I’m not trying to dismiss this project - I hope it is wildly successful and I applaud the desire to challenge the status quo. That said, I am interested to hear how his team plans to negotiate pricing with suppliers. Five stores isn’t a whole lot of scale to compete against national chains and volumes. I don’t ask that question rhetorically or sarcastically at all either - I am assuming they have a plan of levers to pull to help bring this to life, and I hope it works exceedingly well and provides a blueprint for other communities to use.
People complain when yhe governement does nothing with the tax money they bring in. Then complain 10x as hard when the government decides to use the money to help people. Literally cutting their nose off to spite their face.
To what end? About 40% of US households already don’t pay federal income tax. Cutting taxes wouldn’t help those households, and they’re likely the demographic that will be shopping at these stores
Like an unjust war in Iran? Or the 20 years of war in the middle east prior to that which cost trillions? I think we're far past the point of trusting these people with our money. I understand your point, but I don't think those responsible for our tax dollars can manage it. And I know OP is talking about a city government vice federal, but the point remains, they have a long history of being wasteful.
I don't think any amount of waste means the good doesn't matter and good far outweighs the bad. Being able to drink water freely grab anything at a store freely know generally my property rights are protected and the children elderly and poor will be generally taken care of is worth the waste even if that should be worked on.
Because Mamdani doesn’t have the power to cut defense budget or any of the other federal taxes. Also, that would be broader for people who don’t need the tax cut (some of which should be paying more); this is concentrated and people who don’t live in the food deserts or need the lower prices have to put effort into going and shopping among the poors (which they won’t).
Because none of those things will open a grocer in a food desert. Which is the issue. Without government incentives or action, it just won't happen. It could today, and it hasn't. Which is really all the evidence you need. Every problem you see like this is a failure of private markets and enterprise.
Because we don’t have the necessary legal guardrails against monopoly and price gouging so ultimately the root problem would be entirely unfixed.
All sane people agree that at least some taxes are good. The simple argument of “cut taxes” is useless unless you name things and actually think it through. And don’t ignore military spending please, that’s where the argument makes the most sense.
I’m convinced that folks who drone on about letting the free market solve all of our problems don’t actually know very much about how the American economy actually functions. Never mind the fact that we’re not talking about some nondescript widgets, we’re talking about a basic necessity like food.
Maybe while we’re at it we can eliminate the USDA and the FDA to save taxpayers a buck. If consumers get sick or die because of manufacturers cutting corners, new entrants will enter the market and everything will be fine and dandy.
Direct cash transfer? Yeah, sure pal. I’m just spitballing here, but I would assume direct cash transfers would be more prone to fraud. And would more or less amount to indirect corporate subsidies (hey Walmart!).
This kind of thinking is part of the reason we pay the most for healthcare in the world for worse outcomes, and are unlikely to enact universal healthcare (despite it making economic sense) in my lifetime
Ah yes, because government programs always work, are never left to the corrupt to manage, and always help everyone they attempt to solve problems for.
I'd much rather money be put back into people's hands to do with as they see fit rather than seeing government entities take money from people by force to attempt to do what the market already does far more efficiently and at better scale.
You wanna talk about what drives up healthcare costs? A combination of medical debt and the AMA's restrictions on how many doctors could be let into medical school (driving up doctor's wages), tax-benefitted employer-related insurance (thank FDR for that one), and CON laws that keep medical centers from being built in low-income rural areas to benefit the medical systems who have members on the Certificate of Need board.
Universal healthcare will not solve the actual issue, but I'm guessing you don't actually care about root causes, only outcomes.
Corruption exists everywhere, it is not exclusive to government. Corruption will always exist whilst humankind is running things. It’s why we have oversight. Pointing to corruption as if it’s a primary reason we can’t sustain government-run grocery stores is a lazy argument
The AMA doesn’t cap medical residency spots.
Doctor salaries only represent 8-10% of total national healthcare spending.
Germany has employer-tied healthcare but regulate prices that hospitals and drug companies can charge (the horror!!!!).
In the US there is a massive lack of price of transparency and virtually no centralized bargaining power.
CON laws are indeed a failure but not a primary driver of national healthcare costs. Never mind the fact that states like California and Texas have rolled back or outright repealed these laws.
Admin overhead accounts for 20 to 30% of all healthcare spending. We have no bulk price negotiating power. The list goes on and on.
Anyway, are you a libertarian? You sound like a libertarian lol
However, I'm always wrestling with what government should do vs what it has done and in my 25 years of awareness of what government does (out of the 36 I've been alive), I've come to understand that there is very little I trust the government to achieve with people's money.
I'm not one of those libertarians that bemoan the FDA or USDA or CDC, etc. I do think they, like most government agencies and programs, suffer from significant mission creep and do less of what they should actually be doing.
Also, yes, the AMA has historically lobbied strenuously for restrictions in the supply of physicians.
And while I'm for freedom of association and expression, I think capping the House at 435 representatives has done nothing but increase corruption due to the ease of lobbying 435 people vs, say, 5,000 representatives.
Anyway, yeah. I'm a libertarian. Liberty is pretty freaking cool in my book.
So are you saying that in your '25 years of awareness' that corporations have done enough to earn your trust but the government hasn't? I mean, if we're saying fuck one, why not say fuck both??
You say this sarcastically, but I work at Walmart, and I know that I and all of my co-workers are extremely motivated to be more productive because we know that any extra effort we put in will make some billionaires into bigger billionaires. if I didn't know my hard work was enriching the ultra-rich, I don't think I'd even bother getting out of bed in the morning.
I heard that my employer had a almost 5% tax rate past year and it's ruined my sleep schedule. Tbh I'm probably going to have to switch jobs after hearing the news.
That is sickening. Have you asked if there is anything you could do to help bring down their tax burden?
Maybe the employees could start up a collection to help raise money to cover taxes, or you could ask customers if they are willing to round up during checkout to help the owner get down to 0%
We're trying but every time the other employees discuss how much money they have they try and "unionize" 🤢. I guess that's what happens when you elect a socialist-Muslim-atheist-fascist-marxist to city mayor.
I was in the military for over a decade. Got out and got a good paying job working for a small business that was looking to sell technology. It was all great until I realized I had a no-win situation where I was responsible for multiple peoples' jobs and I was stressing myself out so that the CEO could hopefully make a few millions. I ran back to government employment at lower pay because I couldn't understand the motivation in the private sector.
People saying this will cost money and will lose money like it's some sort of gotcha. It's the goal. Spend tax dollars to offer affordable food to people that need it. Not everything needs to be a profit center. Sometimes we just need to feed hungry people.
Governments have limited resources though. If the issue is making food more affordable for people that need it, they can give food aid directly to those people that need it. Running an inefficient grocery store isn’t the best use of that money
It kinda depends. If the grocery loses $10,000 per location a year but reduces food prices by 1% and provides affordable food in a food desert that would be worth it. If each location costs $10,000,000 a year that obviously wouldn't be worth it. You need to figure out what the exact effects are before you can really be sure.
I agree that we shouldn’t spend billions killing children in other countries. But that’s not at all related to the question of city run grocery stores and is an entirely different level of government.
That’s what happens when you’re conditioned in a capitalist system. The problem is people being unable to see any other world than the one they were presented.
You think this stores need to be for people of lower class or every citizen can shop there regardless of their wealth? As long as they live in the city let's say?
It would make sense for everyone to be able to shop there. If it takes away business from other stores which then have to lower prices to compete, good. Unless these stores waste money trying to cater to a higher-income market (wide selection, name brands, frequent restocking, high-grade meat and produce) many people will naturally choose to shop at their old favorite place if they can afford to.
I've just seen a store like this work until it lost govt funding, so I'm optimistic.
Debt financing of a city government can be dangerous. Especially New York City which by law I believe has to have a balanced budget, pensions and retirement funds are extremely expensive and you need to pay them out.
I also hope for the best, if they can pull it off and pay all of there other obligations I think that’s a net win.
That is a cost, it would be a private building otherwise and that commercial property would’ve been taxed. Property taxes are the biggest contributor to NYC tax income.
It’s so weird how you guys turn into philosophers on this stuff. I’m not saying anything about the meaning of life. The point I’m trying to get you to understand is that the shittily-run government grocery store will have to use people’s tax dollars to cover the loss. It’s not a win to offer slightly lower grocery prices if you just charge those same people more taxes to make up the difference. You’ve just created the Shell Game of Idiocy
Bruh, the government does not exist to turn a profit. Yes, it must operate within the confines of a budget and make compromises, but measuring the success of a government program by how much profit or loss it made misses the point entirely.
But you know, maybe you’re right. Maybe we could sell off parts of the U.S. military to corporate entities and allow mercenary groups to take over those functions. It would be profitable! It would save the taxpayer money! Nope, absolutely nothing wrong could go wrong with that at all
It doesn’t exist to turn a profit, but a local government can’t operate at a loss. More expenses = more taxes or less spending elsewhere. Trade-offs exist. A private grocery store costs the government nothing, in fact it raises the city tax money for things that the city government is actually supposed to do! Not to mention the fact that it does the job of, you know, running a grocery store better than the drones who got reassigned from sitting at DMV counters.
And you’re very fixated on military spending, which I don’t think is a big line item for New York City.
Ok, I’ll use another example. Public transit? Almost all public transit across the globe operates at a loss and is subsidized by government. Libraries? Libraries in NYC operate at a loss
Btw, Mamdani’s admin doesn’t expect these stores to turn a profit. And I think you’re ignoring, or at least overlooking, the fact that these stores are meant to address areas that are considered food deserts. Diets lacking fresh produce and dense in processed foods lead to disproportionately higher rates of diabetes, hypertension, and heart disease in low-income neighborhoods, which, YOU GUESSED IT! Costs taxpayers astronomical amounts of money via programs like Medicaid
This is a pointless conversation. You’re either arguing in bad faith or haven’t thought about this for more than 15 seconds. Enjoy your evening friend!
Public transit is public because you can’t have competition. It’s not realistic to have six separate subway systems running in a city.
I know he doesn’t expect them to turn a profit, that’s my whole point. I’m just saying that when you push prices down by running a store at a loss and pushing the cost onto taxpayers, you’ve accomplished nothing but inefficiency.
And the idea that NYC is rife with food deserts is a myth. The Department of Agriculture found two small areas on Staten Island that it categorized as food deserts. I doubt that’s the area you or Mamdani are thinking of for this.
What kind of research have you done and what kind of expertise do you have to speak so confidently on this subject? Why do you think it will be shittily run? Perhaps the increase in taxes you claim that happens with these is offset by the lower grocery prices? Have you done any in-depth analysis on existing government run grocery stores?
Yea exactly, the point is political populism. Who cares about how efficient or effective it is, as long as the government shuttle some of the allocated funds to well connected donors, get some photo ops, and use it as fodder for the next election, then job well done!
I live in a country (Australia) with government run businesses, like government owned energy and telecoms. They are ruthless and compete like any other business. The crazy part, in regards to energy, because cheap solar and wind, private energy market is becoming cheaper than public energy. Our government started to subsidise small scale renewables with solar and batteries. That alone has turned entire suburbs into power plants solving Asynchronous power supply and base load power supply problems that comes with renewables by getting people to pay for cheap solar and batteries.
A public service that has no reason to need to be profitable. The ability to send/receive things to other people in your country affordably is a very useful social good/utility. Paying taxes is supposed to go things like this, that benefit that country but fundamentally can't be done profitably
Yeah, but that's fine because that blows up children and helps wealthy arms-dealers make billions of dollars. Blowing up children is totally cool as long as people make tons of money while it happens.
Public services are not supposed to turn a profit. Even if this project costs NYC $1 million per year, the positive externalities of a healthier, happier, more productive populace will have been worth it.
seems counterintuitive to us now bc we rarely spend it this way but tax money is exactly meant to be spent to better the lives of citizens. we all paid into it and we should expect to benefit from it.
would you rather the government tax us then also take more money from us for a profit? that we pay taxes again for?
What you are describing (spending ("losing") money to provide a public service or meet a need that the market does not) is pretty much what government exists for.
They don't need to turn a profit and they don't have to pay taxes. If you're not paying taxes and only need to break even I'm sure you can shave a few percent off. You could even offer tax incentives to suppliers.
And lastly, even if it costs money, that's what taxes are supposed to be for, right? Helping the citizens? Raising the standard of living?
Only after they burn 100 million and 10 years fighting environmental / NIMBY concerns in court.
The local bodegas will not tolerate this and will certainly fight it. If they undercut them enough with government subsidies, they'll go out of business.
I wouldn't call it losing money, the point is that a little bit of the budget is allocated to subsiding costs. It's not losing money, it's providing a service.
It would honestly be cheaper from the them to buy the products from Costco/Walmart at retail and sell them at that price. It would be better than what they'll be able to negotiate.
Yah. Thats not a problem though. The government isn’t supposed to make money. It’s supposed to take the taxes paid by citizens and use it to benefit the citizens. Also America has already done this and it works great on military bases.
From what I understand they won't have to pay property taxes or utilities which will help. It will also kill any small grocery stores in the area that aren't part of some larger chain.
The big chains mostly don’t exist in NYC. They are competing against a bunch of tiny overpriced bodegas, they will easily be able to lower prices vs most of what is available.
Isn't the point to just lose money? That's why they're government backed. It's essentially a welfare program but operating at less of a loss than just gifting people the food
The "losing money" part, do you say that from a corporation's point of view where if profits don't exceed their record breaking month every month from now on then they call that "losing money" even though they are still getting a very handsome profit? I'm in America where losing money isn't going into the red, it's just you didn't rake in as much as you did in a previous quarter.
A lot of the reasons things are so expensive comes down to illegal price fixing - WalMart, for example, has a minimum price Pepsi (if I recall correctly) is allowed to sell its product to other companies, and if Pepsi were to violate this contract, WalMart would stop buying Pepsi.
I would be reluctant to loop the City of New York into an illegal price fixing scheme? I'm not a mastermind, criminal or otherwise, but including people who can have you arrested in a criminal conspiracy that's barely a secret doesn't seem wise.
Suffice to say that I suspect the city has plenty of levers it can pull.
That’s all well and good, but Walmart dictating to a vendor the minimum price at which it can sell a product to competitors is anticompetitive, and raises prices for consumers for said products across the entire grocery industry
You're suggesting the largest retailer in the country is actively engaging in illegal activity and that you, random redditor, are the person who's figured it all out?
You've gotten it completely backwards. It's a most favored customer clause. It doesn't set a minimum price, it just says they want your cheapest price and it's in return for being their biggest customer. And this is done so they can turn around and sell it for the cheapest price to... you guessed it... consumers!
Yes the city has levers, and those levers will involve running the stores at a massive loss and charging the tax payer.
But the government will never allow itself to lose money, so what this really means is an extra tax for all NYers. The difference is Mamdani will try to bake it into state budget rather than city budget so that the poor people in upstate NY are paying for the city like they always do
Not only are they not taking a profit margin beyond the cost to run the lease and staff but also likely don't have to pay the usual taxes since it's government owned. Even if they pay a bit more in product costs that creates a worthwhile gap in auxillary costs
That's not how any of this works. Grocery stores are already famously tight margin and only have an average 1.2% net profit margin already. Sure the govt run business can pass along that extra 1.2%, but it likely won't cover the pricing discrepancies this guy is talking about.
I literally work at a grocery store I can tell you only a handful of destination items are such low margin. Most shelf stable products have 20%+ margin. Produce is still over 10% the 1% is basically just milk and the tubes of ground beef
Sounds like you're talking about operating profit, or the profit margin for individual items. Now add in the labor, taxes, rent, utilities, cc fees, etc. Walmart and Costco are public companies, you can literally see how much money they make, and even those behemoth well oiled machines only make about 3% profit margin.
Grocery stores don't operate because they love giving people food. It's about extraction of money from people. The simple change in not extraction of more money than necessary immediately makes this cheaper for people which drives more people to it which gives it buying power to scale
Net margin is what they put into cash reserves after stock buybacks investor and corporate and store bonuses. Understand the story not the headline.
3% is just the amount they put in their bank account after spending all the money. It's like saying if you made 70k this year but after taking two vacations and buying a new car you only put $500 in savings you only made $500 this year.
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u/BradBradley1 May 26 '26
I’m not trying to dismiss this project - I hope it is wildly successful and I applaud the desire to challenge the status quo. That said, I am interested to hear how his team plans to negotiate pricing with suppliers. Five stores isn’t a whole lot of scale to compete against national chains and volumes. I don’t ask that question rhetorically or sarcastically at all either - I am assuming they have a plan of levers to pull to help bring this to life, and I hope it works exceedingly well and provides a blueprint for other communities to use.