Business Groups Sue NYC Mayor Over Plan for Government-Run Grocery Stores

The Multicultural Business Coalition, representing 50 chambers of commerce across the city, filed two separate lawsuits in state court Monday to challenge Mayor Zohran Mamdani’s initiative to establish five city-owned supermarkets offering subsidized groceries. Business owners and coalition leaders gathered Wednesday outside American Deli Mini Market Corp in Harlem, directly across from the planned Manhattan location at La Marqueta, to voice their opposition to the rollout scheduled to begin in late 2027.

Mark Jaffe, president and CEO of the Greater New York Chamber of Commerce, called the plan “a campaign promise doomed for disaster if it is allowed to go through.” One lawsuit is structured as a class action on behalf of hundreds of store owners and contends that the city-run grocery operation would violate their civil rights through discriminatory use of government funds. The second lawsuit seeks a permanent court injunction against the municipal stores without completion of necessary studies and analysis.

Under Mamdani’s proposal, the five stores will offer a core selection of items priced 30 percent below average retail rates, with the city covering land, construction, and overhead expenses while a private operator selected through a competitive process manages day-to-day operations. Jaffe argued this arrangement creates an unfair competitive advantage, as small business owners must pay full utility bills, property taxes, and fines while purchasing inventory at full price.

Jaffe suggested that the city establish a task force to mitigate damage to neighboring businesses rather than proceed with the current plan. He maintained that purchasing groceries at full price with tax dollars to resell at 30 percent discounts does not effectively address food insecurity and will eliminate local competition.

Elvis, owner of American Deli Mini Market Corp, stated through a translator that opening a city store across from his business would force him to close despite paying substantial taxes. Mamdani’s administration countered that New York City has more than 1,000 grocery stores, 10,000 bodegas, and only 1.4 million residents struggling with food insecurity, arguing the five proposed stores would have minimal market impact.

The mayor’s office said it established the NYC Groceries Task Force to convene city agencies, industry experts, and local business owners to guide implementation, and launched an OPEN Task Force to reduce red tape and decrease fines and fees for small businesses. Mamdani has expressed confidence in both “the legality and the importance” of the initiative.