NYC Bodegas Sue Mamdani Over City-Run Grocery Plan

A group of New York City small businesses sued Mayor Zohran Mamdani on Monday, asking a court to block the administration's plan to open five city-run grocery stores.

The Multicultural Business Coalition, which represents bodegas and independent grocers across the five boroughs, filed the suit in state court. The group argues the city supermarkets create "unfair competition" by using taxpayer money to undercut private stores. They want all rollout activity stopped until the city completes a formal land use review.

Mark Jaffe, a founder of the coalition, told Business Insider last week that bodegas have survived for generations. City-backed stores are "a new challenge, an unfair challenge." He did not respond to a request for additional comment Monday. He previously said his organization "may have to file some paperwork" to get the mayor's attention.

Jaffe said the coalition wants to negotiate. "We want to sit down with the mayor," he said. "We want to show him a better way."

The lawsuit argues that Mamdani's five planned stores will not "meaningfully regulate affordability." The first is set to open in the Bronx in 2027, with all five operating by 2029. The filing calls the city's site selection process "arbitrary" and says the administration ignored whether neighborhoods already had enough grocery options.

The East Harlem La Marqueta location is one example the suit cites. That site sits near "a considerable number of successful Hispanic and Korean-owned supermarkets, with whom La Marqueta will be in competition," according to the filing. The plaintiffs said those smaller stores cannot match a planned 30% discount on core goods, especially because the city's stores will get subsidized rent through the Economic Development Corporation.

EDC leaders said they are weighing subsidies for some local grocers to ease the competitive pressure. No program has been announced. The quasi-public agency that manages city property said it chose store locations based on existing city-owned sites, transit access, income levels and population density. It declined to share the specific weighting of those factors.

Mamdani has pledged $70 million to open the five stores. At an August 24 press conference he said he remains "fully confident in both the legality and the importance" of the plan. He told reporters it will "stand up in court."

Several small business owners who spoke with Business Insider said they support the goal of addressing food insecurity. Grocery costs in U.S. cities have jumped 25% over five years. The city-run model itself drew their opposition.

The overwhelming consensus, regardless of class or party affiliation, is that affordable food is an excellent idea.

The lawsuit itself says that. Jaffe made a similar point about the execution.

"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," he told Business Insider.

The case was filed in New York State Supreme Court in Manhattan. No hearing date has been set.