Grocery store gripes

A look at the Park Slope Food Coop's operations and what that means for Zohran Mamdani's city-owned grocery store policy

Published on 11 April 2025.

Prelude

The Park Slope Food Coop (just “the Coop” for the rest of the post) is a member-owned and operated food store located in Brooklyn, of which I am a member-owner.

Zohran Mamdani is a Democratic primary candidate in the 2025 New York City mayoral election. The fourth policy on his platform is “city-owned grocery stores.”

The Coop and the municipal grocery store proposal are both alternatives to typical profit-oriented grocery stores, aimed at lowering the price of grocery stores for its shoppers. The Coop’s model rocks 🤘 The municipal grocery store proposal… needs way more information to convince me it’s viable.

Coop deets

Before we get into the details, I’m putting it out there that I am biased against the concept of municipal grocery stores. I am much more interested in things like worker-owned co-ops than in government ventures. While the Coop is a member-owned co-op, the members do work, and I think that’s critical to the success of the Coop.

Quick (mostly) facts about the Coop:

It currently has around 16,000 members.
Members (with some exceptions for disability, age, tenure, and committee appointments) need to work a 2.75 hour shift every six weeks. Shifts can be banked.
Regular members contribute about 75% of the labor, while paid staff (who are typically also members) contribute the rest.
It has around 70(?) paid staff. (I can’t find a pandemic-era source on this)
It pays $35.93 per hour for Receiving Coordinators (and based on previous job listings, I believe all employees make at least $30 per hour).
It owns the building it’s in, and has since 1980.
The current markup for most items is 25% (21% for members who receive income-based assistance), compared to 30–80% at commercial stores.
Items at the Coop are 3–34% cheaper (depending on the type of item) than comparable items at a nearby commercial grocery store.
It accepts SNAP, but not WIC.
The Coop sells almost $10,000 worth of product per square foot of retail space. Nationwide, chains top out at around $2,400 per square foot, though I’m sure that’s higher for NYC locations.

From the latest audited financial statement,

The Coop’s property and equipment are worth around $9 million, before depreciation. The property accounts for around $6.3 million of that. After depreciation, the property and equipment are worth around $3 million.
The Coop’s net sales were around $55 million. For 16,000 members, this is an average of about $3,400. (Note: Members who don’t work enough shifts can’t shop until they do work enough shifts, so the average for members in good standing is probably higher)
The Coop spent around $44 million to purchase the goods it sells. This works out to an average markup of 24.5%.
The Coop’s operating expenses related to personnel (salaries and wages, payroll tax, and benefits) are also around $9 million. Just the salary and wages are around $5.5 million.
- Quick check: $5.5 million ÷ ($35 per hour per employee × 40 hours per week × 52 weeks per year) ≈ 75 employees. General coordinators and the IT team are salaried and get paid more, so around 70 employees sounds about right.
The Coop’s total comprehensive income was around $470,000.

Overall savings for members

Using the savings data in the Linewaiters’ Gazette article and the Consumer Price Index for All Urban Consumers (CPI-U): U. S. city average, by detailed expenditure category table, and assuming Key Foods represents typical prices, I estimate this to be overall 23.2% cheaper, for the categories detailed in the article. The estimate for just the food is 21.7%.

Coop category	Coop savings over Key Foods	CPI category	CPI Relative importance January 2025
Household	34%	Housekeeping supplies	0.802
Dairy	31%	Dairy and related products	0.738
Beverages	30%	Nonalcoholic beverages and beverage materials	0.910
Cans and Jars	29%	Processed fruits and vegetables	0.221
Snacks	29%	Snacks	0.366
Produce	24%	Fresh fruits and vegetables	1.115
Condiments	22%	Spices, seasonings, condiments, sauces	0.386
Grains	20%	Cereals and cereal products	0.332
Bakery	17%	Bakery products	0.769
Meat	3%	Meats	0.915

To get those estimates, I took each row of the table and multiplied the savings by the relative importance, and summed up those numbers. Then I divided that by the sum of the relative importances in the table.

So a Coop member spending the average $3,400 and buying the in similar proportions as the CPI’s basket of goods saves around $1,000 a year, or around $19.50 a week.

Using the Economic Policy Institute’s Family Budget Calculator, in the New York metro area, a single adult with no children following the U.S. Department of Agriculture’s national “low-cost” food plan needs $5,107 for food a year. A 21.7% discount is around $1,400 per year, or $27 per week. Two adults with two children need $14,762. A 21% discount is around $2,000 per year per adult, or $39 per week per adult.

A common criticism of the Coop that I’ve seen online is that only higher-income people can afford the time spent working shifts.

First, the Coop accepts SNAP and I know there are members who receive the reduced markup (the Coop is running its first demographic survey, so we might know more about the member income distribution soon).

Second, if a typical member saves around $19.50 a week for just under half an hour of work per week, they are effectively earning a tax-free $40 per hour for their shift. This jumps to almost $80 per hour per adult for the two adults with two children. As someone who grew up low-income, that’s so worth the time!

Mamdani’s grocery stores

My biggest general gripe about Mamdani is that there is so little information on his website about his platform. Maybe he’s giving a lot of interviews, maybe he’s posting a lot of TikToks. But if something’s not on his website, it might as well not exist to me.

Here is the full text of his “city-owned grocery stores” proposal as of Invalid Date:

Food prices are out of control. Nearly 9 in 10 New Yorkers say the cost of groceries is rising faster than their income. Only the very wealthiest aren’t feeling squeezed at the register.
As Mayor, Zohran will create a network of city-owned grocery stores focused on keeping prices low, not making a profit. Without having to pay rent or property taxes, they will reduce overhead and pass on savings to shoppers. They will buy and sell at wholesale prices, centralize warehousing and distribution, and partner with local neighborhoods on products and sourcing. With New York City already spending millions of dollars to subsidize private grocery store operators (which are not even required to take SNAP/WIC!), we should redirect public money to a real “public option.”

He also links to a New York Times article from Invalid Date, N.Y.C. Grocery Prices Are High. Could City-Owned Stores Help?, that states that he would “announce a plan on Thursday to build five municipal grocery stores — one in each borough.”

Also from the article:

In Chicago, Mayor Brandon Johnson, a progressive Democrat, is finalizing a plan for city-owned grocery stores. A 105-page feasibility study found that the idea was “necessary, feasible and implementable.”

Showing my work

Let’s imagine what an extremely well-run pilot store could look like. Assume:

Employees are all full-time hourly employees who are paid $30 per hour and receive benefits equivalent to Coop employees’. The Coop’s non-wage personnel expenses account for around 38% of personnel costs.
All shoppers buy their groceries exclusively from the store
Each shopper buys an equivalent of $5,250 worth of food at a commercial store. This number is from splitting the difference between value for two adults and one child ($11,637) and for two adults and zero children ($9,363) using the EPI’s Family Budget Calculator set to the New York metro area. According to the Population FactFinder, NYC has a child dependency ratio of 30.2.
Wholesale prices is a discount of 21.7% from the Coop savings + 25% from the Coop markup, so 41%, off the equivalent commercial store price
Non-personnel operating expense (electricity, HVAC, garbage disposal, etc.) of $1,000,000

To estimate the number of shoppers and employees, we can choose two methods which give us roughly the same result.

Method 1 is to make extrapolate from what we know of the Coop. Let’s assume fewer exclusive shoppers than members, since most Coop members don’t shop exclusively at the Coop, so 10,000 shoppers. Let’s assume more employees than the Coop has, but assume that each full-time employee is three times as efficient as a member working a shift, so 150 employees.

Method 2 is to use the original 2008 report, New York City’s Neighborhood Grocery Store and Supermarket Shortage, that was the basis for the FRESH program. The report states that the optimal ratio of neighborhood grocery stores to New Yorkers is 30,000 square feet per 10,000 people in a neighborhood. It also states that an average 30,000 square foot store provides between 100 and 200 jobs. So again, let’s assume 10,000 shoppers and 150 employees.

For the 10,000 exclusive shoppers of this store, the store spends around $30,800,000 to purchase goods.

For the 150 employees of this store, the store pays them a total of $9,360,000 in wages, plus $5,730,000 in benefits and payroll tax. This is a total operating expense of around $16,000,000.

If the store is supposed to be self-sufficient, they would need to charge a markup of around 52% just for the operating costs, which leaves shoppers saving on average around $570 a year. That’s more than double the Coop’s markup, and in line with regular grocery stores.

Truly self-sufficient stores would also need to charge additional markup for rainy day funds, unless the plan is to have taxpayers pay for every unexpected cost that comes up, in which case that does not bode well for the longevity of these stores passed one administration.

If instead taxpayers pay the operating expense of $16,000,000, shoppers on average could save $2,170 a year. If that $16,000,000 just went directly to those shoppers, they’d be receiving a guaranteed $1,600.

And that’s just for the annual operating expense of one store. The initial proposal is for five stores, so taxpayers would be paying $80 million to benefit just 62,500 residents (50,000 shoppers + their children). That’s around 0.76% of the city population.

In reality, it takes time and money to conduct (and hopefully publish) a feasibility study, get approval for development proposals and building permits, purchase land, construct or renovate a building, purchase equipment, source vendors, hire and train employees, and build up a customer base. It will take years before the stores are up and running, let alone operating near full capacity (if that ever even happens).

The New Republic’s article mentions “$60 million to launch a store in each of the five boroughs.” It’s unclear what that $12 million per store covers and whether the stores are expected to pay back that money. As mentioned, the Coop’s property and equipment is worth almost $9 million before depreciation, and the Coop is only one-fifth the size of FRESH’s target supermarket. And city infrastructure projects are not known for running on-time and within-budget.

Splitting that $60 million amongst 50,000 people would give them each $1,200, more than they would save in two years shopping at the self-sufficient option.

So we should never try anything?

No, my point is that I want Mamdani to have more than a concept of a plan and to explain it clearly on his website. I’d be a lot less annoyed if he presented a plausible roadmap and budget for these stores.

But the lack of details around the policy means that people can only speculate on the details. At best, the campaign hasn’t done the work to provide a viable plan of action. At worse, they are being intellectually dishonest by letting people believe what they want to believe about the proposal. I choose to believe it’s the former.

As it stands, this blog post has like 20 times more words about the topic than Mamdani’s website does, and I’m worried that I’ve spent more time thinking about this than he has.

I think services and infrastructure improvements are very important! But a cheaper grocery store is inherently a very localized project (unless you want people traveling long distances, potentially by car, to get those cheaper groceries).

There are probably lots of policies that are easier to implement and more effective at making groceries more affordable for more people than “city-owned grocery stores.” But they’re also probably more boring.

Mamdani accurately identifies a lot of pain points New Yorkers are having right now. I’m not confident in his ability to spearhead policy that is effective or efficient, in terms of money or political capital.

Ultimately, I believe we should let domain experts shape policy.

So how can we make food more affordable?

idk, I’m just a rando on the Internet! Let the realheads figure that out.

Here are some ideas that I’d like to see explored (by someone who isn’t me — I am out of my lane, bothered, desiccated):

Initiatives to make it easier for member-operated food co-ops to get started and continue to exist. This can include things like:
- Priority approval in land use decisions
- Underwriting loans and insurance
- Bullying payment-processing companies into lowering their debit card transaction fees
Require that all grocery stores accept SNAP and WIC, and make it easy for them to do so.
Municipalize services that other cities have already succeeded at providing, like internet and electricity.
Public option for high quality health care plans. Require that all local health care providers accept this option for payment.

Perhaps this can be funded by payroll taxes? Health benefits account for almost 24% of the Coop’s personnel expenses. The city could negotiate better prices than any individual business, so I think this could still be cheaper for businesses overall.
Wealth tax and more progressive income tax brackets. Redistribute this as unconditional cash transfers.

It’s ridiculous to collect city income tax from people making less than a living wage. It’s also ridiculous that the highest bracket for single filers starts at less than $60,000, and that the rate for that bracket is less than one percentage point more the lowest bracket.

Bonus round: ranking

The New York City mayoral primary elections use ranked choice voting, with voters being able to rank up to five candidates.

In the 2021 Democratic mayoral primary, Kathryn Garcia lost to Eric Adams by 7,197 votes in the final round. There were already 5,314 exhausted ballots before the fifth round.

I cannot stress this enough, everyone should use all five of their available choices! Andrew Cuomo is leading the race in name recognition at the moment. If you don’t want Cuomo to win, use all five choices!

The Working Families Party endorses Adrienne Adams, Brad Lander, Zohran Mamdani, and Zellnor Myrie. UAW Region 9A endorses Brad Lander, Jessica Ramos, and Zohran Mamdani.

Here’s my current ranking:

I encourage everyone to read up on the candidates and use all five choices!