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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

#91

Post by ceejayoz »

gruez wrote: post #89
pollorollo wrote: post #83

Earlier quoted context omitted.

Government owned grocery stores already exist [1]. They are run by the U.S. military, have 200+ locations, and charge at least 25% less than other brands [1]. "Surveys consistently rate the commissaries as one of the military's top non-pay benefits." NYC wants to provide similar benefits for residents. [1] https://en.wikipedia.org/wiki/Defense_Commissary_Agency [2] https://www.youtube.com/watch?v=PQOXdtPBGXI

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.

Re: NYC to open municipal grocery store in 2027

#92

Post by halflife »

asdff wrote: post #5
halflife wrote: post #3

This sounds extremely non economically viable. The municipality which has monopoly on land taxes and costs will compete with stores that must pay taxes and rent? Won’t it just cause neighboring stores to close? Won’t a better option be subsidizing taxes for grocery stores, and let the discounts competitively pass unto the customers?

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.

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.

Re: NYC to open municipal grocery store in 2027

#93

Post by asdff »

gruez wrote: post #84
asdff wrote: post #66

Earlier quoted context omitted.

Margins being low is fine when you've scaled across a nation. Annual gross profit for Kroger is $34b.

>Annual gross profit for Kroger is $34b. What's the point of this observation other than for shock value? Yes, when you multiply small percentage by a huge number, you're still left with a huge number. That doesn't mean it's suddenly worth doing unless you can make the argument that it scales easily.

It represents the privatized waste figure out of your grocery bill that is not going to the food you are bringing home.

Re: NYC to open municipal grocery store in 2027

#94

Post by SpicyLemonZest »

darth_avocado wrote: post #15
halflife wrote: post #3

This sounds extremely non economically viable. The municipality which has monopoly on land taxes and costs will compete with stores that must pay taxes and rent? Won’t it just cause neighboring stores to close? Won’t a better option be subsidizing taxes for grocery stores, and let the discounts competitively pass unto the customers?

> Won’t it just cause neighboring stores to close? Hopefully they kept all those profits around from the time they price gouging consumers in the name of “supply chain issues”, “transitory inflation”, “bird flu” etc. I still remember all the headlines about bird flu and how egg prices were doubling because of it. Turns out the egg production barely dropped and it was all a ruse to make more money.

You can't conclude it was a ruse without knowing the elasticity of egg demand!

This is ultimately the kind of thing that worries me about a municipal grocery store. Will voters allow it to respond in rational ways to market conditions, or will they expect the city to go out and extort some egg suppliers when market prices rise above what they consider reasonable?

Re: NYC to open municipal grocery store in 2027

#95

Post by RickJWagner »

tacostakohashi wrote: post #81
hnthrowaway0315 wrote: post #76

Earlier quoted context omitted.

I have a feeling that those slim margins don't really mean that Walmart is making e.g. 3 bucks on every 100 bucks ( https://www.macrotrends.net/stocks/charts/WMT/walmart/profit... ). There gotta be a lot of accounting magics working here. Otherwise you can't explain why they simply don't sell everything and buy bonds. I don't have a theory so hopefully some finance people can explain.

If they can make 3 bucks per hundred of sales, and do that more than once per year... then that beats a bond that pays only 3 percent per year...

Found the economist. Or maybe the mathematician, I’m not sure. Astute.

Re: NYC to open municipal grocery store in 2027

#96

Post by ceejayoz »

thelastgallon wrote: post #38

Don’t do these kinds of idiotic things. Do what Singapore does for housing.

Singapore's largest grocery chain is a co-op run by the country's labor unions, which are closely aligned with the government.

https://en.wikipedia.org/wiki/NTUC_FairPrice

Re: NYC to open municipal grocery store in 2027

#97

Post by halflife »

bastawhiz wrote: post #25
halflife wrote: post #3

This sounds extremely non economically viable. The municipality which has monopoly on land taxes and costs will compete with stores that must pay taxes and rent? Won’t it just cause neighboring stores to close? Won’t a better option be subsidizing taxes for grocery stores, and let the discounts competitively pass unto the customers?

> and let the discounts competitively pass unto the customers This is the same trickle down economics principle that has proven not to work over, and over, and over again. There's exactly zero reason to believe these businesses would pass on the savings to consumers. Consider! Ingles (a supermarket brand here in NC) is criticized for holding huge amounts of abandoned/vacant/dilapidated properties [0], which stifles c…

I didn’t specify on the subsidies themselves.

You can create subsidies which are inverse to the stores income. It doesn’t HAVE to go to large chains. There are many way to encourage small businesses to open. Competing with them is not one.

Re: NYC to open municipal grocery store in 2027

#98

Post by asdff »

woah wrote: post #23
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.

Oh, that must be why the grocery business is wildly profitable

You know what they say about massively consolidated multinational corporations with tens of thousands of employees and millions of square feet in real estate: no one making money there.

Re: NYC to open municipal grocery store in 2027

#99

Post by Molitor5901 »

If you're interested in grocery store economics, I strongly recommend:

The Secret Life of Groceries: The Dark Miracle of the American Supermarket by Benjamin Lorr, and

Grocery: The Buying and Selling of Food in America by Michael Ruhlman

Extremely insightful about how much it cost to run a grocery store, where profits go, who the food suppliers really are, etc. Very eyeopening.

Re: NYC to open municipal grocery store in 2027

#100

Post by ceejayoz »

SpicyLemonZest wrote: post #94
darth_avocado wrote: post #15

Earlier quoted context omitted.

> Won’t it just cause neighboring stores to close? Hopefully they kept all those profits around from the time they price gouging consumers in the name of “supply chain issues”, “transitory inflation”, “bird flu” etc. I still remember all the headlines about bird flu and how egg prices were doubling because of it. Turns out the egg production barely dropped and it was all a ruse to make more money.

You can't conclude it was a ruse without knowing the elasticity of egg demand! This is ultimately the kind of thing that worries me about a municipal grocery store. Will voters allow it to respond in rational ways to market conditions, or will they expect the city to go out and extort some egg suppliers when market prices rise above what they consider reasonable?

The DOJ thinks it was a ruse.

https://www.reuters.com/legal/government/us-egg-producers-fa...

As did a jury:

https://apnews.com/article/egg-producers-price-gouging-lawsu...

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