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A non-profit newsroom, powered by WNYC. Gothamist Listen Live Donate News Mamdani’s plan for cheaper groceries could hurt minority grocers, lawsuit says By Karen Yi Published Aug 24, 2026 at 1:38 p.m. ET
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A coalition of business owners sued the Mamdani administration on Monday over its plans to launch five city-owned grocery stores that officials say will offer lower prices to shoppers.
The pair of lawsuits, filed in New York State Supreme Court, allege the city’s plan will harm independent grocers, many of whom are minorities, by siphoning customers and forcing their businesses to close.
The Multicultural Business Coalition , a nonprofit representing hundreds of businesses, filed a class-action complaint claiming discrimination and said Mayor Zohran Mamdani’s plan would hurt primarily immigrant and minority-owned businesses that wouldn’t be able to compete with city-owned stores. The group, based in Kansas, also argued the municipal stores exceed the city’s authority and are asking a judge to stop Mamdani’s plan.
“The Puerto Ricans were the bodega pioneers, and they were followed by the Dominicans, the Arabs, the Koreans, the Chinese, and finally my Mexican business members,” Jairo Guzman, president of the NY State Mexican Chamber of Commerce said in a statement.
“Food retailing-from bodegas to supermarkets-is New York City’s great mosaic. Mayor Mamdani needs to withdraw his disastrous plan and work with us to find different ways to bolster and sustain what so many NYC immigrants have created.”
The Mamdani administration will open one city-owned store in each borough that will be operated by a private grocer. The first location will open next year in the Bronx. Mamdani, who promised to open municipal grocery stores as a way to alleviate food costs , said the sites will offer staple items 30% cheaper than average retail prices .
“I’m confident in both the legality of this — that it will stand up in court — and the importance of delivering it,” Mamdani said during an unrelated press conference on Monday when asked about the lawsuits.
He said grocery prices have increased 30% over the last few years and that existing city-subsidized markets like Essex Street Market in the Lower East Side and Moore Street Market in East Williamsburg haven't affected nearby bodegas or stores.
City officials have said the city’s municipal stores won’t sell items that are revenue drivers for bodegas such as cigarettes, prepared foods or lottery tickets.
In the lawsuit, the Multicultural Business Coalition said the city never conducted any “serious analysis” before launching its municipal grocery plan and said the sites for the stores were selected “arbitrarily.”
The Bronx store will open in an affordable housing development in Hunts Point, while the Manhattan store will open in East Harlem at La Marqueta in 2029. The city is still considering sites for its stores in Queens, Brooklyn and Staten Island.
The lawsuit said there are several Hispanic- and Korean-owned supermarkets near La Marqueta which will be hurt by the increased competition. The suit said grocery stores are barely making profit and operated by minority business owners who have historically been discriminated against.
No grocer owns more than 10% of the market in New York City, which makes the city’s grocery stores diverse and competitive, experts said. But grocery store owners say they struggle with high rents, high payroll costs , security and the rising costs of food from suppliers and distributors.
Mamdani said the city is working on other ways to help “cut costs and cut the regulations that so many bodegueros, as well as grocery store owners, have to jump through in order to do their work.”
Examples include the requirement to have different licenses for hot food and cold frozen items, and regulations about selling items outside.
Karen Yi covers homelessness and poverty. She joined the WNYC and Gothamist newsroom in 2020. Before that, Karen covered Newark for the Star-Ledger and spent almost a decade working for newspapers in New Jersey and Florida. She grew up in Miami and has a dog named Cashew. Got a tip? Email [email protected] or Signal 917-589-1460.
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