The public supermarket plan promoted by the New York City government is facing legal challenges once again. On September 9, independent supermarket operators and industry associations filed an antitrust lawsuit in the Southern District Federal Court of New York, accusing the city government of using public funds to subsidize commodity prices, making it difficult for private supermarkets to compete fairly. The plaintiffs also applied for a preliminary injunction to suspend the bidding process for operators.
The plaintiffs include the National Supermarket Association, R&E Corporation, City Fresh Supermarket, and other organizations. The defendants are the New York City government and the New York City Economic Development Corporation.
According to the complaint, the Mamtani administration has allocated $70 million for the “NYC Groceries” program, preparing to establish a city-owned supermarket operated by private entities in each of the five boroughs. The city government will bear the costs of store renovations, rent, property taxes, and subsidize a portion of the discount losses.
The plan requires basic food items such as fresh milk, eggs, meat, and fresh fruits and vegetables to be sold at prices 30% lower than the general retail prices. The plaintiffs argue that private supermarkets have to bear rent, taxes, labor, and procurement costs themselves, making it impossible for them to compete with stores receiving government subsidies. The long-term government subsidies for low-price sales constitute “predatory pricing” and are suspected of violating the federal Sherman Act.
The two plaintiff supermarkets are located near the East Harlem La Marqueta market and the Hunts Point site in the Bronx announced by the city government. R&E Corporation, which has been operating in the Bronx for over 40 years, stated that over 60% of their sales come from food items included in the discount range by the city government, while the planned public supermarket is less than half a mile away from their store.
The deadline for bids from public supermarket operators is October 16. As of now, the court has not made a decision regarding the application for a preliminary injunction.
The Multicultural Business Coalition filed two lawsuits in state court in August regarding the plan, alleging that the city government did not adequately assess the impact on surrounding small businesses and questioned the legal authority of the city to open public supermarkets.
Mamtani expressed confidence in the legality and necessity of the plan. The first public supermarket is expected to open in the Bronx in 2027, with the city government planning to establish one in each of the five boroughs by 2029.