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- The Multicultural Business Coalition filed a lawsuit Monday against the Mamdani administration.
- Plaintiffs say that planned city-run supermarkets will spark unfair competition with small grocers.
- Mamdani plans to open five stores by 2029, pledging $70 million to the project.
A group of New York City businesses filed a lawsuit Monday morning against Mayor Zohran Mamdani's city-run grocery store initiative, alleging that the supermarkets will cause "unfair competition" with local vendors.
The plaintiffs, an organization called the Multicultural Business Coalition, are calling for a halt to all city-run grocery store rollout activity until the administration has undertaken additional land use review, study, and analysis to protect small grocers and bodegas.
Mark Jaffe, a founder of the MBC, told Business Insider that he views the city-backed stores as unfair to local businesses. He said more grocers and trade groups have expressed interest in joining the suit.
"We want to sit down with the mayor," Jaffe said before the lawsuit was filed. "We want to show him a better way."
The suit says the Mamdani administration's five planned stores — set to open by 2029 — will not meaningfully address affordability, and that the city's site selection for the stores fails to consider neighborhood needs.
The East Harlem La Marqueta location, for example, is surrounded by several Hispanic- and Korean-owned supermarkets, many of which said they will be unable to match the city's planned 30% discount on core goods. The city supermarkets will also have rent subsidized by the Economic Development Corporation.
Leaders from the EDC — the quasi-public arm of NYC's government that manages city-owned property — said the city is using a combination of factors to choose city-run store locations, such as existing city-owned property, transit access, local income levels, and population density, but did not share specific criteria.
EDC leaders added they are considering offering subsidies to some local NYC grocers to alleviate their fears about competition from the new city-run stores, but none have been announced.
At an August 24 press conference, Mamdani told reporters that "I'm confident in both the legality of this — that it will stand up in court — and the importance of delivering it."
Various small business owners Business Insider spoke with said they appreciate that the Mamdani administration is addressing food insecurity in the five boroughs, especially because food costs in US cities have jumped 25% in the past five years, but they oppose the city-run supermarket initiative. Mamdani has pledged $70 million to cover the costs of opening the five stores, with the first Bronx location set to open in 2027.
"The overwhelming consensus, regardless of class or party affiliation, is that affordable food is an excellent idea," the lawsuit says. As Jaffe put it to Business Insider, "Our argument, and we've spoken to many people in the legal field, is that this is not a well-planned way to feed people."