Francisco Marte runs a bodega in the Bronx and heads the Bodega and Small Business Group. The city is opening five stores that it says will price a basket of staples 30 percent below market. "It's unfair," he told Gothamist. "They are using our tax money to compete with us."

He is right about the money. Mayor Zohran Mamdani is building five city-owned grocery stores, and the city has committed to deliver the sites, cover the rent and the property taxes, and fund the buildout. Then it pays down the price on the shelf. Marte carries the first four himself, out of a margin the city does not have to earn, and nobody pays down his prices. And the city now says it is weighing tax breaks for grocers like him. New Yorkers pay for the store. Then they pay again for the damage the store does.

Five subsidies build that 30 percent discount, and your taxes pay for all five

The city has put $70 million into construction, money allocated in the capital budget. Mamdani campaigned on $60 million. Nearly half of the $70 million goes to one store. The Economic Development Corporation, the public agency running the program, lists $30 million for one ground-up build at La Marqueta, a city market hall in East Harlem. That store will not open until 2029. That leaves about $10 million apiece for the other four. Three of the five boroughs have no announced site at all.

And the construction money is the part with a number on it. Rent, property taxes and the discount itself recur every year, and the city has published no figure for any of them. It has not set one. The bid documents ask each company competing to run the stores to name its own "requests for subsidy," so the yearly bill will be whatever the winner asks and the city agrees to.

What that buys, the city says, is a basket of staples priced "on average 30 percent below market prices," available to any shopper regardless of income, cutting an average grocery bill "by 15 percent, about $90 a month." Neither calculation has been published.

Now the city is weighing relief for the grocers it plans to undercut

Asked Sunday what the city would do for the grocers its stores will undersell, the New York City Economic Development Corporation told Fox News that its grocery task force is "not currently considering any grant programs for existing grocers." It added: "However, we are looking at the potential for tax abatement, incentives, and zoning benefits through existing City programs."

But four days earlier the corporation's senior vice president for the program, Waverly Neer, had gone further on the local news channel NY1, saying the city was weighing "grants, incentives that can come alongside these grocery stores." By Sunday the grants had been walked back.

The main existing program is FRESH, Food Retail Expansion to Support Health, which hands out property tax breaks and zoning relief to bring supermarkets into neighborhoods that lack them. The city is now floating it as compensation for a supermarket the city is building itself. An abatement is tax the city stops collecting, and the rest of the city covers the gap. That is the second bill, and the city is considering it before a single store has broken ground.

A property tax break also does a shopkeeper no good if he rents his storefront and his landlord collects it.

A grocer cannot match a thirty percent cut and stay open

Grocery runs on one of the thinnest margins in retail. Rep. Mike Rulli, an Ohio Republican whose family runs the Rulli Brothers chain, gave Fox News the numbers: the industry "runs on about 27% gross. That's before you pay your bills. Once you pay your bills, you're about one-and-a-quarter, one-and-half-percent net." Gross is what is left of the sale price after the food is paid for. Net is what is left after every other bill.

So the promise is a discount deeper than a private grocer's entire gross margin. John Catsimatidis, who has run the Gristedes chain for decades, told Fox News that free rent and no real estate taxes would let him cut prices "20% across the board." Atlanta's city-backed store came in at 18 to 22 percent below comparable stores. Either New York misses its own number, or it closes the gap with cash. The city has not said which. Either number is deeper than a bodega's net margin, so either one does the same thing to Marte.

A grocer who matches that price sells below cost. One who holds his own loses his customers to the store down the road. Catsimatidis had the plainer version: "You're competing against your own citizens, and that's only done in socialist countries."

Another bodega group helped elect Mamdani. Radhames Rodriguez leads United Bodegas of America, which claims 14,000 member stores, and he endorsed Mamdani last October on a promise of consultation. "I'm not supporting to have competition, not for him, not for anybody," Rodriguez told reporters at the endorsement. The endorsement split his group and a co-founder quit over it. The stores are coming anyway, and he told the Washington Examiner this summer: "Having items that sell for 30% less than our prices means nobody will go to our stores."

Taxpayers cover the rent whether the store works or not

Errol Schweizer is a former vice president of grocery at Whole Foods who now consults with the Economic Development Corporation on this program. In July he argued its case in Jacobin, a socialist magazine. The money is "less than one-tenth of 1 percent" of the city budget, he wrote, "a literal rounding error."

The rounding error is the building. The yearly bill is the one with no number on it, and Schweizer wrote down who carries it. Rent and taxes "will be covered by the city." Those are the two costs that close a grocery store in a bad year, and this design has the city paying them in a bad year and a good one. The stores "will be operated by a private sector expert," and his phrase for that arrangement is that "outsourcing operations separates the risk from the responsibility."

Kansas City spent eighteen million dollars and lost the store anyway

Mamdani picked his best ground. The first store is going into Hunts Point, a neighborhood in the South Bronx where about 36 percent of residents live in poverty against 18 percent citywide. The mayor's office counts one full-service supermarket within a quarter mile of the site.

That is also the neighborhood his store can most easily hurt. A subsidized competitor can lose money for a decade and still outlive the grocer across the road, because only one of them has to earn a living.

But Kansas City ran that experiment to the end. A nonprofit operated the Sun Fresh market there on nearly $18 million of city money over ten years. Sun Fresh was the only grocery store for a mile. Its customer count fell from 14,000 to about 2,000, its chief executive told the public station KCUR, and it closed in August 2025. Ten years of public money did not hold its customers. The neighborhood lost the one store it had.

And Erion Malasi of the Economic Security Project, which campaigns for city-owned groceries, argued this month for one in Chicago. His case opens with what public money already bought there: "In 2023, the city of Chicago approved roughly $26 million in incentives to help Yellow Banana renovate and reopen Save A Lot stores, including $13.5 million in taxpayer financing. Now seven of those stores are shuttered." What Kansas City, Chicago and Atlanta show is a transfer: public money in, and no evidence that any neighborhood's grocery bill came down.

Mamdani's own chapter co-chair says the losers deserved to lose

Mamdani says there is room for everyone. He points to the Essex Street Market, a city-run market hall on the Lower East Side, which he says "has not yielded any kind of a negative impact on bodegas or grocery stores around it."

That market does not undersell its neighbors by 30 percent.

Gustavo Gordillo co-chairs the New York City chapter of the Democratic Socialists of America, the organization Mamdani belongs to and ran with. Asked on Fox News in July about the stores that would lose customers to the city's, he answered: "If one publicly-owned grocery store that brings prices down in the neighborhood is enough to put someone out of business, then maybe they shouldn't have been in that business in the first place."

A socialist is telling Francisco Marte that when a store built with his own taxes takes his customers, he deserved to lose.

Every discount at a city store is paid for by somebody. It is paid by Francisco Marte, in the taxes he sends the city and in the customers the city buys away from him with his own money. This is how socialism works. It takes your money, builds your competitor, and offers you a tax break for the privilege of watching.