Economist Peter Schiff, on Thursday, expressed concerns about New York City Mayor Zohran Mamdani’s plan to open government-owned stores to make food more affordable.
New York’s State-Run Grocers Will Hurt Private Sector Profit
In a post on X, Schiff said that the opening of five state-run grocery would hurt private-sector profit and reduce the efficiency of the stores. He wrote “profit margins are less than 2%. Without a profit motive government stores will be far less efficient, so without taxpayer subsidies, prices will be higher.”
Mamdani Plans to Open Five Grocery Stores
Addressing his first 100 days in office on Sunday, Mamdani announced a plan to build five city-owned grocery stores, one in each borough, to combat rising food costs. The first store is slated to launch in late 2027 with the remaining four rolling out by Jan.1, 2030. La Marqueta in East Harlem is the first location for the grocery-store initiative to be opened in 2029.
Since the pandemic, grocery prices have climbed up but has not really eased. Prices in New York City has risen nearly 66% between 2013 and 2023, far outpacing the national average.
The New York mayor said that he is aware that some hold the view that city-owned businesses do not work and that the government cannot compete with corporations. “My answer to them is simple: I look forward to the competition. May the most affordable grocery store win.”
Mamdani said prices at these stores would be fair, workers would be treated with dignity, and New Yorkers would be able to afford their groceries. “At our stores, eggs will be cheaper. Bread will be cheaper. Grocery shopping will no longer be an unsolvable equation,” said Mamdani.
Mamdani has set aside $70 million in capital funding to develop the five locations.
Photo Courtesy: lev radin on Shutterstock.com
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