City-subsidized celery

In mid-April, New York Mayor Zohran Mamdani announced the location for one of the city’s much-anticipated municipal grocery stores. A 9,000-square-foot store in Harlem is expected to open by 2029, while another government-backed grocery store will open in 2027. The mayor plans to open one of these stores in each of New York’s five boroughs by the end of his first term, costing New York City an estimated $70 million.

“The city will subsidize a core set of staples, a private operator will run the store to the standards that the city will set,” Mamdani said at a press conference. “Grocery shopping will no longer be an unsolvable equation.”

Faced with rising food prices, cities in states such as Florida, Kansas, Illinois, Wisconsin, and Georgia have also initiated government-backed grocery stores, with mixed success. Advocates say these public stores make food more affordable and tackle the problem of “food deserts” in low-income communities that grocery retailers have abandoned. But conservatives say these projects usually fail since they work against the very model that makes grocery stores successful at the expense of taxpayer dollars.

Government-backed grocery stores fall into two primary categories: private-public partnerships or government-owned. The city of Little River, Kan., for example, purchased the Garden of Eden grocery store from its owners in 2017 and then leased it back to them in a partnership. But the city of Baldwin, Fla., owned the Baldwin Market, which opened in 2019.

“We take the water out of the ground, and we pump it to your house and charge you,” Baldwin Mayor Sean Lynch told The Washington Post. “What’s the difference with a grocery store?” The Baldwin Market closed in 2024 due to chronic financial deficits.

Public grocery stores are somewhat new to the United States, but they have long been fixtures of nations like Venezuela and the former Soviet Union. Bulgaria’s government has plans to open 1,500 state-run grocery stores with its Store for the People initiative.

Proponents of municipally backed grocery stores say these stores tackle the problem of so-called “food deserts,” areas where communities have little to no access to fresh food. Nearly 19 million Americans have limited access to a nearby grocery store, according to the U.S. Department of Agriculture’s Food Access Research Atlas.

For some, grocery affordability is more of an issue than access. According to the USDA, about 14% of households struggle with food insecurity. The Bureau of Labor Statistics said the cost of groceries increased by nearly 30% between 2020 and 2025.

To address limited access to cheap groceries, state-funded grocery stores sometimes operate on government-owned land to alleviate rent or property taxes, and they often operate as nonprofits to keep the price of goods low.

But even massive grocery store chains like Walmart operate on very thin profit margins, usually between 1% and 3%. To stay competitive and make a profit, large stores such as Kroger and Aldi usually have to sell at high volumes and mark up wholesale items. Since a city-run grocery store might not be able to secure wholesale prices like a big-box retailer could, the municipality would have to offer low-cost items at the taxpayer’s expense, effectively eliminating profit motive.

“Either they lose so much money that they close, or they lose money and taxpayers have to make up the difference,” said Howard Husock, senior fellow at the American Enterprise Institute.

Husock compared municipal grocery stores to U.S. Department of Housing and Urban Development housing projects. Many of these communities have become dilapidated and crime-ridden, some so devastatingly that they have been demolished. “[HUD housing] didn’t work out very well because [the government] didn’t know what they were doing with housing,” he said. Although a few municipal grocery stores throughout the United States remain open, several have closed citing high crime rates and high operating costs.

If the government provides a ready-made safety net, there’s little incentive for a city backed-business to run efficiently, said Peter Zaleski, an economics professor at Villanova University.

Zaleski told WORLD via email that a government-run grocery store probably wouldn’t provide great customer service either. “Prices and profits send the signal to producers on what products to deliver, so, there’s a safe bet that these stores will stock products people don’t like all that much,” he said.

Even if the store did stock the right products at a low cost, it’s likely shelves would frequently empty due to shortages. “Neither scenario will help the poor,” Zaleski said.

Howard Husock believes the government can and should work to address food insecurity by using tools within its wheelhouse. “There are core functions that the government has long experience doing, but buying and selling groceries is just not one of them,” he said.

Local governments could prioritize cracking down on crime since quality grocery stores exit areas of high theft. A Target store recently left Harlem, N.Y., not far from the planned site of Mamdani’s municipal grocery stores, due to crime rates. “If the city had done a better job of protecting their store, maybe it wouldn’t have closed in the first place,” Husock said.

Governments could also help lower the cost of delivering groceries to low-income areas. Communities could revise zoning laws, making it easier to open new grocery stores. More grocery store competition means lower prices all around, said Anne Rathbone Bradley, vice president of academic affairs at the Fund for American Studies. Especially in a densely populated city like New York, government-backed grocery stores would take business away from existing stores and bodegas, effectively driving up the cost of food. “You can’t compete with a heavily subsidized cup of coffee or loaf of bread,” Bradley said.

Even though the idea of government-supported stores might sound good on paper, the concept doesn’t work in practice, Bradley said. “If we had all state-run grocery stores in the United States, we’d have bread lines.”