By Anil Wasif

January 4, 2026

As New York Mayor Zohran Mamdani begins his first term at City Hall, the transition from the poetry of a populist campaign to the prose of municipal governance is underway.

Among the most scrutinized items on the new administration’s agenda is the $60 million pilot project to establish five city-run grocery stores, one in each borough. The idea of municipal supermarkets aims to address an issue that even Donald Trump has acknowledged as a major public concern: the high cost of groceries.

While skeptics warn of bureaucratic overreach, history is often written by those who ignore the consensus of the day; critics will continue to say this is impossible until it is done, so here is the necessary advice for the Mayor’s office to ensure it survives the “grocery math”.

The proposal addresses a fundamental crisis: nearly 1.4 million New Yorkers are food insecure, a number that reflects a systemic failure where private grocers cite thin margins and high security costs as reasons to abandon historically underserved neighbourhoods.

The policy case for intervention is rooted in a documented market failure. In Chicago, the 2023 exit of four Walmarts and several Aldis proved that when the private sector cannot meet profit objectives, it will abandon even the most vulnerable communities.

For the Mamdani administration, the philosophical justification mirrors that of Rick Giefer, the former mayor of St. Paul, Kansas: if a city can pump water to a citizen’s house as a public good, providing access to nutrition is a logical extension of that same mandate.

Indeed, a study by HR&A Advisors concluded that a municipal model is “necessary, feasible, and implementable” precisely because traditional grocers are often unwilling to absorb the market risks inherent in low-income urban tracts.

However, “feasible” is not synonymous with “easy.” Errol Schweizer, a veteran of the commercial grocery industry, warns that any municipal effort must respect the “grocery math”: national chains operate on razor-thin net margins of 1% to 3%.

For a city-run store to offer the significant savings Mayor Mamdani envisions, it must solve the “Goliath problem” of buying power. Large distributors often require stores to meet massive minimum weekly purchase orders—sometimes $20,000 or more—to unlock wholesale prices.

As seen in Erie, Kansas, single municipal-run stores often fail because they cannot negotiate the deep discounts that giants like Walmart command. Erie’s market lost $132,000 in a single year, eventually leasing the operation back to a private company after being unable to compete with a Dollar General across the street.

Even Baldwin, Florida, a frequent poster child for city-run stores, was forced to close its doors in 2024 after struggling to break even.

To avoid becoming a David trying to buy at prices only a Goliath can afford, the Mamdani administration should look toward structural leverage. The Vanderbilt Policy Accelerator recommends the creation of a “buying cooperative” or the inclusion of a Most Favored Nation (MFN) clause in state-level funding legislation.

Such a clause would prevent distributors from charging a public grocery store more than they charge its private competitors. Without these protections, a municipal store may end up charging higher prices than the very retailers it aims to undercut, effectively punishing the low-income residents it intended to help.

Furthermore, the administration must be wary of policy overload. There is a natural political impulse to use municipal stores as a vehicle for every progressive goal—unionized labour, rooftop solar, and strictly local procurement.

To avoid becoming a David trying to buy at prices only a Goliath can afford, the Mamdani administration should look toward structural leverage.

Matt Bruenig of the People’s Policy Project notes that, while noble, these goals can lead to mission creep, where the added overhead of achieving social objectives outweighs the primary goal of food access. Sourcing exclusively from local farms, for instance, often results in prices that are prohibitively expensive for working-class families.

Norway provides a useful institutional framework here: categorizing these stores as “category-two” (state-owned) enterprises dedicated not to profit, but to the “efficient attainment of public policy goals”. In this view, losing money is not a sign of failure, provided the loss is the minimum required to ensure universal food access, much like the United States Postal Service.

The administration would also be wise to study the military commissary model, a century-old “public option” that provides families a 23.7% to 25% savings. However, Bill Moore, former CEO of the United States Defense Commissary Agency, points out that this success requires a $1.4 billion annual taxpayer subsidy to cover operating costs like salaries and utilities. New York must decide if it is prepared for a “public utility” model that requires permanent, recurring subsidies rather than a one-time $60 million injection.

To mitigate the bureaucratic pitfalls of a purely “city-run” operation where hiring processes can be slow and retail expertise can be non-existent; the Mamdani team should consider the public-private partnership (PPP) model now favored in Atlanta and Chicago.

In this model, the city owns the real estate and provides “de-risking” capital but leases the day-to-day management to experienced grocers or non-profits. This allows the city to stabilize a neighborhood without needing to master the complexities of highly perishable supply chains.

Atlanta’s Azalea Fresh Market serves as a contemporary example of this hybrid approach, using city-backed grants and loans to anchor a store in a food desert while maintaining private operational standards.

Beyond access, such partnerships also promise community wealth building. By pursuing worker cooperatives or community investment vehicles, the city can ensure that the financial resources generated by the store stay within the neighbourhood.

Crucially, as scholars note, the core problem in urban centres is often not a lack of food availability but a lack of access—shoppers simply don’t have enough money in their pockets to afford what is on the shelves. Mamdani’s other policies, such as rent freezes and free transit, may therefore be as critical to solving food insecurity as the stores themselves.

Operational success will also depend on the mundane machinery of retail: Point of Sale (POS) systems, robust security to manage “shrinkage,” and “store champions”.

Experience shows that a store’s success often hinges on a manager who is a “champion” from the surrounding community, possessing both the passion for food justice and the technical acumen to manage a low-margin business. In high-crime areas, an active security presence may be a necessary expense to ensure both employee safety and customer confidence.

New York City has a unique logistical advantage often overlooked in this debate: its public school system. Serving 900,000 meals daily, the city already manages a massive logistical operation of sourcing, warehousing, and distributing staple goods efficiently at scale. If the administration can tap into this existing “logistical muscle” rather than building a new supply chain from scratch, it may find the efficiencies that smaller towns like Baldwin lacked.

The municipal grocery store is essentially the public transit of the kitchen table. Just as a city bus runs a route that a private taxi finds unprofitable, the city-run store aims to bridge the gap between where the market ends and where human necessity begins.

If the Mamdani administration can maintain strict mission discipline, focusing on the plumbing of the supply chain and resisting the urge to solve every urban ill through a single storefront, it may provide a viable blueprint for other mayors watching.

But if it fails to respect the math, it risks leaving residents in a deeper food desert than the one it inherited.

Policy Columnist Anil Wasif is a public servant in the Ontario government. He serves on the University of Toronto’s Governing Council and the Advisory Board of McGill’s Max Bell School. Internationally, he serves on the OECD’s Infrastructure Delivery Committee. He co-owns and manages the Canada-born global non-profit BacharLorai. The views expressed are his own.