New York City's government grocery stores are a disaster waiting to happen
Government-run grocery stores claiming to offer a 30% discount below typical retail prices will lead to empty shelves and demands for more money to be spent on the self-inflicted problem.
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 walked through the economics of the Democratic Socialist's plan on Tuesday's episode of The Ezra Levant Show.
The first problem is the math, given grocery store margins run at about 1-2% and meaning there is no 30% fat to cut.
"Why didn't the boys at Walmart think of that first?" Ezra asked. The answer is in Mamdani's own policy document, which Ezra read in full. The city will provide free real estate, cover rent and property taxes, fund the initial buildout, and then offer additional subsidies to push prices below cost.
"The taxpayer will fund the gap," Ezra said. "That's how you get 30% cheaper food. Someone else pays for it."
The second problem is a matter of basic economics.
Price, Ezra explained, is how markets ration scarce goods against unlimited demand. Remove the price signal and rationing happens another way — lineups, sellouts, insider skimming, and resellers.
He pointed to Boris Yeltsin's famous unscheduled stop at an American grocery store in 1989, where the sheer abundance and absence of lineups was a genuine shock to a man who had lived his entire life under Soviet central planning.
"He said even the Supreme Leader of the Soviet Union didn't have such variety and choice," Ezra said. "His aides later said it was the final light bulb moment where he abandoned Communism." That same grocery store model is what Mamdani is proposing to replace.
The third problem is precedent.
Ezra played footage from Kansas City, Missouri, where a city-subsidized grocery store — launched with similar promises and millions in public investment — was filmed last year with 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," a local community leader said in the footage. "I can tell you today it's damn near dead." The city's response was to say it would support "long-term viability based on normal revenues."
Ezra also pointed to the competitive damage the program will do to the thousands of independent bodegas — corner stores run largely by new immigrants — that make up much of New York's neighbourhood food retail. "The taxpaying bodega owner is financing his own competition," he remarked.
Mamdani's first store is not expected to open until late 2029. The announced capital cost is already $70 million — a figure Ezra said will inevitably double.
"Everything's going to be over budget," he said, and the results will be just as poor as the Kansas City grocery store.
"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. More central planning."
Wishing the city's residents good luck in dealing with Mayor Mamdani's plan, Ezra said "New Yorkers are about to get a billion-dollar education in supply and demand."
"New Yorkers are about to get a billion-dollar education in supply and demand," Ezra said. "Good luck to you guys."
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Ezra Levant
Rebel Commander
Ezra Levant is the founder and owner of Rebel News and the host of The Ezra Levant Show. He is the author of multiple best-selling books, including Ethical Oil, The Libranos, China Virus, and most recently, Trudeau's Secret Plan.
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