Unpacked: The history of city-owned grocery stores and how public-private partnerships have worked in other markets
Zohran Mamdani, the Democratic nominee for mayor of New York City in the upcoming November election, has proposed creating a network of city-owned grocery stores focused on keeping prices low rather than making a profit.
The stores would not have to pay rent or property taxes while buying and selling at wholesale prices, centralizing warehousing and distribution, and partnering with local neighborhoods to source products, according to the Mamdani campaign website, allowing them to pass on those savings to shoppers, the campaign says. In an interview with News 12 New York in May, Mamdani said he would open five city-owned stores, one in each New York City borough, and that it would cost the city $60 million.
Mamdani has yet to share in detail how his administration would organize such a system, but industry experts and examples from other cities give some clues as to what it could look like in practice. Many of the most prominent past examples of government-supported grocery stores are ones in which the city works together with private operators in different ways, such as by serving as the landlord or providing tax incentives. It’s unclear at this point whether Mamdami, as mayor, would take this kind of approach or take more control over the operations.
Governments getting involved in groceries “sounds to the uninitiated ear as something completely foreign, but it’s actually what we’ve been doing for generations to provide healthy food for people,” said Nevin Cohen, associate professor at the City University of New York Graduate School of Public Health and Health Policy and director of the CUNY Urban Food Policy Institute. He was pointing to the fact that the federal government has also operated commissaries — discounted grocery stores for military members — since 1991, and that New York operates several public markets and food pantries.
The public markets are not supermarkets but house food vendors that cater to each individual neighborhood, from the Hispanic market La Marqueta in East Harlem to the Italian-influenced Arthur Avenue Market with bread, pasta, meat and pastry vendors. In a different kind of public-private partnership to provide fresh food to local residents, the city provided tax incentives for supermarket operators and developers through its Food Retail Expansion to Support Health (FRESH) initiative.
Current Mayor Eric Adams, who is also running in November, said Mamdani’s proposal would “devastate” local bodegas and supermarkets. John Catsimatidis, CEO of grocery chain Gristedes, told Fox Business that he would close, sell, move or franchise his operations if Mamdani is elected, saying he wouldn’t be able to compete with city-owned stores. Cohen disputed these claims.
“I don’t see this as having any kind of measurable negative impact on private supermarkets,” Cohen said. “People have shopping patterns that are not going to change overnight because of five new supermarkets in the city.”
In the past, cities have partnered with local grocery operators to run city-funded grocery stores. Mohamed Amer, a strategic management adjunct professor at Pepperdine University and a former communications executive for SAP who was focused on retail and consumer products, said this, in his opinion, is the best way for city-owned grocery stores to work. Cities could own grocery buildings or even distribution centers that could support multiple stores in areas that otherwise wouldn’t be feasible for private grocers.
“It has taken decades for existing private-sector players to develop the processes, the systems, the training, all the activities that [they] need in order to be proficient in what they’re doing,” such as preventing spoilage or theft, Amer said. “Where [cities] can get the most bang for their buck is to provide the infrastructure.”
There are examples of this nationally. The small town of St. Paul, Kansas in 2013 bought out its local grocery store – previously constructed through a public-private partnership – and hired a local husband and wife to manage it, according to the Rural Grocery Initiative at Kansas State University.
In November 2024, Maurer’s Market signed a lease agreement with the city of Madison, Wisconsin, after a previous grocer stepped out, with the city funding building improvements. The mixed-use property, a former U.S. Army building, was redeveloped through a partnership between the city and developers.
Also late last year, the city of Atlanta’s development authority, Invest Atlanta, approved about $8.2 million in incentives to open two grocery stores in low-income neighborhoods in partnership with independent grocery chain Savi Provisions, according to the Atlanta Journal-Constitution.
“If [Mamdani] wins and follows through on this, this would be an exciting experiment,” said Cohen.
Cohen expects Mamdani’s grocery stores could take a similar route as other cities in partnering with private grocers, but that they could also use city employees or adopt a co-op model.
“The proposal was very general,” Cohen said. “He didn’t provide details because this has to be designed, and it probably would look different in different boroughs, in different neighborhoods, depending on the market in those communities, what the competition is, and what people need and want.”
Cohen also said the city could take an e-commerce route. Personally, he said, he has a proposal into the USDA’s Healthy Food Financing Initiative, which uses federal money to support the creation of new supermarkets, for a CUNY online supermarket that would use an online platform such as Mercato or Instacart allowing the school to more efficiently stipend at-need students. Instead of having to go to a food pantry in person, which could be stigmatizing for some, students would get credits on their account that they could use at their local grocery store.
“The idea for us, as a public health school, would be to then be able to change the messaging, provide information on the website, even get Instacart or Mercato to shift the visibility of items you know on the site to see whether that actually encourages students to eat healthier,” Cohen said.
As Mamdani’s push for city-run grocery stores gets fiercely debated in the press and on social media, Amer believes initiatives like these would complement the private grocery sector, not replace it.
“The private sector should actually welcome that, not as competition, but as a pressure valve to maintain social stability” in food deserts as those neighborhoods revitalize, Amer said. “I think it pushes the envelope, and it forces a conversation and debate around how you address these food deserts, these inequities and the spiraling prices.”
Ultimately, he believes that “when you take this through its evolution, it will end up being more along a public infrastructure, private-operation type of a model, … versus city-run through and through.”