Dive Brief:
- A group representing smaller grocery stores in New York City on Monday filed a state lawsuit that seeks to block the city and its mayor from developing a fleet of five municipally owned supermarkets. The Multicultural Business Coalition’s suit, filed in New York State Supreme Court, alleges that the city did not undertake “a study and proper review” of how the municipal supermarket plan would impact independently owned retailers.
- In a second suit filed with the same court on Monday, the group alleged that the municipal grocery store program violates its members’ civil rights under state law.
- New York City Mayor Zohran Mamdani, who is named in both suits, has positioned the municipal supermarket plan as central to his administration’s efforts to make living in the city more affordable.
Dive Insight:
The city’s N.Y.C. Groceries initiative would pose insurmountable competition to minority-owned grocery stores and force many out of business, the Multicultural Business Coalition alleged in the suit that seeks to stop the program.
The group asked the court to halt the initiative until the city and Mamdani “have undertaken the necessary land use review, study and analysis” to protect its members.
Formed earlier this year, the Multicultural Business Coalition describes itself as “a not-for-profit entity with thousands of business members, hundreds of whom own small grocery stores in the City of New York.” Grocers that belong to the group are “barely making profits,” the organization said in the suit.
Smaller grocers in the city are “predominately owned by minority groups that are historically excluded by the City of New York from economic opportunities,” the Multicultural Business Coalition claimed in the suit.
Mamdani defended the grocery store plan during a news conference on Monday. “I continue to be fully confident in both the legality and the importance of our initiative to deliver five city-run grocery stores,” he said.
Under the N.Y.C. Groceries program, which Mamdani promised to undertake during his election campaign last year and unveiled in April, New York City intends to open one supermarket in each of the city’s five boroughs. The first store is set to open in 2027 in The Bronx.
Underscoring his goal of using the stores to help shoppers save money on groceries, Mamdani said in July that the city intends to guarantee customers a 30% discount on essential items including milk, eggs, chicken and fresh produce.
The coalition alleged in its suit claiming that the city’s plan to develop grocery stores is a civil rights violation that its members are “being denied equal protection, as they are not able to offer discounts that markedly depart from globalized commerce.”
The New York City Economic Development Corporation, which is spearheading the N.Y.C. Groceries project, plans to select one or more third-party operators to run the stores.
