New York's biggest supermarket owner just warned that Zohran Mamdani's $70 million grocery plan will destroy the businesses it claims to help.
He's seen this play before.
And the last American city that ran it doesn't want anyone looking too closely at what happened to their stores.
Kansas City Already Ran This Play
Kansas City, Missouri spent nearly a decade and $29 million in taxpayer money on the Sun Fresh Market – a government-backed grocery store meant to solve a food desert problem on the city's east side.
The shelves went empty.
The produce rotted.
Customer traffic collapsed from 14,000 shoppers a week to fewer than 4,000.
On August 12, 2025, a note appeared on the front door: the store was "unable to serve" the residents it was built for.
One year of losses: $885,000.
Final result: a tarp over the sign and a locked door.
That's the blueprint Zohran Mamdani just announced he wants to scale up – five times, across five boroughs, starting with $70 million of New York City taxpayers' money.
The Man Who Knows What This Does to Neighbors
John Catsimatidis has run Gristedes supermarkets in New York City for decades.
He knows what grocery stores actually cost.
He knows that private operators work on a 1% to 3% profit margin.
And he knows exactly what happens when a tax-free, rent-free competitor opens next door to a struggling bodega.
"The people that are going to run those five stores are not going to pay any real estate taxes," Catsimatidis told Fox News Digital. "Not going to pay any rent."
He did the math: eliminating rent and property taxes alone would let any operator cut prices 20% across the board.
Mamdani is promising 30% discounts.
The only way that math works is if New York City taxpayers are permanently subsidizing the difference – every banana, every loaf of bread, every dozen eggs – while the bodega owner two blocks away pays full freight on rent, taxes, and delivery fees.
SBA Administrator Kelly Loeffler put it plainly: "Not only will New York taxpayers pay $70 million to build government-run grocery stores – they will also pay subsidies in perpetuity to keep them afloat while funding unfair competition against legitimate small businesses."
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Catsimatidis has a name for what that is: "You're competing against your own citizens – and that's only done in socialist countries."
Hugo Chávez Tried the Same Thing
This isn't a new idea.
Hugo Chávez launched Venezuela's government-run grocery network, Mercal, in 2003 with the same pitch: deep discounts, food for the poor, proof that socialism works.
At first, Venezuelans showed up.
Then the shelves went empty.
Then came the quotas.
Then the lines – hours long, for flour and rice.
Then came soldiers, occupying private supermarkets, detaining store owners, and ordering food producers to hand over their inventory to the state.
Venezuela's Mercal didn't solve hunger.
It dismantled the private food supply and replaced it with government rationing.
The Soviet Union ran the same experiment.
Cuba ran it.
Every country that tried it ended up in the same place: shortages, lines, and a government blaming private business for the collapse it engineered.
The Bill New Yorkers Will Actually Pay
Catsimatidis pointed out that New York City's small business owners are already getting squeezed from every direction.
Congestion pricing adds 10% to 15% to every vendor delivery south of 61st Street.
Rising electricity costs are cutting into margins that were already razor-thin.
Online retailers ship directly to consumers without the overhead of a New York City storefront.
Walk down the street in Manhattan right now.
Half the storefronts are empty.
That's the environment Mamdani wants to drop five government-subsidized competitors into.
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Analysts estimate the five-store network could cost more than $100 million annually in operating expenses – on top of the $70 million construction bill.
That's a recurring nine-figure tab, every year, to run five stores in a city that already has thousands of grocery options.
And when those government stores squeeze the neighborhood bodega out of existence, the same administration that drove them under will claim the food desert it created requires even more government intervention.
Catsimatidis offered a straightforward alternative: if the city wants lower prices, give existing grocers a tax credit tied to what they cut from the shelf price.
Lower costs for New Yorkers by reducing the burden on the stores already serving them – not by subsidizing a government competitor designed to make private competition impossible.
That would actually help people.
What Mamdani is building, Kansas City already built.
New York is about to spend $70 million to find out whether a socialist mayor can pull off what Hugo Chávez couldn't.
Sources:
- Julia Bonavita and Nikos DeGruccio, "Grocery boss warns Mamdani's city-run stores pit government against 'its own citizens,'" Fox News, August 12, 2026.
- "Kansas City's taxpayer-funded grocery store closes after millions spent," Fox Business, August 13, 2025.
- "Mamdani's 'ration shop' grocery plan faces blistering economic critique as opponents blast socialist policy," Fox News, July 28, 2026.
- "What Mamdani can learn from Hugo Chávez's government-run grocery store debacle," Reason, July 31, 2026.
- "Mamdani's taxpayer-funded grocery stores face mounting criticism over costs, competition, and accountability," Conservative Institute, August 2026.
- "City-Backed Kansas City Grocery Store Closes Despite Millions in Taxpayer Funding," National Review, August 19, 2025.
- "Mamdani beware: Government-run grocery stores have historically failed," Washington Examiner, July 30, 2025.