Lawsuit filed over city-run grocery stores
The Multicultural Business Coalition, a nonprofit representing small supermarkets, bodegas, and grocery store owners, filed a class-action lawsuit Monday in New York County Supreme Court against Mayor Zohran Mamdani and the city, seeking to block the administration's plan to open five government-owned grocery stores.
The coalition alleges that the plan violates the civil rights of smaller, minority-owned grocery stores because they cannot afford to match the discounts the city-run stores would offer, according to the lawsuit.
Mark Jaffe, the group's general counsel and president of the Greater New York Chamber of Commerce, said price differentials would make competition impossible. "You cannot expect hard-working small business owners to compete with a supermarket that isn’t going to pay rent, won’t have to pay an electric bill and won’t have to buy their products at full price," he said.
The city-run stores would offer food staples at 30% below market rates. The mayor's office estimates the plan would cut the average New York City grocery bill by 15%, or about $90 a month. The first store is slated to open next year in Hunts Point in the Bronx; the others are expected by 2030.
Mayor says plan is legal, points to existing models
At a news conference Monday announcing a parks initiative, Mamdani said he was confident in the legality and importance of his plan. He cited two markets in Manhattan and Brooklyn that operate on a similar model and have not had a negative effect on the bodegas around them.
Those markets have been operating for years, managed by the city's Economic Development Corporation, which rents city-owned properties to private vendors at below-market rates and covers other operational costs, according to CNN, which reported on the mayor's comments.
The plan draws on existing government-owned and subsidized models, including Defense Department commissaries and public retail markets. The city has also pointed to government-run stores in small towns such as St. Paul, Kansas, and Venice, Illinois. Mamdani's administration has set aside $70 million to open the stores and is requesting proposals from external operators.
The plaintiffs argue that the city has not conducted an adequate analysis of business impact. They claim officials selected sites arbitrarily and failed to study neighborhood needs. The lawsuit also contends that the threat is the same as if Walmart were allowed to operate in New York City — a comparison that echoes the political debate.
Legal challenges mount
This is at least the third legal challenge to a major affordability proposal from Mamdani's administration. Earlier this month, a homeowners' suit against the mayor's proposed pied-à-terre tax was temporarily blocked by a Staten Island judge, and landlords have sued the city over a rent freeze.
Jaffe said store owners hope to reach an agreement with the city. "We have seen no business plan, this is just a marquee store that will allow the mayor to say he kept a campaign promise," he added.
The city's law department did not provide comment, and referred inquiries to the mayor's office.