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NYC to open municipal grocery store in 2027

grocerydive.com

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Re: NYC to open municipal grocery store in 2027

#121

Post by asdff »

ilaksh wrote: post #48
asdff wrote: post #5

Earlier quoted context omitted.

Major grocers are more inclined to form cartels on price than to engage in organic competitive action. These businesses are too large and incentives too perverse for free market dynamics to apply anymore.

I wonder if there is a way to improve pricing more systemically by combating some of this. Or if there could be some kind of network and information protocol that could provide a decentralized alternative. Maybe there could be an Internet protocol or NYC Internet protocol that food suppliers could list low price items with. Independent stores could order from here, shipped to their store, or maybe one or two city war…

This is probably not far off from how things already work in distribution. Most restaurants are ordering from the same food wholesalers in a given region. When I go to more "independent" grocers or local chains they still have much of the same offerings as major grocers in my area, so I'm guessing they also order from the same sets of distributors (or lease shelf space to the same groups). And I'm not talking just the packaged stuff. But when certain varietals come in e.g. Cosmic Crisp apples, its like all the grocery stores in the area are getting the Cosmic Crisp apples over the next few weeks with the same sticker and all.

I know for stuff like seafood there is a saturday night 1am fish market near our harbor where significant volume is sold wholesale to restaurants and grocers (but also individuals interested in filling a chest freezer).

So I think already there are just few places to order food wholesale in a given region so those prices are probably somewhat even. Then of course you go to vons, kroger, ralphs, save4less, the local korean grocer, and see different prices for the exact same commodified product like Cosmic crisp apple or 6 pack of coca cola, there is your markup that comes from the grocer itself on top of the regional wholesale price. Grocers like to have flexibility in markup to play psychological games like rotating sales, coupons, and offer rewards programs. Seems that sort of finagling isn't tolerated at the next level of abstraction in business to business sales.

Cost disruptions might be good to put the blame on who exactly in the chain is gouging prices. At the end of the day, the eggs in the egg shortage were not more costly to produce than beforehand. And the egg farms that were culled of their hens, were probably not that much of an anchor on operations given that they probably were not consuming their usual power, water, farmhands probably all laid off, land bought and paid for probably decades ago by this point, way out in marginal farmland where property taxes are probably quite low. Certainly not enough to quadruple the price of eggs. And how interesting how Trader Joes still sold $2.99 dozen racks during this whole crisis.

Re: NYC to open municipal grocery store in 2027

#122

Post by ceejayoz »

scoofy wrote: post #111
rdtsc wrote: post #80

> “Some will insist that city-owned businesses do not work, that government cannot keep up with corporations. My answer to them is simple: I look forward to the competition. May the most affordable grocery store win,” Mamdani said. Well it's interesting enough to try. Are they going to keep the stores open at a loss, that's not really competing then, is it? If they sell things that are much cheaper, restaurants could…

It's a question of volume. If they're really going to sell things at a loss, then it should create real demand. If you have that demand, then you're going to start running out of groceries mid-day. At that point, the business sucks because you either have to show up at 10 AM to buy anything, or they start some ridiculous rationing program to prevent people and businesses effectively reselling at market rates, or they…

What if it was possible to stock products during the day?

Re: NYC to open municipal grocery store in 2027

#123

Post by halflife »

asdff wrote: post #114
halflife wrote: post #92

Earlier quoted context omitted.

That may be, but you can direct subsidies towards inverse relation to the store’s income. You can even add extra taxes for large chains. But as others said, groceries are working on minimal margin. And all of them work with the same wholeselles (except those with vertical integrations), and this is a nation wide problem.

>That may be, but you can direct subsidies towards inverse relation to the store’s income. You can even add extra taxes for large chains. Not really imo. Private market passes costs to consumers and leverages subsidy offers to achieve rat race outcomes out of competing local governments off each other. It is how you end up with the classic case of a city courting some business but offering enough tax abatement where…

Interesting. I think it really depends on the competitiveness of the market.

In a highly competitive market, every cost saved would be passed to the consumer, obviously this is simplistic microeconomics and doesn’t actually works this way.

In my city, there’s a supermarket approximately every 150 meters. Food cost is high, but for the entire country. Actually research shows that food cost is higher in low density towns where there is much less competition.

Re: NYC to open municipal grocery store in 2027

#124

Post by gruez »

asdff wrote: post #109
wahnfrieden wrote: post #101

Earlier quoted context omitted.

The consumer cost of overcharges from price-fixed bread in Canada was estimated at 4-5 billion dollars. And that's just bread. Is that negligible? Usually if someone steals a millionth of that, they go to jail for a very long time. The same players are now under investigation for selling underweight meats.

The whole egg fiasco is as far as I am concerned the biggest proof of price gouging cartel behavior there is. And people assume it is normal. Vast majority of product sold when inventory is low, they just go out of stock still at MSRP right to the last sku in the inventory. Then, you wait until more are available, also at that same price. Really, why would prices go up for the eggs in this situation if not for gougin…

>Really, why would prices go up for the eggs in this situation if not for gouging? [...]

Supply and demand. Just like blocking the Strait of Hormuz doesn't make oil 2x more expensive to produce everywhere else in the world, you're still left with the problem that the world has ~20% less oil to go around. That means the price of oil gets bid up until it's high enough to convince 20% of oil consumers to stop using oil.

Re: NYC to open municipal grocery store in 2027

#125

Post by pollorollo »

ceejayoz wrote: post #91
gruez wrote: post #89

Earlier quoted context omitted.

From your own article: >In 2024, DeCA estimated that it saved patrons $1.58 billion and had an operations cost of $1.7 billion, $1.5 billion of which was funded from appropriations.[8] Isn't this the "selling $1 for 75 cents" business model (aka moviepass) that people made fun of a few years ago?

Sure. It's also the business model of your local library.

I think this is the mindset required for this conversation. There is no way to make a library drive a profit, let alone financially self-sufficient. However, the library exists because the city values the externalities, specifically an educated public and reduced crime. For those purposes, libraries are incredibly cost efficient.

The same argument can be made for public grocers. Reducing poverty has cascading effects including better health and lower crime rates.

Re: NYC to open municipal grocery store in 2027

#126

Post by thinkingtoilet »

halflife wrote: post #115
thinkingtoilet wrote: post #32

Earlier quoted context omitted.

Oh no! Struggling Americans will be able to buy food cheaper! What will we do? Also, if anyone has any reservations about a government run grocery store, go ask your representatives to come out against military commissaries. I bet you will not be able to find one active politician who will try to remove that. You know why? Because government run grocery stores work. End of story. Period. There is no discussion. You a…

Grocery costs has to come from some formula. If the mamdani stores actually do sell at a lower cost, where did the discount come from?

Again. This exists. There is no theoretical here. Go look up how the military commissaries work. That will answer your question.

Re: NYC to open municipal grocery store in 2027

#127

Post by scoofy »

ceejayoz wrote: post #122
scoofy wrote: post #111

Earlier quoted context omitted.

It's a question of volume. If they're really going to sell things at a loss, then it should create real demand. If you have that demand, then you're going to start running out of groceries mid-day. At that point, the business sucks because you either have to show up at 10 AM to buy anything, or they start some ridiculous rationing program to prevent people and businesses effectively reselling at market rates, or they…

What if it was possible to stock products during the day?

It sort of doesn't matter. The point is that if the goods are being sold below market value then you will either have shortages, rationing, or accelerating losses. This has always been a problem in non-market socialism.

Re: NYC to open municipal grocery store in 2027

#128

Post by oa335 »

woodruffw wrote: post #68
oa335 wrote: post #54

This is Mamdani’s worst idea. Margins on most essential goods in grocery stores is incredibly low, sometimes it’s a loss leader. Does anyone know of any solid economic rationale for this move?

The underlying theory is to put these stores in areas that otherwise lack grocery store access, meaning they won’t compete with existing stores for small margins. Running at a (moderate) loss would also be politically acceptable; the city runs a lot of things at a loss for civic purposes and fills the gaps with taxes. (This is the theory, the practice will be challenged by NYC’s ability to acquire land in neighborhoo…

> The underlying theory is to put these stores in areas that otherwise lack grocery store access,

I’m generally partial to that motivation - however doesn’t seem to be happening here.

This location (La Marqueta) is within a couple hundred feet of a "City Fresh Market" grocery store and ~1500 from several other grocery stores

https://www.google.com/maps/search/grocery+store/@40.7983886...

Re: NYC to open municipal grocery store in 2027

#129

Post by Freedom2 »

DetroitThrow wrote: post #44
flats wrote: post #12

I was very skeptical of these plans at first—as a New Yorker, I don’t exactly have a lot of trust in our city’s government to run things well. But I’ve come around. Let’s try something new! Let’s show people that local governments in the United States really are capable of making a difference in their daily lives. If it fails, well, we tried & we’ll keep trying.

As an outsider, it will be interesting to see a pilot at minimum. I'd be hesitant for NYC if it rolled out massively expensive stores across the entire city without understanding if it succeeds at the small scale. I'm not sure why this succeeding or failing has to be viewed as a violation of a sacred value. Governments should do more experiments, and this does seem to have been thought out enough to not be a total wa…

I believe it's simple tribal behavior, combined with American blindness to a "free market". They'd rather be correct and put everything in a good / bad bucket instead of experimenting and learning from the experience.

Re: NYC to open municipal grocery store in 2027

#130

Post by yohannparis »

halflife wrote: post #108
bojan wrote: post #53

Earlier quoted context omitted.

But why does the availability have to be wide? Maybe those stories can do few things, but do them well. Sell staple foods and healthy choices.

Because than people won’t come to your store. People buy where they can purchase the maximum of their shopping cart in a single place. That is why you have loss leader grocers, where they pull people with dramatic discounts on specific items, but the total cart costs the same

I understand your point of view. But in cities of all sizes, it's easier to not have to do that. For example in NYC, a medium size city, you can easily go do your shopping in multiple places, and not at the same time.
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