08-07-2025
- Business
- Wall Street Journal
Walmart Beats a Government Grocery Store
Zohran Mamdani, the Democratic nominee for New York mayor, has a plan to address food access and grocery prices: Spend about $300 million to open a government-owned and -operated grocery store in each of the city's five boroughs. Mr. Mamdani views this initial foray as a pilot program he hopes to expand so that 'every New Yorker can afford the groceries that they need.'
Here is a far better idea: Let Walmart into New York and save shoppers thousands on their grocery bills. The retail company has a presence in all 50 states and has sought for years to come to the city. But it has been rebuffed by claims that it will threaten local businesses and reduce wages. No doubt Walmart is a tough competitor that seeks to cut costs relentlessly, and other stores that can't keep up are in trouble. But that is what Mr. Mamdani needs if he wants to cut New Yorkers' food costs.
Mr. Mamdani's theory is that public grocery stores will set prices lower because they'll be spared a lot of the costs regular grocers face. 'Without having to pay rent or property taxes, they will reduce overhead and pass on savings to shoppers,' his platform reads. 'They will buy and sell at wholesale prices, centralize warehousing and distribution, and partner with local neighborhoods on products and sourcing.' So Mr. Mamdani's public supermarkets, spared of many costs incurred by their competitors, will also threaten local businesses. And who will make up the hole created in the city's tax base?
A handful of city-owned groceries will never be able to match the efficiency and buying power of Walmart, which operates more than 10,750 stores in 19 countries, just under half of them in the U.S. Walmart operates compact supply chains, eliminating intermediaries that perform no essential functions but add to costs.
