Mayor Zohran Mamdani holds up bananas labeled with a 30 percent off sticker during an announcement on municipal grocery stores at a Campaign for Hunger community food distribution center in Brooklyn, New York, on July 27, 2026. | Adam Gray/Bloomberg via Getty ImagesNew Yorkers will soon enjoy a 30 percent discount on their meat, seafood, milk, and bread — so long as they shop at a city-owned store.Mayor Zohran Mamdani touted such bargains this week at a press conference detailing his plans to launch five public grocery stores, in a bid to lower New Yorkers’ food costs. Under the proposal, the city would own each supermarket and dictate its pricing and labor practices, while private grocery companies would handle the day-to-day operations.Key takeaways• Mamdani plans to open five city-owned grocery stores offering steep discounts on staple foods.• Public stores can help where private grocers are absent, but that is not the main problem in New York City.• The stores are unlikely to sell food more efficiently than large private retailers.• The same public money could reach more low-income New Yorkers through direct food assistance.Mamdani’s proposal has been getting people worked up from the moment he unveiled it on the campaign trail for his 2025 mayoral run. For many progressives, state-owned supermarkets embody one of their movement’s highest ideals — the prioritization of public needs over private profits. For conservatives, meanwhile, “Mamdani Marts” represent an attack on free enterprise (if not, the first step on the road to Soviet breadlines).While stimulating, these grand philosophical arguments have often overshadowed more banal but pressing questions: Would public grocery stores do more to advance Mamdani’s stated goals than other things the city could do with the same money? Has New York’s mayor discovered a way to sell groceries more efficiently than Costco does — or an approach to nutritional relief more effective than simply giving poor people more cash and food?The answer to both of these questions appears to be “no.” And that should concern more than just New Yorkers. Mamdani’s vision is already inspiring imitators, with San Francisco and Boston both exploring their own public grocery store proposals. And in national discourse, the mayor’s policy is widely understood as an experiment — one testing a bold new theory of how governments can make food more affordable.Unfortunately, although public grocers have merit in some circumstances, the theory underlying Mamdani’s specific plan is not merely unproven but incoherent.Grocery socialism makes more sense for small-town RepublicansPublic grocery stores have historically aimed to solve a problem that New York City does not have — a total absence of private supermarkets.In 2018, the small town of Baldwin, Florida lost its only grocer. With only 1,600 residents — and a median income of $44,271 — the community no longer generated enough business to be worth the local IGA’s while. And no other national chain rushed in to fill the gap. So, the municipality opened its own grocery store, the Baldwin Market.This attracted national media attention. And not without reason. A deeply conservative small-town trying its hand at socialism was a fun story. And it turned out that Baldwin wasn’t an aberration: Other aging rural communities in red America had turned to government grocers once private supermarkets had left them in the lurch.Progressive policy thinkers took inspiration from these examples. In the ensuing years, proposals for using public grocery stores to combat urban food deserts — impoverished neighborhoods without convenient and affordable supermarkets — began to circulate. The merits of such plans can be debated. But their logic was straightforward: Where the market fails to provide residents with healthy food options, the government should step in. When post-COVID inflation sowed outrage over food prices, however, some on the left reconceived the purpose of public supermarkets: In their telling, such stores weren’t merely a means of eliminating food deserts, but also a way to make groceries more affordable.Mamdani’s plan is principally animated by the latter goal. With more than 1,100 grocery stores and 10,000 bodegas, most of New York City is well-provisioned by private food vendors. And although parts of the municipality are under-served, the mayor is not actually concentrating his stores in such areas; his planned East Harlem location lies just blocks from an Aldi, Costco, and many other grocers. In a report detailing its policy, the mayor’s office makes clear that its primary aim is to drive down New Yorkers’ food bills. Yet there’s little reason to think that public grocery stores are a cost-effective way to do that.New York City probably won’t provide groceries more efficiently than CostcoWithout question, a government store can make groceries more affordable for its own customers: All it has to do is charge below-market prices.And yet, if that store manages this feat by operating at a loss, then its shoppers’ savings will come at the broader city’s expense.That might not be too troubling, if one pictures rich taxpayers footing the bill. But for a city like New York — which faces a structural budget deficit — revenue is a scarce resource. A tax dollar spent on public grocery stores is one that can’t be spent on nutritional assistance for low-income people. And all else equal, the latter will do more to enhance affordability: If you have a limited pool of food subsidies — and want to minimize the number of New Yorkers who can’t afford groceries — then you should spend your funds on the poor, not on whoever happens to show up at your city-owned store. Thus, for Mamdani’s supermarkets to be cost-effective, they can’t just subsidize low prices with taxpayer money. Rather, they need to deliver groceries more efficiently than private retailers do.Public ownership can unlock efficiencies in certain contexts. For example, America’s private health insurance system generates massive administrative redundancies. By one estimate, if the US replaced its sprawling insurance industry with a single government payer, it could cut our health system’s annual administrative costs by $500 billion. In other words, a Medicare For All program could theoretically provide more healthcare-per-dollar than the current system does, by eliminating excess bureaucracy.But there are no comparable inefficiencies in the grocery sector. True, a government retailer could generate some savings by declining to take a profit. But margins in the industry are slim; the average profit rate among food retailers was just 2.1 percent in 2025. Therefore, Mamdani’s stores can’t finance 30 percent discounts merely by dispensing with shareholder returns. Meanwhile, the city actually wants its stores to be less cost-efficient than private grocers in some respects. According to its policy brief, the government grocers will pay their workers higher wages than most retailers and may also favor “local and regional suppliers,” rather than automatically contracting with whichever food producers offer the best rate. The city suggests that its stores will have some cost advantages: Unlike private competitors, they will pay no rent or property taxes on their facilities. But these are merely additional subsidies, not actual efficiencies: By providing free real estate to its grocers, the city is forgoing revenue that it could otherwise collect and spend on nutritional assistance or other public goods. It is not yet clear how much money the city is prepared to lose each year on these stores. If Mamdani’s celebrity — and heavily advertised bargains — lure large masses of people to his markets, their steeply discounted goods will quickly sell out. In that circumstance, to avoid long stretches with empty shelves, or some complex rationing system, the city would need to rapidly restock money-losing items, compounding the stores’ operating losses. In theory, there is one way that government stores could benefit consumers throughout a city without being especially efficient enterprises in themselves: They could force other retailers to cut prices by accepting lower profits or discovering new efficiencies. But with grocery margins already thin, squeezing private markets further could lead to closures, thereby reducing shoppers’ options. Further, Mamdani himself insists that his stores will go out of their way to avoid harming private competitors (which, in New York, consist primarily of the sorts of small businesses that Mamdani has promised to help). In any case, five stores won’t substantially impact pricing citywide. And so long as each government grocer operates at a loss, scaling up the program will only deepen its costs — and thus, the tradeoff between funding public supermarkets and anti-hunger programs.Aldi for allAt present, Mamdani’s grocery store experiment looks fairly cheap. The city estimates the stores will require $70 million in capital costs. As already noted, it’s unclear precisely how large each store’s annual operating budget will be. But even if each supermarket loses many millions each year, it still won’t make that big a difference, in the context of the city’s $125 billion budget.Still, the opportunity costs of Mamdani’s policy are real. New York City currently plans to spend $3.1 million next year on a program called Get The Good Stuff (GTGS), which essentially gives SNAP recipients up to $10 off each time they purchase fruits and vegetables from 25 participating grocery stores. With the money slated for its public supermarkets, New York could dramatically expand the program, while also investing more money into its food banks. Alternatively, the city could modestly increase cash transfers to its lowest-income residents. To be sure, none of that would offer much benefit to middle-class shoppers. And the mayor is quite reasonably concerned with increasing grocery affordability for the typical New Yorker. But the city can advance that aim — while actually increasing its revenue — by easing zoning and permitting rules that currently make it difficult for large, low-cost retailers like Costco and Walmart to operate in many parts of the city. Happily, to Mamdani’s great credit, his administration’s paper on public grocery stores does briefly mention the need for permitting reforms.Maybe public grocery stores are an end in themselvesAll this said, there may still be a reasonable case for Mamdani’s stores or others like them. For example, a city’s residents might come to see such retailers as a kind of attraction, public amenity, or community space, akin to a park or library.Further, public grocers could theoretically increase the public’s faith in the government. While the grocers are unlikely to be efficient in reality, they may appear to be. After all, their low prices will be far more visible to consumers than their operating costs. If Americans come to associate the public sector with cheap, ostensibly well-run supermarkets — rather than dreary DMV lines — that could aid the left’s broader efforts to expand the government’s remit. (Although, if the public grocers end up being characterized by overcrowding and empty shelves, the policy could further erode Americans’ confidence in the public sector.)As a means of maximizing affordability, however, Mamdani’s program makes little sense. It will mostly just transfer income from the city’s broad population to the small subset of New Yorkers who happen to live near — or work at — one of its five stores.Where private markets fail to provide any grocery options, public stores may be the best way for municipalities to meet their residents’ nutritional needs. But in other contexts, governments can make a bigger difference by simply putting more money in poor people’s pockets.