NYC businesses sue Mamdani over city-run grocery store plan, citing 'unfair competition'

One of Mayor Zohran Mamdani's buzziest affordability promises is to open five city-run grocery stores.

Bloomberg/Getty Images 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 the necessary land use review, study and analysis" needed to "protect Petitioner's members," including many small grocers and bodegas .

Mark Jaffe, a founder of the MBC, told Business Insider last week that "the challenges that bodegas face, they're overcoming that — they have for generations." City-backed stores are "a new challenge, an unfair challenge." He did not immediately respond with additional comment on the lawsuit, but previously said his organization "may have to file some paperwork" to get the Mamdani's attention.

"We want to sit down with the mayor," Jaffee said.

"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 regulate affordability" and that the city's site selection for the stores is "arbitrary" without consideration of neighborhood needs .

The East Harlem La Marqueta location, for example, is surrounded by a "considerable number of successful Hispanic and Korean-owned supermarkets, with whom La Marqueta will be in competition," according to the suit.

Plaintiffs said these smaller stores will not be able to match Mamdani's planned 30% discount on core goods in the city-run stores, especially because 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.