Clean up in aisle 3! Zohran Mamdani’s misguided recipe for cheaper groceries

Politicians spend a lot of time promising to make life more affordable, whether in Canada or the United States.

There are, broadly speaking, two ways to do it. The first is by increasing the amount of money in people’s pockets. The second is by lowering the price of things.

The mayor of New York, democratic socialist Zohran Mamdani, presides over one of the world’s most expensive cities. He was elected on an all-caps Affordability Agenda, and this week he took a step forward on one of its signature promises: a plan to lower food prices by opening a network of government-owned grocery stores.

The city intends to create five new supermarkets, where it says that “a core basket of everyday groceries will be 30 per cent cheaper” than at private retailers. That will “cut New Yorkers’ average grocery bill by 15 per cent, about US$90 a month, or roughly US$1,000 a year.”

The city of 8.6 million is home to more than 1,000 supermarkets, along with thousands of small stores that New Yorkers refer to as bodegas. However, the city says that it has just 1.5 square feet of grocery space per resident, compared to five to 10 square feet in the rest of the U.S.

That leaves some neighbourhoods with too few shopping options, and the entire city with higher prices.

How far left is the Democratic Party willing to go?

Mr. Mamdani campaigned on addressing a real problem. It’s just that his solution should leave you scratching your head.

New York has some of the world’s highest residential rents, in part because the city has long made it difficult to build more housing. The story with supermarkets is similar, and arguably worse.

Much of the city is zoned to exclude anything other than small supermarkets. The municipal government has also rebuffed all attempts by Walmart, the country’s largest retailer, to open a New York store.

The average New York grocery is just 15,000 square feet, according to the city, while the average size of the two sites chosen so far for government-owned stores is smaller. The average American grocery store is around 42,000 square feet, according to the Food Industry Association.

City rules making it difficult to build full-sized supermarkets, plus city politics blocking one of the deepest grocery discounters, is a recipe for less competition and higher prices, engineered by government policy.

That’s why Mr. Mamdani’s answer makes no sense.

How will MamdaniMart sell groceries for 30 per cent cheaper? Through a taxpayer subsidy.

The city-owned stores will pay no rent and no property taxes, with taxpayers providing whatever additional subsidy is necessary to price goods at 30 per cent below market prices.

That’s it. There’s no other magic.

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If a loaf of bread is going for $5 in the rest of the city, the government store will sell it for $3.50, with taxpayers bridging the gap.

Will that make bread more affordable in New York? Yes, for the small number of shoppers able to reach the head of the line at one of the five tiny stores.

Is that the most effective and least costly way of making bread more affordable, particularly for those with the lowest incomes? Obviously not.

You’d think that the left – which is never more content than when reciting mantras of systemic this and systemic that – would be eager to tackle an actual set of systemic issues driving up the cost of groceries in America’s largest city. Apparently not.

If Mr. Mamdani embraced a grocery abundance agenda, and made it easy to build new, large grocery stores (even, gasp, a Walmart), that would lower prices and raise grocery availability, at no cost to taxpayers.

At the same time, government could give more money directly to low-income residents.

Make groceries more affordable to all, through a more competitive and efficient marketplace, where everyone’s dollar goes a bit further, at no cost to taxpayers. And make groceries more affordable for those least able to afford them, by putting more money into their pockets.

Instead, Mr. Mamdani said this week that there would be no means-testing at his grocery stores.

It adds up to this: A city of nearly nine million people, whose residents face the real problem of a very high cost of living, will aim to address that by opening five pint-sized supermarkets offering deeply discounted food that is heavily subsidized by taxpayers, on a first-come, first-served basis.

Again, there is a real problem to be solved here. It’s just that the proposed solution ignores the deepest roots of the problem, spends money on symptoms rather than causes, and will almost certainly fail to help most of those who need help.