Bronx and Harlem Grocers Sue NYC Over Socialist Grocery Program

New York City, N.Y. — The America First Policy Institute (AFPI) filed suit on behalf of local independent grocers R&E Corporation, City Fresh Supermarket, and the National Supermarket Association (NSA) against New York City over Mayor Zohran Mamdani's socialist “N.Y.C. Groceries: A Recipe for Affordability” policy, which would establish publicly funded privately operated grocery stores, one in each borough.

Under this policy, a “Core Basket” of everyday groceries would be sold at prices averaging 30% below retail prices. The City would cover rent and property taxes, provide $70 million in capital funding for the five locations, and make ongoing taxpayer-funded “Affordability Payments” to cover operating losses.

Two of the announced locations are located within walking distance of existing independent grocery stores involved in this case. R&E has operated at its Bronx location since 1984 and is located less than one-half mile from the announced Hunts Point site. City Fresh Supermarket has operated for 15 years and is less than a five-minute walk from the proposed La Marqueta location.

The plaintiffs argue the City’s plan creates a competitive advantage independent grocers can’t compete with. Independent grocers must cover rent, taxes, employee payroll, inventory, and other operating costs, while the City’s stores would receive taxpayer-backed support to cover those same expenses. In order to compete, independent grocers could attempt to lower their prices, but because the City’s 30% discount is measured against competitors’ retail prices, the City stores will always undercut independent grocers.

“This case seeks to affirm that New York City cannot use tax subsidized discounts to unfairly compete against long-standing businesses and drive them out of business,” said Richard Lawson, Vice Chair of Litigation at the America First Policy Institute, at a press conference Wednesday in Harlem.

With the City’s request for proposals (RFP) closing October 16, independent grocers face an impossible choice: bid to participate and potentially join a plan that may violate antitrust law, or sit out and risk being locked out as the City builds a taxpayer-backed competitor that cannot go bankrupt.

Anthony Pena, President of the National Supermarket Association, said:

“Competition is part of their business, but competing against each other is different than competing against city hall. You cannot call it a level playing field when one store has to survive on what it earns, and others are being stood up by taxpayers."

Jerry Nunez, manager of City Fresh Supermarket in Harlem, said:

“We have been running City Fresh for 15 years. Fifty people have jobs because of what we have worked hard to build in this neighborhood. This is not just about a grocery store, if my store cannot survive the competition with the city run stores, we lose part of our community."

The plaintiffs argue that the mandatory 30% discount, financed by free occupancy costs plus taxpayer-backed “Affordability Payments,” is predatory pricing, leaving City-backed stores with an unfair advantage independent grocers can’t compete with.

The plaintiffs are asking the court to extend the October 16 RFP deadline until 30 days after the court rules on the first two antitrust claims. They are not asking the court at this stage to terminate the City-backed grocery store program.

To watch the press conference, click here.

For a one-pager, key excerpts from the complaint, and a legal explainer, click the links below.

• One-pager: click here

• Key excerpts from the complaint: click here

• Legal explainer: click here