tax rate.
In some us markets, this is sort done already with contesting property values in order to lower it and pay less taxes. However, there is no disencentive to discourage frivolous claims (aka, recent property sales reflect higher values than what ypu are saying). This fixes that.
EconomistWithaD | 23 hours ago
Except property taxes are 3.8-4% of total tax revenues in Denmark (combined with wealth). It’s triple that in the US, with ~70% of local revenues coming from it.
It’s not comparable.
Silver-Literature-29 | 22 hours ago
Any reason why property tax rates / evaluations can't be adjusted to a higher revenue? I am not seeing how that will be an issue considering property tax rates already fluctuate that much between city and states.
EconomistWithaD | 22 hours ago
Because self-assessment traditionally leads to revenues that are under expectations.
Silver-Literature-29 | 22 hours ago
Wouldn't you adjust the property tax rate at that point? At some point there is an equalization of revenue needs and asset values. We already do this when revenues don't match up with tax increases anyways or when it is too much with things like homestead exemptions.
And again, if someone wants to declare their property is valued at a bargain, then there is nothing to stop the government from buying it.
Astral_Peppers | a day ago
You said we already know the impacts of rent control but then cited a study and quoted it "therefore, the overall impact of rent control policy on the welfare of society is not clear"
EconomistWithaD | a day ago
Yes?
Knowing the impacts means that we know what the behavioral responses will be. Reduced mobility from controlled units, for one.
What we don't know is whether the benefits of this policy outweigh the costs. Which is what the quote is saying.
THedman07 | a day ago
So what are your solutions?
There is literally no policy intervention in the world that has absolutely no negative effects and the free market doesn't work either... So what's the answer?
EconomistWithaD | a day ago
Alleviate regulatory burdens for multi-family housing (CEQA in California, for one). Expedited review to rezone.
Basically, policies that promote housing supply are almost uniformly superior to rent control.
Eric848448 | a day ago
FUCKING BUILD
N7day | a day ago
How is artificially lowering the price of a staple good an answer? The total cost is still the same (just paid for by tax dollars).
And it has the potential to destroy local existing businesses who couldn't ever compete on a tax subsidized price.
Butane9000 | a day ago
The problem is a lot of the ideas have been tried and consistently fail and achieve lack luster results do to only addressing part of the problem.
GerryManDarling | a day ago
There are more boring policies like easier permit for multi-family housing and better rezoning which will increase housing supply, or government built housing in large scale like Singapore. But those take long time of planning, slow to see results and won't get anyone erected.
MareNamedBoogie | 6 hours ago
NYC is already a mixed-zoning area - meaning housing and shops are right on top of each other. It already has high-rises for both office buildings and apartment buildings. They do not need easier permits for multi-family buildings. Government built buildings are notorious across the board for being poor builds due to the tendency to have contracts to the lowest bidder. What NYC needs is a policy/ rules system that encourages conversion of office spaces to living spaces, because it's at the point where that's the only way to get MORE housing into the downtown areas where the majority of their housing issues reside.
thewimsey | a day ago
I mean, so does Trump...
flappysack- | a day ago
Trying things to fix the problem with zoning and regulation driving up the cost or living, as if grocery stores margins are high due to anything but land value.
optimis344 | a day ago
But if that works, it will help a lot of people.
Yeah, 90 bucks isn't a lot. But if you ask a family what they could do with an extra 1000 dollars, im sure they can figure out a lot of ways to stretch that.
EconomistWithaD | a day ago
$90 isn't a lot, and there are downsides that will impose costs on small businesses and city budgets, which means that there is a narrow opening to be a net positive.
It's unlikely, but we will see.
Petrichordates | 7 hours ago
Did economists need more research on rent control to know the effects?
EconomistWithaD | 7 hours ago
Why is more evidence when causality is not assured bad?
artfellig | a day ago
Gift link to article:
https://www.nytimes.com/2026/07/27/nyregion/mamdani-grocery-stores-discount.html?unlocked_article_code=1.01A.Zzfo._MIhRhK4dDCY&smid=url-share
DL505 | a day ago
Hilarious.
For a proper business case they would also have to include the loss of tax revenue from non government stores closing, laying off employees etc
No chance industry can compete with a government subsidized model.
aznology | 22 hours ago
Yuppp, first it was the landlords y'all cheered. Now it's Jose from the deli and now y'all seeing the big picture??
ants_are_everywhere | 22 hours ago
Isn't that the point? Socialists are always going on about how the middle class causes everyone's problems.
derpasuarusx | 21 hours ago
No usually socialists want to get rid of the parasites at the top, hence the prefix social, as in for the community as a whole.
ants_are_everywhere | 20 hours ago
Much of it is directed at the middle class -- the bourgeoisie.
> hence the prefix social
Hmm I'll keep that in mind next time I attend a social gathering or socialize with friends or attend an ice cream social or a social mixer or meet a social butterfly or really anyone in my social circle, especially if they have social anxiety, but if we're practicing social distancing it may be best to reach out through social media.
derpasuarusx | 19 hours ago
All I can say is no, because that isn't what socialists do to my knowlege, feel free to educate me if you have some examples or something but you seem very tilted at this, did a socialist take your sweet roll or something.
ants_are_everywhere | 19 hours ago
My main beef with them is they helped Trump rise to power, they helped the Nazis rise to power in the 30s, they committed endless numbers of mass civilian killings, they spent a long time advocating for eugenics, and they take over every online discussion about US politics to tell people that voting is useless and they should just give up on democracy.
But historically it was a movement against the middle class, and especially against people and races associated with commerce.
It's also a bit like any other cult. They pretend to be nice and to care only about nice and good things as a matter of outreach. but the deeper you get in the social network the darker it becomes. There are many cases of them preying on people who are isolated and lonely and totally ruin their lives, to the point where the people end up in prison or killed for no benefit to anyone.
derpasuarusx | 17 hours ago
Ah I see the problem you have no idea what socialism is and just think socialism = when bad.
ants_are_everywhere | 16 hours ago
You have no idea what socialism is. You already admitted it, so everyone reading this conversation knows it.
Also I've noticed you've gone straight to ad hominems after asking me for examples and I replied to you.
But then again socialists don't have a great history of operating in good faith do they? Even back in the 1840s Marx was writing as if it was common knowledge that socialists routinely lie about their beliefs and goals to trick others into joining them.
SinghamSlop | 15 hours ago
All one has to do is touch grass and talk to an individual that escaped from socialism/communism because they are two sides of the same coin and individuals that espouse it can suffer the absolute worst.
derpasuarusx | 21 hours ago
Government grocery stores will hire employees too. And government often subsidizes the pay of cheapskates like Walmart with food stamps anyways may as well cut out the leech middlemen of the waltons when trying to feed people
Sad_March_8196 | 22 hours ago
How is this sustainable on even a slightly longer term?
Government stores will heavily outprice any grocery store in reasonable distances.
Grocers can no longer compete on products sold at government stores and will stop carrying them.
Grocers will ultimately go out of business because margins are already significantly below those 30% so there is no way to meet government prices.
So business tax is lost, jobs disappear. Government stores remain.
To sell at such low prices, this whole system ends up being endless subsidies for food producers.
At the same time, those stores are a massive tax money sink that can not be sustainable long term.
Government stores ultimately have to be closed or privatized.
With former private grocery stores gone, you’ll end up with new local monopolies on food.
FaultRoutine3520 | 20 hours ago
I think you forgot that it’s a pilot program…..
TheMauveHand | 16 hours ago
A pilot program for a screen door on a submarine
FaultRoutine3520 | 16 hours ago
I guess you have all the answers.
Alive_Chef_3057 | 23 hours ago
Is this model going to help the working middle class in NYC that do not qualify for assistance. Or is it going to give the SNAP recipients 30% cheaper options using funds already supplied to them by the federal government? It seems like this system will eat itself alive fairly quickly.
LaLaLaDooo | 23 hours ago
Really? Government run grocery stores have a long track record of success... in wishful lore.
Alive_Chef_3057 | 22 hours ago
I don’t know anything about the subject. It was a genuine question of curiosity without malice.
CauliflowerDaffodil | 21 hours ago
It's their way of saying your question is akin to asking if Santa Claus is real. You may not know much about Santa Claus but you should know enough to not have to ask that question.
Alive_Chef_3057 | 20 hours ago
I was a bit confused. I can’t wrap my head around the mayors way of thinking. I live in Alabama where we have around 3% state grocery tax, in addition to city/county tax. Total around 5% for our groceries. New York does not have a grocery tax which I agree is a positive. The mayor announcing that they can sell groceries at 30% less than others, fresh produce being in that category, is he going to negotiate paying 30% less to farmers to pass on the savings to residents that already get federal subsidies? How is that going to be possible? The math just isn’t mathin’ to me. How many people in a city of that size is this really going to benefit? It is cutting off your nose to spite your face.
CauliflowerDaffodil | 18 hours ago
I can't understand it either but in any case you'll have the skeptics who believe in market forces and the believers who think it will work differently for them.
In any case, the result will be either Mamdani found a way to overturn the same fundamental business model that supermarkets and the supply-chain industry around the world has been based on for nearly a century or, proponents will come up with more excuses as to why it didn't work THIS time and how it will work the next.
SueNYC1966 | 4 hours ago
They have tried it several times - huge taxpayer waste (not the main issue) but the five finger discount was the biggest issue. I am going to assume the city will have trouble paying vendors on time. I know when we sued for ours don’s education they were 100K behind on one point and my lawyer had to file suit to get payment after they had already settled. The city loves to wait until the last minute to pay bills - at least for special ed families.
Prestigious_Load1699 | 10 hours ago
It will put all non-government grocers out of business, and lead to food shortages.
This isn’t a novel idea.
Gdude823 | a day ago
I really can’t imagine this ends up being a net positive. I’m not a New Yorker so I don’t really have a dog in this fight, but this seems like a horrible policy that could have highly damaging effects on competing businesses
FaultRoutine3520 | 20 hours ago
How is a pilot program a horrible policy?
Gdude823 | 20 hours ago
Even in a trial capacity, it’s still an economic disrupter that will broadly hurt small business/stores with less capacity to absorb shocks than the big guys
vbsteez | 13 hours ago
One grocery store in each borough is not going to disrupt the grocery economy in NYC.
koala37 | 9 hours ago
ah so it will just disrupt the smallest and most vulnerable local establishments then, gotcha
vbsteez | 9 hours ago
What evidence do you have of this? Has Atlanta's public/private grocery store hurt SMBs?
Grocery stores are one of the most centralized corporations in the country, which small and vulnerable local establishments are you worried about?
Gdude823 | 6 hours ago
I’ve been reading into it and there is honestly is not a ton of evidence it’s done damage, and has actually increased foot traffic in the area.
There are caveats, of course. NYCs Bodegas are a bit different than other corner stores, the financing is much more continuous for the NYC program and the larger discount can change the dynamics. It also should be mentioned that public transit is much much better in NYC so that may make this a more appealing option to non-local shoppers. I still don’t like it, but if the Atlanta store is the benchmark it might work
aznology | 22 hours ago
Yuppp, first it was the landlords y'all cheered. Now it's Jose from the deli and now y'all seeing the big picture??
thejontorrweno | 21 hours ago
Why are you commenting the exact same thing on multiple different replies
GhostofBeowulf | a day ago
Why are they not just... making co-op grocery stores?
Have to be a member to shop there, you get reduced prices and incentives/coupons later on.
SuchDogeHodler | a day ago
Lol..... my local co-op grocery is way more expensive than our other local grocery stores.
(Everything is organic, certified, and unprocessed.)
GhostofBeowulf | 20 hours ago
And my local co-op is more expensive on specific things that other stores usually sell as loss leaders, but about 10-20% cheaper on everything else. As well as a 20% discount for members. Non members have to pay more, but it's a set amount for a person per month and a family per month or they offer yearly passes at a discount.
This is why we don't use anecdote to prove rules, but rather just direct research.
aznology | 22 hours ago
Ngl I can't afford that but I had some these organic eggs damnnnn them rich ppl eating good good. I can actually taste the egg.
koala37 | 9 hours ago
the difference in color between store bought yolks and farm fresh yolks is pretty wild. the yolks have such a deep rich orange color. sometimes they almost look red
Striper_Cape | a day ago
Contracting it out to a company, even a co-op, is why we pay trillions for healthcare.
GhostofBeowulf | 20 hours ago
...Who said anything about contracting it out?
And what exactly does running a co-op in New York City have to do with the nation's state of healthcare?
Striper_Cape | 17 hours ago
If it isn't the government doing it directly, it's being outsourced.
Prestigious_Load1699 | 10 hours ago
Or it’s just the free market operating with sufficient profitability to ensure there is enough food to go around…
chronoit | a day ago
I think the hardest thing for people to get over is the idea that everything is designed to make profit. The goal for these stores should and likely is to break even.
I look at this kind of like how I see the Costco whole chicken or the food court. Both those things are loss leaders that costco doesn't make a dime on but help to get people into the store overall and then they make money on everything else despite other products that are sold similarly at other stores being under competitors pricing (keurig's for example).
The real difficulty is going to be finding the right balance of products to hit this goal and is I think the primary challenge from a financial standpoint.
PSUVB | 23 hours ago
The moment you decide the gov isn’t in it to make a profit is the moment costs balloon.
The price of the actual groceries as an input is kind of irrelevant since is a commodity. It’s that Costco and others are insanely efficient at the back office and supply chain logistics. They have massive economies of scale and the only thing they care about is cost reduction in the pursuit of profit.
The mandate for a gov grocery store is low prices. OK, that’s fine. That’s the easy part. Who is going to be worried about all the rest of the costs. Mamdani and the gov have every interest to just pay whatever to make it look good politically. They have interest groups that will want fair union wages. They will be forced to negotiate with suppliers when they don’t have any expertise. The difference will be billed to the taxpayer.
The fundamental issue is Mamdani has much more to lose from a failed grocery store politically wise than just dumping taxpayer money into it to make it look like a success.
AccurateLaugh50 | a day ago
Here's the thing: regular grocery stores' profit margins are already razor-thinly low
angryfan1 | a day ago
I think Walmart's margin is 3-4% and they make the bulk of that margin on non food items like clothing and electronics.
chronoit | a day ago
Correct about 0.5%-2% industry wide in the US. There is still margin to work with there which is why I'm more interested to see how this turns out than I might otherwise be.
FaultRoutine3520 | 20 hours ago
This is a myth. The data points to 5% as the industry average. NYC is not average for most things and I imagine ( after living here for 8 years) that the prices I’m seeing (20-50% higher than Costco) means they aren’t as razor thin as they seem.
Again industry average.
Weird-Knowledge84 | 20 hours ago
You think NYC bodegas are making big profits because they have higher prices than Costco?
Have you considered maybe their costs (relative scale) are much higher than Costco and also because they don't charge a membership fee?
FaultRoutine3520 | 19 hours ago
All I can tell you is the prices are 20-50% higher than Costco, and they deal in cash. I don’t think life is all that bad for them.
Weird-Knowledge84 | 17 hours ago
Buddy, how about you do a little research into how businesses work before declaring some hot takes that they must be making huge profits.
FaultRoutine3520 | 17 hours ago
What are hot takes when I see the prices weekly
Weird-Knowledge84 | 12 hours ago
Do you know their operating costs? You realize profit is revenue minus costs, right?
FaultRoutine3520 | 7 hours ago
That’s why is a pilot program. So we can collect those data points.
Weird-Knowledge84 | 20 hours ago
You think NYC bodegas are making big profits because they have higher prices than Costco?
Have you considered maybe their costs (relative scale) are much higher than Costco and also because they don't charge a membership fee?
ShrimpCrackers | a day ago
Doesn't even have to break even, look at the production value of a lot of things like high-speed rail and subway systems, they don't have to break a profit but they provide immeasurable value.
RockDoveEnthusiast | a day ago
People also entirely miss the point that the city already spends millions subsidizing grocery stores. Mamdani's argument (right or wrong) is basically "let's cut out the middleman and subsidize the buyer directly."
FangioV | 21 hours ago
It would be cheaper and easier to just give people money.
Weird-Knowledge84 | 20 hours ago
Cutting out the middleman would be giving the money directly to residents and have them decide how to spend the money. This is the government deciding it can run grocery stores more efficiently than private industry.
SueNYC1966 | 4 hours ago
Give that 70M to food banks so they can buy in bulk.
Wayoutofthewayof | 22 hours ago
You can "subsidize" the buyer by cutting taxes or offering payouts directly to those that need it. Just fail to see how this is the most efficient way to redistribute taxes.
derpasuarusx | 21 hours ago
You free up money by cutting out leeches like walmart
WillowgirlIII | 19 hours ago
You can give lots of jobs to your buddies!
PSUVB | 23 hours ago
Why not just give poor people vouchers? That would be far more efficient and help more people.
The answer is Mamdani wants to cut a blue ribbon in front of a store to post on tik tok. It’s good politics but horrific economics and slop public policy. . The fact people are this confused is scary.
WillowgirlIII | 19 hours ago
When all of the privately-owned stores around the city grocery go out of business, are you gonna vote for a guy (or gal) who pledges to shut down the wasteful, inefficient city enterprise? Or are you gonna reelected Mamdani to keep the store you rely on open?
nam4am | 17 hours ago
It's the climate change denialism of the left.
The fact that it's completely at odds with all evidence and expert opinion is a plus for them, because anyone who has actual expertise is an "elitist" or "bootlicker" or whatever other term makes them feel proud about their ignorance.
Junglebook3 | a day ago
Many government services don't make a profit, for example parks. City residents can collectively make a decision: we want our pot of money to pay for public transit, libraries, health care, housing, and now... Food. This conceptually makes sense to me, but it's all in the implementation details. If my tax funds feed a poor person that seems to be a huge win.
GerryManDarling | a day ago
It will make sense if a bread cost $10 and if you only pay $9.99 for the bread in tax dollars. Government don't have magic money. The money comes from you. If you are paying $20 tax for a $2 bread, they are screwing you, not helping you.
It's different from a park because no private business is selling you a park, or if you give the land to the private business, it will become a golf course instead of a park. There are plenty of groceries store selling you food for pretty efficient pricing, not some imaginary "rip off" price everyone imagined. The inflation is due to Trump and his policy, which people voted for.
WillowgirlIII | 19 hours ago
Actually most of the grocery price inflation took place in 2022. It's running at a normal rate of inflation now, but prices aren't going DOWN, so people are pissed.
Wrenchinspokesby | a day ago
It also makes sense when you realize this will create many overpaid unionized government jobs, kickback contracts, and therefore expand the pool of people who will never vote to unwind this
Zetesofos | a day ago
The irony is its capitalism that creates kickback contracts - governments don't contract with themselves, but they do with private contractors.
If a government does work directly, there is less space for people to siphon off wealth for personally enriching themselves.
thewimsey | a day ago
You have no idea how any of this works.
>governments don't contract with themselves, but they do with private contractors.
And in their contracts, they tend to add a lot of provisions that raise prices. Like specifying the use of union labor and adding other specific requirements that aren't necessary but that inflate the prices.
>If a government does work directly, there is less space for people to siphon off wealth for personally enriching themselves.
There is more space to waste more money because the government has no incentive to save money, and every possible incentive to benefit favored groups, including steering contracts to favored donors.
Wrenchinspokesby | 23 hours ago
LOL you must not be familiar with business in NYC and the tri state area
thewimsey | a day ago
We already have SNAP for poor people; this won't help them much at all.
Super_Mario_Luigi | a day ago
This all sounds very good on the internet. Until the bill comes
JC_Hysteria | 18 hours ago
The intent seems fine on its face, but I’m not sure “good results” can be objectively quantified.
It’s really just where subsidies are applied in the production chain…
We’re socializing another one on top of what’s already in place that makes these goods cheaper to produce (with consistent quality).
chronoit | 6 hours ago
I think this is a valid critique. There are lots of people in this discussion who think the food industry is just capitalism at it's finest when it's filled to the brim with government subsidies all the way down to the farmers and ranchers.
AstralCode714 | a day ago
Organizations that arent motivated to make a profit typically dont perform well as they aren't punished when they do a bad job. The people running them still make a salary regardless if they actually succeed in their mission.
Ie. See government agencies/NGOs that were in charge of managing Los Angeles' homelessness crisis. $12 billion tax payer dollars spent and homelessness has gone up.
AtomWorker | a day ago
The problem isn't profitability, it's sustainability. Costs never stop rising. That's why every competent government in the world strives for maximum efficiency if not outright profitability. Failing that, they're forced to cut costs and reduce services because you can't just raise taxes indefinitely.
Zetesofos | a day ago
This argument doesn't make sense - you can't increase profitability infinitly either - so taking either calculation to 'infinity' doesn't help solve an issue.
As someone else mentioned - its less efficient to subsidize private grocery stores than it is to fund one directly, and pass those savings off to the buyers.
CauliflowerDaffodil | 20 hours ago
Subsidizing supply-side whether private or public is highly inefficent. You subsidize demand.
Zetesofos | 18 hours ago
More to the point - the goal of government isn't to be the most 'efficient'. Efficiency is "Just in Time" logistical delivery and "Variable Pricing". Efficiency isn't always supposed to be the goal.
When you increase efficiency, you decrease redundancy and resilience.
Governments are supposed to be the supplier of last resort, they NEED to be there when other markets fail. Which means - they spend more with the risk of waste, so that they can meet the needs when no one else can.
AtomWorker | 5 hours ago
These grocery stores don't exist in a vacuum. Their operating budget has to come from somewhere and dozens of other departments vying for a piece of the city's tax revenue.
So as their profit margin shrinks from 3% to 1% to negative, thanks to all kinds of externalities, what do they do? Hope that they grab a piece of someone else's budget? Bank on taxes getting raised further? Or start charging more and undermine their value proposition?
Again, if there were easy answers every country in the world wouldn't be wrestling with these problems.
Zetesofos | 4 hours ago
Are we talking the city stores, or other stores in the area?
If the former: yes, they are likely operating at a loss, which is likely intended and completely possible for government - government exists to provide service first, not profit.
If other stores - then yes, you are introducing more supply, which means some stores might suffer. But, that was also anticipated - the private stores in the city WEREN'T serving the needs of the population. The city store serves as increased pressure for them to adjust their business plans.
And this is because, fundamentally, there is no guarantee that profit as a motive always leads to better quality of life. It works in some cases, and others, the profit pursuit comes at the cost of public good.
This is an attempt at mitigating that mismatch.
ForMoreYears | a day ago
Also the governments job isn't to turn a profit. It's often to make/administer laws and take care of citizens. Even if these stores lose some money subsidizing food, you know, the thing everybody neess to live, isn't that what we ultimatwly pay taxes for, to provide a service a servive to tax payers
GerryManDarling | a day ago
That's magical math. Unless the government have magical ways to make food cheaper, you are better to use your tax dollars to buy food directly, instead of paying more money to the government to buy the same food. Even if they don't make profit, it'll still cost more to buy from a for profit business due to logistic and administrations. We had tried that in some countries before, it had 100% failure rate.
likesound | a day ago
The government can save a ton money just providing more food stamps than spending tens of millions on this project.
makemeking706 | a day ago
There is no long term savings when the price is set by third party.
Wrenchinspokesby | a day ago
There are no long term savings when the entity managing the grocery store has no incentive to manage operations cost effectively
InAingeWeTrust | 23 hours ago
The grocery store business is intensively competitive with very thin margins. Of course they have incentive to be efficient.
Wrenchinspokesby | 23 hours ago
Talking about a government run grocery store that “doesn’t exist to make a profit” and will inevitably be a limitless money pit
ForMoreYears | a day ago
Food stamps are federal and pay for all the food. This is municipal and only pays for the 30% trim. So no, Mamdani can't provide more food stamps, and no, it wouldn't be cheaper.
CauliflowerDaffodil | 20 hours ago
Nonsense. SNAP is federal, CFAP is state, Health Bucks is municipal. Every level of government can and does provide food subsidies.
City food vouchers would be immensely more efficient since there's no infrastructure costs, leveraging of existing private retail infrastructure, vouchers can be used anywhere in the city instead of one store per borough, and doesn't run off existing businesses that wouldn't be able to compete with government stores running on free real estate and tax exemptions.
angryfan1 | a day ago
So the government will sell an item they bought for 5 dollars to a citizen for 3 dollars? Instead of letting the consumer buy the item for $5.04.
ForMoreYears | a day ago
No, they'll sell it for $3.50 because that's 30% of $5.00, and yes, that difference will be paid for out of the billions Mamdani has already saved in the City's budget.
angryfan1 | a day ago
What billions has he saved? He spent so much he had to ask for money from Gov. Hochul.
Then went on to do a cut in taxes taken in by the city government.
ForMoreYears | 23 hours ago
He literally saved almost $4bn from a few tweaks to CityFEHP, delaying classroom size increases, and pension refinancing. Y'all legit have no idea what you're talking about and should spend literally 30s looking into the things he's actually done before you come in here making fools of yourselves.
And he didn't ask Albany for anything, the State government simply funded its #1 driver of tax revenue which is NYC.
angryfan1 | 21 hours ago
He didn't save money even by your own biased explanation. He just delayed payments and pushed pension payments to a later date.
chitown87 | a day ago
He hasn’t saved shit. He got an enormous bailout from the state government.
ForMoreYears | 23 hours ago
False. He's saved ~$3.4bn alone through simple tweaks to things like CityFHEPS, class size requirements, education costs, and pension refinancing.
Also, Albany allocating money to New York City isn't a bail out, it's the State government funding its #1 driver of tax revenue. You don't even know what that term means so keep yapping lmao
Dude balances the budget in 170 days and gives his constituents cheaper groceries and y'all somehow still salty. s
chitown87 | 23 hours ago
Again, he didn’t balance the budget. He got bailed out.
ForMoreYears | 23 hours ago
That doesn't even make sense lmao go away troll
Weird-Knowledge84 | 19 hours ago
Simple tweaks like delaying pension contributions and delaying the class size reductions that unions wanted?
Wow, what a genius. Nobody else could have thought up imaginative solutions such as kicking the can down the road!
What genius solutions will he come up with if Hochul decides to not pay up in future years, or when the pension payments need to happen, or when the unions refuse to delay education investments anymore? What then?
pandaslapper33 | a day ago
The service is to guarantee rights. Anything past that is hotly debated.
ForMoreYears | a day ago
No, the governments job isn't only to guarantee rights. That's ludicrous on its face.
pandaslapper33 | a day ago
Those are the only things we all agree on. Anything past that is nuanced and has different degrees and opinions depending on the time period.
ForMoreYears | 23 hours ago
So the Federal government maintaining the federal interstates to the tune of ~$75bn every year isn't them providing a service?
Please, stop. You're only going to make a fool of yourself if you keep pursuing this.
pandaslapper33 | 21 hours ago
I am not saying they don’t do anything or should not do anything beyond protecting rights. I am saying that things like “should the government open grocery stores” is not something you are going to find support for outside of a few select dense areas.
ForMoreYears | 20 hours ago
A few select dense areas is a pretty funny way of saying the most populated, diverse and economically productive metropolitan center in all of North America.
likesound | a day ago
Not making a profit means it’s not a workable or scalable solution to fix food dessert. There is only so much tax dollars you can put into loss generating ventures. Every loss means less money for the government to spend on other social programs.
WillowgirlIII | 19 hours ago
If it buys vote, though ... !
MIT_Engineer | 2 hours ago
> The goal for these stores should and likely is to break even.
I think Mamdani disagrees with you. What I got from the article is that the stores are going to actively lose money and cost the taxpayers. At best, their goal is to obfuscate the losses a bit, make them harder to tally up cleanly.
aznology | 22 hours ago
Yea but that's ONE item or a handful of items to lure u in. They make a lot more money on all the other stuff. Airconditioners, lamb shanks, tacos, bakery.
Mamdani is gonna be a whole store just selling everything at a loss. EVERYTHING at a loss.
chronoit | 22 hours ago
They are only providing the discount on several items deemed essential and the rest will be determined by market factors based on the article.
Joltizer | 18 hours ago
> I think the hardest thing for people to get over is the idea that everything is designed to make profit
Why do uneducated people come onto an economics sub and say things like this? The profit motive is what makes the private sector so efficient and so much better at feeding people than the government run grocery stores
notaquarterback | 22 hours ago
I like the general premise of this whole thing, but I will say that there are so many neighborhood grocery stores often run by minorities that will suffer if he really tries this. I think there are other things I can focus on but since he campaign on it I think they have to go through with trying it, and if nothing else I'll give us some really good data on how to do this because I think there are communities especially in rural area where this is the right answer.
FaultRoutine3520 | 20 hours ago
What neighborhood grocers? There’s none in my hood. And the markup at the store is 20_30% on most items. Sometimes even 50%.
macronotice | 21 hours ago
Are they going to arrest people who steal from the stores, like those bootlicking capitalist pigs they hate but only make 5% margins on revenue?
nam4am | 4 hours ago
None of the big grocers earn close to 5%. Kroger and most others are <1%. The only ones I can find that are over 2% are places like Costco and Walmart that make the vast majority of their profits from higher margin goods outside of groceries, memberships etc.
macronotice | 4 hours ago
Yeah buts that after interest and taxes right? Before tax and interest, which these stores wont have, I think it’s closer to 5%
Prestigious_Load1699 | 10 hours ago
No, the stores will put all other grocers out of business and then quickly run into food shortages.
It’s already been shown historically.
SueNYC1966 | 5 hours ago
I think they decided no cooked foods so the bodegas will get some business…but don’t all the food insecurity people talk about people working multiple jobs that cannot cook or don’t have the means to cook. I read a lot about it and they seemed to brush this stuff aside so I guess it is rhetoric from those advocates.
Kershiser22 | 4 hours ago
> “If one publicly owned grocery store that brings prices down in the neighborhood is enough to put someone out of business, then maybe they shouldn’t have been in that business in the first place,” Mr. Gordillo said.
This is insanity.
Zach_bdbd | a day ago
Socialist is going to find out the definition of second order affects the hard way; Some stories will respond by not selling these “essential” goods, as they won’t sell the products at a loss.
Other stores will rise prices to game the system. The “essentials” become more expensive than the no essential alternatives.
Then there is risk of over demand of these tax payer subsidised shopping centres.
likesound | a day ago
The discount will probably only apply until supplies last which will lead to shortages in the government stores.
Prestigious_Load1699 | 10 hours ago
Haven’t we already learned this lesson?
chronoit | a day ago
This is essentially just how amazon and walmart built their companies but people are seemingly only mad when the government might do it. Uber/Lyft ran completely unprofitable attempting to bankrupt the cab industry. The entire AI industry is a money pit attempting to get people hooked on low cost plans before switching over to a more expensive token model. Teams is trying to kill slack by being included (free) instead of being itself a paid product.
There are many many examples of capitalism where competitors have artificially kept prices lower and drive out competitors whom they then took over for. This plan might even just become a prudent example of cutthroat capitalism.
Time will tell but either way it'll provide good data to look at.
likesound | a day ago
People are mad because burning taxpayer money on low return projects is dumb. No one cares if Ventura capitalist and billionaires lose their money on poor investments in Uber, Lyft WeWork etc..
LittleMsSavoirFaire | a day ago
In fact I encourage it. Better that than Private Equity
Moonagi | 18 hours ago
> This is essentially just how amazon and walmart built their companies but people are seemingly only mad when the government might do it.
lol because the govt is beholden to tax payers. If the govt was burning your money with failed investments, would people be happy? No.
Uber and Lyft are PRIVATE companies that can burn the money because INVESTORS take the risk when they INVEST in those companies.
Now you know the difference between the public and private sector.
flat-waffles | a day ago
No shot large stores will ever not sell essentials. It's the core products that bring customers into the store.
robbiechopsticks | a day ago
These are city owned grocery stores, my friend. They assumedly will not operate for profit, they operate for public good.
The whole point of this is that it is a choice to reorient parts of the economy so that they are immune from the market dynamics of late stage capitalism that you seem to think are facts of life.
What you described is a how the market might react to a half assed and poorly designed govt intervention in a hypercapitalist system, not how a socialist system would react.
Wrenchinspokesby | a day ago
This “choice to reorient parts of the economy” will certainly impact local bodega owners in the surrounding area
robbiechopsticks | a day ago
It very well might! Mamdani admin should absolutely be smart about the way this is implimented to reduce the negative impact. The AI bumble bursting will hurt many retirement savings and pensions. Single Payer Healthcare will eventually cause many job losses in the insurance industry. The economy is complex. Struggling people having the basics for survival should be a primary goal of any rational system right? Clearly that is not being provided now, is it primarily bodega owners who profit from this or folks higher up the food chain?
LittleMsSavoirFaire | a day ago
I guess it depends whether the meat is cheap enough to draw shoppers from other parts of the city, thereby depriving other stores of their margin/revenue, adding to "food desertification."
robbiechopsticks | a day ago
I'm sorry... if people have the access to (and in your theoretical also preference for) cheaper food, that will lead to.... food deserts?
LittleMsSavoirFaire | a day ago
They used to spend dollars at for profit stores. When they spend them at the competitor that's underwritten by the state, what happens to the original stores?
If the socialist aspect is the part you're choking on, consider that this is how Walmart killed Main St. businesses too.
robbiechopsticks | a day ago
So you are operating on the assumption that enough of these stores will be established to put bodega out of business, and then also that the Mamdani stores will disappear and leave a food desert? Bc with out the leaving part, all I see is people getting fed.
The walmart example is an interesting one, except eliminating competition is part of their business model. Surely that wont be the case for these Mamdani stores. As ive said, he certainly has a responsibility and ability to make sure impacts to the broader food supply industry are minimized (Income based eligibility for example). I would hope he does those things.
You are making a lot of "bad faith" assumptions about the carelessness about which this program will be run.
LittleMsSavoirFaire | 23 hours ago
Governments are not exactly known for replacing markets effectively. But I'm sure they'll try very hard.
robbiechopsticks | 22 hours ago
A government option isnt the worst thing. I love my municipal golf course. I love investing in muni bonds. Many such cases
osuzannesky | 23 hours ago
Most people who can afford regular prices will not be running to government subsidized stores because I am guessing that the variety of foods and different brands will be in less and focus on just essentials and most who can afford to do so won't want to waste time going to multiple stores. I invariably go to one store that has the most of what we like to eat, rather than try to shop around for the best price. However, if I were struggling to put food on my table, I'd put in the effort. Overall, there are plenty of customers for regular stores to stay in business in a densely populated city like NY. So my guess is that this will work as intended for those who need it the most.
DL505 | 8 hours ago
For shits and giggles I asked Claude to take 2 publicly traded grocers financials and determine what could happen.
It is also very unlikely that Mamdani can match Kroger and Albertson's purchasing power.
Yes, I realize this is a simple exercise but gives an idea of what would happen
FY2025 for both with a 30% decline in revenue.
Kroger:
Rev 103.3B
COGS (fixed) 113.8B
Gross profit -10.5B
Operating expenses 31.9B
Net loss 43B
Albertsons:
Rev 58.22B
COGS 60.57B
Gross profit -2.35B
Operating expenses 21.8B
Net loss 24B
Other things
We can assume that these stores will be staffed with NYC government workers. The costs for these workers is likely to be $6-7 more per hour for the NYC benefits/wages.
Loss of economies of scale, in addition to raw goods purchasing power. These grocers obviously have complex systems in place for SCM, management etc.
Net loss would be much larger.
What a fun experiment this will be to watch....
FaultRoutine3520 | 7 hours ago
because ai is always right.
LetterheadOwn9453 | 21 hours ago
I dont give a shit about groceries. Fix the housing problem. This is the real issue. If mayors actually promoted new builds then everyone could afford a home
jamesqua | 19 hours ago
in Manhattan?
Joltizer | 18 hours ago
Yes. Plenty of empty lots and low rise. Need to abolish rent control and tell NIMBYs to f off to make it happen
SueNYC1966 | 5 hours ago
You really think all the transplants who shop at Trader Joe’s are hauling their butts to Hunt’s Point. They will get to meet all the drug addicts hanging out at the 125th Station in Harlem near all the methadone clinics. It’s good for them to get out of LIC, Williamsburg, Below 14th Street, and Astoria. I agree with the poster above. Housing more pressing than this.
web_robot | 23 hours ago
If you look at a store like Aldi and compare it to Kroger you start to see just how much shit gets marked up and how inefficient these mega grocery stores are. Yes some things are sold at a loss and others are sold at 40% markup. Some grocery stores maintain an expensive seafood department where much of the product is discarded instead of being marked down. If they follow the aldi model of efficient food sales, private label items, etc they absolutely can make this work. They could probably also do a coop model of local first with affordable produce bought in bulk. If they just mirror a Kroger / Fred Meyer / Metro Market / Ralphs / Pick 'n Save / Harris Teeter (these are all the same company and a box of cereal costs like $7 for some reason ) then they probably will fail as their customers don't seem to price shop.
TommoVon | 11 hours ago
Kroger has a net margin of 0.7%. Yes, some things need to be marked up to keep the entire thing operational. I say thank you Kroger!