Catsimatidis believes the economics are especially troubling.
“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.”
That distinction matters in New York, where grocery stores face substantial costs for rent, labor, utilities, transportation, taxes and other expenses. Traditional supermarkets and neighborhood bodegas have to absorb those costs while attempting to remain competitive.
Catsimatidis contends that eliminating major expenses such as rent and property taxes could give a government-backed operation a significant advantage over privately owned stores.
He estimates that the savings from those costs alone could translate into dramatically lower prices. Mamdani, meanwhile, has promoted discounts of as much as 30 percent as part of his grocery strategy.
The question, critics say, is simple: Who ultimately pays for those savings?
SBA Administrator Kelly Loeffler has also criticized the proposal, warning that the initial construction spending may only represent the beginning of the financial commitment.
“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.”
Catsimatidis was even more blunt when describing the potential consequences for private operators.
“You’re competing against your own citizens – and that’s only done in socialist countries.”
A Warning From Other Government Grocery Experiments
Opponents of Mamdani’s approach have pointed to previous government-backed grocery ventures as cautionary examples.
Kansas City, Missouri, became a prominent case after public resources were devoted to the Sun Fresh Market on the city’s east side. The store was intended to address concerns about food access, but the operation eventually struggled with declining customer traffic and financial losses before closing.
Critics argue that experience demonstrates the danger of assuming that public funding can automatically make a grocery operation commercially sustainable.
The broader historical argument is even more controversial.
Venezuela’s Hugo Chávez administration established Mercal, a government-supported food distribution network, as part of an effort to provide cheaper food to poorer residents. The program initially attracted customers with discounted products, but Venezuela later became notorious for shortages, rationing and long lines as the country’s broader economic crisis intensified.
Critics of government-run grocery stores frequently cite Venezuela as an example of what can happen when political leaders attempt to replace private markets with heavily controlled food distribution.
There is an important distinction, however: New York’s proposed stores would not automatically replicate Venezuela’s economic system. Mamdani’s plan is being presented as a targeted municipal program rather than a takeover of the city’s entire grocery industry.
Still, opponents argue that the underlying concern is similar: government-backed competition can distort a market when private businesses are expected to operate without comparable subsidies.
The Cost Question Looms Over New York
For New York’s existing grocers, the concern extends beyond competition.
Store owners already contend with high operating expenses and the challenges of maintaining physical locations in one of the most expensive cities in the country. Delivery expenses, energy bills, labor costs, property costs and other overhead can leave little room for error.
That makes the prospect of a taxpayer-supported competitor particularly contentious.
If a city-backed supermarket can operate with substantially lower overhead because taxpayers absorb some of its costs, private businesses could be forced to lower prices without receiving the same assistance.
That could put additional pressure on smaller neighborhood stores that depend on thin margins to survive.
Catsimatidis has proposed a different approach.
Rather than establishing government-owned or government-backed competitors, he has suggested using tax incentives to encourage existing grocers to lower prices. The idea would be to help businesses already serving New York communities instead of creating a new taxpayer-supported chain.
That proposal gets to the heart of the dispute over Mamdani’s grocery strategy.
Supporters see government intervention as a way to challenge high food prices and improve access to affordable groceries. Critics see the same intervention as a potential threat to the private businesses that already provide those services.
The ultimate test will be whether Mamdani’s proposed stores can deliver lower prices without creating an expensive permanent burden for taxpayers or damaging neighborhood competition.
New Yorkers may soon get an answer.
For Catsimatidis and other critics, the warning is straightforward: reducing the price on the shelf does not necessarily mean reducing the cost of the system.
And if taxpayers are ultimately required to cover the difference, the grocery bill may simply arrive in another form.
