New York City Mayor Zohran Mamdani has announced a city-owned grocery store program offering a “core basket” of essential items: fresh produce, meat, seafood, cheese, milk and bread. The plan is to sell the goods at 30% below typical retail prices once a month at five city-run locations.
Ezra Levant analyzed the economics behind Mayor Mamdani’s proposal on Tuesday. According to Levant, the first problem is math: grocery store margins typically run at about 1-2%, meaning there is no 30% margin to cut. The city will provide free real estate, cover rent and property taxes, fund initial construction, and then offer additional subsidies to push prices below cost. “The taxpayer will fund the gap,” Levant explained.
The second issue is basic economics. Price acts as a signal that ration scarce goods against unlimited demand. Removing price signals leads to lineups, sellouts, and insider skimming. Levant cited Boris Yeltsin’s famous stop at an American grocery store in 1989, where the abundance and absence of lines shocked him after his life under Soviet central planning. “He said even the Supreme Leader of the Soviet Union didn’t have such variety and choice,” Levant noted.
Levant also referenced a city-subsidized grocery store in Kansas City, Missouri, which launched with similar promises and millions in public investment but now has nearly empty shelves, a rotten smell at the entrance, and no hot food or deli. “There was a time this store was on life support,” said a local community leader in footage from last year. “I can tell you today it’s damn near dead.”
The program threatens independent bodegas — corner stores run largely by new immigrants that make up much of New York’s neighborhood food retail. Levant remarked: “The taxpaying bodega owner is financing his own competition.”
Mayor Mamdani’s first store isn’t expected to open until late 2029, with an announced capital cost of $70 million — a figure Levant said will likely double. “Everything’s going to be over budget,” he added.
“The shelves will be empty because they’re being priced for political reasons, not economic ones. And of course, the answer will be we just need more money,” Levant concluded. “New Yorkers are about to get a billion-dollar education in supply and demand.”
