Bodegas Push Back on Mamdani’s $70M City-Owned Supermarket Plan as Democratic Cities Weigh Similar Models

Mayor Zohran Mamdani ran on a promise to ease the pressure on New York City’s bodegas and delis.

Now, some of the very neighborhood stores he pledged to help are challenging his city-backed grocery store proposal in court, warning that the plan could put local small businesses at risk.

The Multicultural Business Coalition, which represents dozens of ethnic and multicultural chambers with members that include immigrant-owned bodegas, supermarkets and grocery stores, filed the lawsuit Monday in New York County Supreme Court.

In its complaint, the coalition is asking a judge to stop Mamdani’s grocery-store plan entirely, claiming it runs afoul of New York civil rights laws and the equal protection clause of the state Constitution.

The group argues the city would be creating an uneven playing field by backing competing stores with benefits that independent bodegas do not receive, including publicly controlled real estate, construction funding and broader government support.

Under Mamdani’s proposal, the stores would offer produce, meat, dairy products and pantry staples at about 30 percent below standard market prices.

For families struggling with high grocery bills, those discounts could translate into meaningful relief.

But the Multicultural Business Coalition says small grocery stores already surviving on narrow margins could lose customers to the subsidized program, potentially threatening the neighborhood businesses that serve as community anchors.

MBC President Kenneth Roldan has urged City Hall to negotiate rather than fight the coalition in court.

 ‘Although we have not heard from you since May 2026, we are open to resolving this matter amicably with more sensible solutions to feed working class people with nutritious essential food items at affordable prices,’ Roldan said in a letter to City Hall, according to the New York Post.

Mark Jaffe, the coalition’s legal counsel and president of the Greater New York Chamber of Commerce, also said the group wants a compromise.

‘We are asking the mayor to avoid litigation to sit down with us,’ Jaffe told the Post. ‘But we have to try to stop this if they won’t listen to us.’

The city plans to open one store in each borough. It would provide the sites and substantial financial support, while private grocery operators would run the stores.

Ironically enough, while campaigning, Mamdani filmed one of his trademark highly produced skits inside a New York deli, promising to make life easier for the city’s small-business owners by cutting fines and fees, slashing red tape and speeding up the permitting process. 

‘There’s a lot of things that make New York City special. For me, it’s the delis and bodegas,’ Mamdani said in the video.

The program is expected to cost about $70 million, although spending will vary by location. The East Harlem store at La Marqueta alone has been estimated at roughly $30 million.

The city says the stores could save a typical shopper about $90 a month, or more than $1,000 a year, through discounts on a core basket of groceries.

The first location, in Hunts Point in the Bronx, is expected to open by the end of 2027. The La Marqueta store is now projected for 2029, with all five locations expected to be operating by the end of that year.

New York City has roughly 14,000 grocery stores and bodegas, according to city food-system data, and about 84 percent have fewer than 10 employees. Many are immigrant-owned businesses operating on narrow margins.

MBC argues that a government-supported supermarket selling many of the same basic products for 30 percent less could pull customers away from those stores.

‘One of the core pledges of Mr. Mamdani’s affordability agenda was the opening of five municipal grocery stores,’ according to the lawsuit.

 In doing so, Mr. Mamdani pledged to open municipal grocery stores that sell food items well below the market rate. The grocery stores do not appear to meaningfully regulate the so-called affordable items on a need base method. Therefore, the municipal grocery stores, five in total, openly compete with grocery stores at large, including members of the MBC, who are members of groups historically discriminated against, and who run grocery stores barely making profits, in some instances not operating in the red. Therefore, many minority members of the MBC cannot compete with the municipal grocery stores, and therefore, will be put out of business.’

 Mamdani has rejected the idea that the program is intended to replace bodegas.

The city-backed supermarkets will not sell several major bodega revenue generators, including alcohol, cigarettes, lottery tickets or hot food.

City officials say they are targeting areas with the greatest need.

In Hunts Point, the city says 77 percent of households in surrounding neighborhoods struggle to afford basic necessities. In East Harlem, nearly 40 percent of households received SNAP or other public assistance during the previous year.

The plan has also drawn criticism over how the city could control access to the discounts.

A New York City Economic Development Corporation official recently said the city was considering a ‘library card-esque’ membership system to identify shoppers and manage purchases, ensuring discounts benefit everyday residents rather than bulk buyers.

Mamdani’s proposal also comes with a string of cautionary examples from cities and towns that have tried to keep grocery stores alive with public backing. 

In Kanas City, Missouri, Sun Fresh Market, a government-backed grocery experiment, opened in 2018 to improve fresh-food access on the city’s East Side, closed in August 2025 after years of financial struggles.

Its nonprofit operators cited crime, rising costs, and declining customer traffic as challenges.

In Baldwin, Florida, the town stepped in and opened its own grocery store in 2019 after the last private supermarket closed its doors. But what began as a lifeline for residents soon became a financial burden for the town.

The store initially benefited from a surge in demand during the pandemic, but struggled to break even once that faded. It reportedly lost nearly $200,000 a year before finally closing in March 2024, with its limited buying power leaving it unable to compete with larger supermarket chains.

And in Erie, Kansas, officials took a similar gamble in 2020, buying the town’s only grocery store to keep it from disappearing. But the city-run operation struggled to generate enough sales to cover its costs.

Four years later, officials changed course, handing day-to-day operations to a private company while the city retained ownership of the building.

San Francisco has also flirted with the idea of government-backed grocery stores.

 Supervisor Bilal Mahmood proposed a city-run fund to help transform corner shops into affordable grocery markets, taking inspiration from New York’s push for municipal grocery stores. But the plan faced opposition and was subsequently scaled back.

In Boston, the idea has moved further. 

The City Council has formally begun exploring the feasibility of publicly owned grocery stores, with supporters arguing that they could help tackle soaring food prices and food insecurity, while also providing a safeguard against potential disruptions to SNAP benefits.

And in Chicago, officials have already studied the concept. 

A 2024 feasibility study concluded that a city-owned supermarket was ‘necessary, feasible, and implementable’. But the city has since shifted course, exploring a public market model rather than directly operating its own grocery store.

The Daily Mail reached out to Mamdani for comment.