New York City's $70 million plan to open government-run grocery stores offering steep discounts has drawn sharp criticism from one of the city's longest-standing grocery executives, who says the mayor is pitting City Hall against its own taxpayers.
John Catsimatidis, the CEO of Gristedes, a New York City grocery chain, told Fox News Digital that Mayor Zohran Mamdani's plan to open five city-run grocery stores, one in each borough, will not feed the hungry. It will, he warned, undercut the bodegas and supermarkets already operating in those neighborhoods, businesses that pay their own rent, cover their own property taxes, and survive on razor-thin margins.
Mamdani announced the plan in July, setting a $70 million capital budget and promising a 30% discount on a "core basket of everyday groceries" that includes meat, seafood, and fresh produce. The first location, in the Hunts Point section of the Bronx, is set to open in late 2027. The mayor wants all five stores running before his term ends in 2030.
The city has vowed to cover property taxes and rental costs for each location and is currently accepting applications from private operators to manage the stores. That subsidy structure is the heart of Catsimatidis's complaint.
Catsimatidis laid out the math plainly. Average grocery store profit margins run between 1% and 3%. When the government wipes out two of a store's biggest fixed costs, rent and property taxes, the playing field is not level. It is tilted by design.
"The people that are going to run those five stores are not going to pay any [real estate taxes]. Not going to pay any rent. If I don't pay any rent or real estate taxes, I can bring down the cost of a product 20% across the board."
That 20% cost advantage, Catsimatidis argued, will come directly at the expense of existing store owners who do pay those costs, and who employ local workers, stock local shelves, and keep neighborhoods fed without a line item in the city budget.
His warning about the downstream damage was blunt. The stores the mayor says he wants to help are the ones most likely to suffer.
"The fact is the people [Mamdani] is going to hurt are the current bodegas or the current supermarkets in those neighborhoods. So it becomes a problem of 'for whom do the bells toll?'"
Mamdani's administration has faced a string of controversies beyond the grocery plan. An ethics complaint accused the mayor of using city resources to boost Democratic candidates, raising broader questions about how his office deploys public assets.
Catsimatidis pointed to another cost pressure that City Hall has done nothing to relieve. Manhattan's congestion pricing, enacted in January 2025, charges vehicles entering south of 61st Street. For grocery operators who depend on daily deliveries from vendors in New Jersey, Nassau County, Suffolk County, and the outer boroughs, that toll is passed straight through to the store, and then to the customer.
"If I want stuff delivered to us from vendors in New Jersey, and all these companies are in New Jersey, Nassau, Suffolk County, Brooklyn, Queens or the Bronx, and I say to them, 'I want you to deliver to [New York City],' they're going to charge me 10% more, or 15% more."
The result, Catsimatidis said, is visible on every commercial block in the city. Storefronts sit empty. Businesses that once anchored neighborhoods are gone.
"Congestion pricing is hurting the stores in Manhattan a great deal. If you go up and down the streets in New York City, half the stores are empty, which is horrible."
The Mamdani administration's own track record on fiscal accountability has drawn scrutiny on multiple fronts. The administration recently ducked a City Council hearing on a botched tax rollout, a pattern that does not inspire confidence in a $70 million grocery experiment.
Rather than building government-run competitors, Catsimatidis proposed a different approach, one that would use the city's existing tax structure to lower prices across the board. If the city wants cheaper eggs, he said, give every grocer a tax credit instead of subsidizing five handpicked locations.
"If you want me to lower the price of eggs, well maybe I'll lower the price of the eggs by a dollar a dozen. But maybe [the city] will give me a dollar a dozen credit toward my real estate taxes."
The idea is straightforward. Instead of spending $70 million to build five stores that compete with private businesses on terms no private business can match, use that money to reduce costs for the grocers who already serve every neighborhood in the city.
"If you want to lower the prices for all Americans, all New Yorkers, well let's do it right and lower it in all five boroughs."
Catsimatidis did not hold back about what the mayor's approach represents. He framed it as a fundamental question about the role of government in a free market.
"You're competing against your own citizens, and that's only done in socialist countries. Look at socialist countries, nobody's breaking down the walls to get in, but they're all breaking down the walls to get into the United States of America."
No one disputes that New York City has a food affordability problem. Nevin Cohen, director of the CUNY Urban Food Policy Institute, told Fox News Digital that 1.4 million New Yorkers are food insecure and that 20% of the city's residents depend on SNAP benefits or other federal food subsidies.
Mamdani framed his plan as a direct response to that crisis.
"Every week, New Yorkers walk into a grocery store hoping the prices haven't gone up again. A trip to the grocery store shouldn't spell dread for New Yorkers."
But Catsimatidis argued that five stores, one per borough, in a city of more than eight million people, are a public relations gesture, not a serious policy solution.
"The big picture is that five stores in five boroughs is only good for public relations, and it's not really going to help the hungry."
Cohen also noted that the city already operates a program called FRESH, which provides tax incentives and zoning incentives to encourage new supermarkets or the expansion of existing ones in underserved neighborhoods. That program works with the private sector rather than against it. Mamdani's plan does the opposite, it builds a parallel system that absorbs costs private operators must bear on their own.
The mayor's circle has drawn scrutiny on other fronts as well. A federal probe has examined a $100 million nonprofit fund allegedly tied to a Mamdani ally, and a housing adviser in the administration reportedly owes $108,000 in unpaid rent while facing eviction, an irony not lost on critics of an administration that now wants to manage grocery stores.
Fox News Digital reached out to Mamdani's administration for comment. The article did not indicate whether the administration responded.
The unanswered questions pile up. Who are the private operators applying to run these stores, and how will they be selected? What happens to the bodegas and small supermarkets in Hunts Point and the other four neighborhoods when a tax-exempt, rent-free competitor opens next door? And if the FRESH program already exists to incentivize grocery access in underserved areas, why is the city spending $70 million to build something that duplicates, and undermines, a tool it already has?
Catsimatidis also flagged a broader competitive threat. Online retailers and out-of-city businesses that ship products into New York without bearing the overhead of a physical storefront already put local operators at a disadvantage. Adding a government-subsidized competitor to that mix only accelerates the squeeze.
"The businesses that are doing business outside New York City are just shipping [products] in by mail, they can afford to be cheaper. And you know what happens? They put the stores and the businesses inside New York City out of business."
The pattern is familiar. City Hall identifies a real problem, proposes a government-run solution that costs tens of millions, and asks taxpayers to fund a program that competes with the very businesses those taxpayers built. When the strategy is to help people by hurting the people who already serve them, it is worth asking who the plan is really designed to help, struggling families, or the politicians who want to be seen helping them.