City-run stores in Kansas and Florida have a spotty track record.
New York City mayoral candidate Zohran Mamdani has promised to open government-run grocery stores, citing the alleged success of other state-run stores to defend his plan against allegations that it represents a misguided expansion of the role of government.
According to his platform, Mamdani intends to “create a network of city-owned grocery stores focused on keeping prices low, not making a profit.” It says, “9 in 10 New Yorkers say the cost of groceries is rising faster than their income,” so “only the very wealthiest aren’t feeling squeezed at the register.”
Where local governments have entered the grocery business, mostly in rural areas, things have not worked out as well for the consumer as Mamdani claims.
According to No Kid Hungry, 86 percent of New Yorkers said food prices are outpacing their income in 2025, while 85 percent said the same in 2024. Food prices rose dramatically during and after the COVID-19 pandemic, but their monthly increases now resemble the historical average, according to the USDA.
Mamdami casts the recent price increases as driven by greedy corporations, but much of the increase is actually the result of rapid inflation. Grocery stores are a notoriously low-margin business, with the average store making just a 1.6 percent profit, according to the Food Industry Association.
Mamdani believes government-managed stores will “reduce overhead and pass on savings to shoppers” because they do not have to pay rent or property taxes. They “will buy and sell at wholesale prices, centralize warehousing and distribution, and partner with local neighborhoods on products and sourcing.”
If Mamdani follows through with this plan, NYC will join the short list of places in the U.S. that have tried.
A city-operated store in Baldwin, Florida closed in 2024 after five years, because it consistently failed to reach the break-even point.
A government-run store in Erie, Kansas also operated at a loss and is now leased to private operators, though the building is still owned by the city. The Garden of Eden in Little River, Kansas similarly leases a city-owned building.
Dave Trabert, CEO of the Kansas Policy Institute, said, “The government-subsidized grocery stores in the tiny towns of Erie and St. Paul (population 1,035 and 616, respectively) are hardly proof that the concept is feasible. They have limited choices and only exist because the private owners closed money-losing stores, and the nearest options were many miles away.”
The St. Paul Supermarket, which has been under city control for seventeen years, has been a rare success. However, the store’s manager told the Wall Street Journal last year that the business supports itself and the city “really doesn’t have to do anything—they just oversee it.” The dynamics are different, as St. Paul had been without a grocery store for two decades, but NYC has more stores per capita than industry experts generally recommend.
Additionally, Chicago mayor Brandon Johnson proposed a pilot program to create city-run grocery stores during his campaign, but the city did not apply for state funds that would have made it possible.
Jarrett Dieterle, a legal policy fellow at the Manhattan Institute, pointed to government-run liquor stores as evidence that taking over grocery stores would be a mistake. State-operated liquor shops “have proven to be notoriously slow and inept at fulfilling orders in a timely manner,” while “recent scandals at Virginia ABC and Oregon’s OLLC have also shown the potential for malfeasance among government employees involved in retail-related roles.”
Currently, there are 17 alcoholic beverage control states, and the cost of liquor is generally higher in these places. Dieterle said this because the stores are often staffed by “unionized government employees, so they are “bloated and inefficient from a managerial and budgetary perspective.”
Mamdani’s campaign did not respond to a request for comment from NR.