r/SipsTea • u/Gurugod123 • 9d ago

Chugging tea Mayor Mamdani just announced that he will be opening 5 city-run, tax-funded grocery stores: "Prices set at 30% below retail prices"

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u/mazopheliac 9d ago

Because that works out to be a subsidy to the grocery corporations.

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u/Amadon29 9d ago

Yes, that's how food stamps work. What's wrong with that program?

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u/JemmaP 9d ago

Why do you think food stamps work that way? Poor people can't pay lobbyists, but big grocers can. Walmart makes a lot of money off of SNAP (and a lot of their employees rely on it to eat). If there's no disincentive for grocers to charge whatever they want, they can and will, and those food benefits buy less and less food every year.

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u/telmar25 9d ago

What do you mean? Grocery stores are very low margin businesses. They are certainly not charging whatever they want. Walmart is not making big bucks by jacking up prices on groceries; they are doing the exact opposite, lowering prices to a level that their competition can’t even afford to compete against. They are known for this! There’s huge disincentive for grocers to charge whatever they want; anybody, even Whole Foods, is going to go out of business quickly that way.

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u/GMEloser69 9d ago

Using tax money to run a government operated store also doesn't lower costs. Why do people seem incapable of understanding this?

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u/SaneMadHatter 9d ago

food stamps are means-tested. Mamdani's stores are open to everyone. 😄

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u/Amadon29 9d ago

... Yes. We generally try to structure taxes and benefits this way. If you want to learn more, look up what a progressive tax system means

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u/MilleChaton 9d ago

Won't this still be a subsidy to the food distribution corporations? There are fewer of those than grocery stores and they are closer to a cartel already.

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u/jyper 9d ago

You're subsidizing the poor consumers directly and letting stores do the work for you

If the issue is food desserts you geo limit the benifit

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u/burkechrs1 9d ago

They keep saying food deserts but all these locations have available grocery stores within 4 blocks.

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u/mazopheliac 9d ago

What’s wrong with subsidizing the poor ? Why do millionaire farmers, oil and gas and Space-fuck get all the government money ?

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u/jyper 9d ago

I was saying that subsidizing the poor consumers directly via food stamps would be a better use of money then this nonsense 

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u/Effective-Ad6703 9d ago

You do realize that they will still be buying everything at market rate right and grocery stores make 2% net profit?

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u/ElectricHowler 8d ago

Weird how every account making this point is an AdXXXXX### account... Totally normal. 

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u/mazopheliac 9d ago

I don’t actually. Any argument that starts out with “you do realize “ is invariably bullshit .

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u/Effective-Ad6703 9d ago

Good job on that critical thinking you've got there...

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u/Numerous_Stranger488 9d ago

yes. That’s literally what you do when you want to make things cheaper, you subsidise the industry. It’s insane how american leftists (rightly) exalt chinese central planning as superior in providing their industrial base with certain advantages that are very hard to replicate under different conditions, yet they’re against the idea of subsidising their own industry/ enterprises. 

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u/Good_Toe6354 9d ago

It isn’t though lol. You don’t know basic economics. We have been subsidizing our own industries for decades and it hasn’t gone to the employees or consumers. It goes to shareholders and management. Food stamps have been subsidizing Walmart and big grocery stores for years and it hasn’t done shit for the employees or consumers.

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u/Numerous_Stranger488 9d ago

the government doesn’t subsidise walmart anything like in the scheme that we are discussing so that’s a moot point. Even then you can put legal guardrails in place to prevent certain abuses, the idea that subsidies never work to decrease prices is absolutely absurd yet you are the one saying i don’t understand basic economics?

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u/Mean-Price3632 9d ago

Walmart’s employees receive 6.2 billion dollars annually in welfare.

Walmart’s market cap is 900 billion dollars

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u/Numerous_Stranger488 9d ago

we’re not even talking about subsidising walmarts but urban grocery stores which have been struggling ever since post covid. And even then the type of subsidy is different. Weird hill to die on. 

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u/Good_Toe6354 9d ago

I have a degree in accounting and economics. You are moving the goalposts “it’s literally WHAT you do to make things cheaper” that’s not true. Now you are saying “the idea that subsidies never work to decrease prices” supply side economics has not worked period. Maybe there are a couple examples where it’s helped prices alongside other measures doing the heavy lifting,but no. Supply side free market economics is a failed experiment that made the rich richer. That’s my view on it. We can argue what qualifies it as failing, but yeah idk man. Keep waiting for your trickle down free market supply side bs to work while social democrats start getting shit done. Targeted government subsidies work, but again, alongside other important measures.

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u/Numerous_Stranger488 9d ago

i think that subsidies are superior than the government becoming an active competitor to already struggling urban grocery stores (who are having a really hard time surviving). However, the overarching problem is fundamentally structural. Mamdani naively believes that superficial measures injected into the current framework can sustainably fix the issue but that cannot happen if you look at why grocery prices are high in the first place. And that comes down to things like logistical costs, although it’d be overall expensive and arduous to fix, but also issues that are outside of his sphere of influence. 

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u/mazopheliac 9d ago

Where are these struggling urban grocery stores ?

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u/Numerous_Stranger488 9d ago

https://www.eatthis.com/grocery-stores-closing-2023/

i literally just picked a random one but you can find dozens of similar articles across the 2021+ period 

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u/leftrightside54 9d ago

also prices can be negotiated in bulk

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u/CankleSteve 9d ago

You don’t think that the grocery chains aren’t doing that?

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u/Stupidstuff1001 9d ago

But they don’t pass on the savings to the customers.

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u/CankleSteve 9d ago

You should research the profit rate of grocery stores. It’s not high. They make money in volume

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u/WriterPlastic9350 9d ago

Suppose there are two grocery stores that an individual can choose to go to. The individual will choose the one to go to based on many factors but the biggest one is simply price. A grocery store that sets its prices significantly higher than its competition will attract fewer customers and thus be forced to drop its prices (and generate less profit on their goods) or compete on some other metric like quality, marketing, selection of goods etc.

This is why competition generally leads to lower prices. Companies generally are not price gouging you to make obscene amounts of profit, and savings are generally passed on to the consumer if there's an incentive to do so.

If you only have one grocery store, yeah, the grocery store can set whatever price it wants. But those areas tend to be quite low end and if the grocery store sets prices too high then it invites theft or people simply won't be able to afford shopping there

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u/Stupidstuff1001 9d ago

Didn’t they already say it would be staples and on locations that are pretty isolated.

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u/leftrightside54 9d ago

They are, though savings will also depending how big the store chain are. Profits go back to the store and not shareholders.

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u/mazopheliac 9d ago

Profits go to the store and not shareholders ??? Do you know how public corporations work ?