Mamdani’s Bodega Bailout

By Noah Rothman

Thursday, August 20, 2026

 

New Yorkers were treated to a vivid illustration of the delusions fueling Mayor Zohran Mamdani’s push to get his city-run grocery stores up and running.

 

This week, bidders toured the empty lot in East Harlem where Mamdani plans to build one of his two proposed state-owned markets. There, as the New York Post reported, business consultant Philip Grant lectured reporters on the need for the state to address the expansive “food deserts” that plague the city.

 

From there, the Post’s intrepid reporters sauntered over to the deli located just a “stone’s throw” away from the lot, where they found a small-business owner overcome with trepidation over the city’s efforts to crush his livelihood. “I’m lucky I have the beer!” the bodega proprietor quipped. “They won’t have beer over there.” At least he’s still thinking in terms of comparative advantage.

 

Last month, Democratic Socialists of America co-chair Gustavo Gordillo appeared to welcome the financial hardships Mamdani sought to impose on the owners of that most American of conventions, the corner store. “If one publicly owned store is enough to put someone out of business,” the wastrel beneficiary of his parents’ industry mused, “then maybe they shouldn’t have been in that business in the first place.”

 

If driving the city’s entrepreneurs out of business wasn’t Mamdani’s plan, it’s hard to tell. If the city successfully stands up his five planned stores (and for a steal at just $70 million in taxpayer dollars) that provide subsidized goods at a 30 percent discount, it will bankrupt the stores that sell their products at market rates. But as those stores close, scarcity rises. If the law of supply and demand has not been repealed by then, we can expect the cost of goods to rise commensurately. And, as Forbes contributor Nathan Goldman observed, “if the fair market value of groceries rises due to bodegas closing, the 30% discount may not end up being a discount at all.”

 

The city’s small-business owners have noticed the target their socialist saviors affixed to their backs, and they are none too happy about it. Some plan to take their grievance to court. As much as Mamdani’s administration might want to turn their backs on them, they cannot. So the city has been forced into the most bizarre compromise. Mamdani is dead-set on his city-run grocery stores, but he’s going to preemptively bail out the businesses whose bottom lines will be crushed by his fantasy.

 

This week, the city’s Department of Small Businesses announced an $8.4 million block of grants for small businesses, including bodegas. While a healthy portion of that cash will be dedicated to beautifying the areas surrounding small businesses and “merchant organizing” initiatives, Mamdani himself added that the grants will support operations for stores like bodegas. “This $8.4 million investment will keep our sidewalks clean, our public spaces bright, and give more small business owners the resources they need to grow,” the mayor claimed.

 

Another way to help those businesses grow would be to let them compete in the market, not temporarily distort it with taxpayer-subsidized goods for just long enough to make private enterprise unprofitable.