NYC Grocers Sue to Block Mamdani’s $70 Million City-Owned Grocery Store Plan

A coalition representing hundreds of New York City grocers and bodegas has filed two lawsuits seeking to block Mayor Zohran Mamdani’s $70 million plan for five city-owned grocery stores, arguing that public support for the program will place immigrant and minority-owned businesses at an unlawful disadvantage.

The Multicultural Business Coalition filed the cases Monday in New York State Supreme Court in Manhattan. One proposed class action raises civil rights and equal protection claims. A separate Article 78 petition challenges the city’s decision to move forward with the grocery program and asks a judge to stop it until additional review is conducted.

Mamdani’s NYC Groceries program calls for one city-owned supermarket in each borough. The administration says a core group of groceries, including fresh produce, meat, seafood, dairy products and pantry staples, will be priced 30 percent below typical retail prices. City officials estimate the discounts could reduce an average household’s grocery bill by about $90 a month.

The city would own the stores and provide the locations, while private grocery operators would handle day-to-day operations. The first store is expected to open in Hunts Point in the Bronx by the end of 2027, with another planned for La Marqueta in East Harlem.

The coalition argues the municipal stores will receive financial advantages that independent supermarkets and bodegas cannot match. Court filings claim many member businesses operate on narrow margins and would have to compete with publicly supported stores offering steep discounts. The group also argues that the city failed to adequately study the effect on nearby businesses, including Hispanic and Korean-owned supermarkets near the planned La Marqueta location.

Mamdani has rejected the claim that five city-owned stores would threaten New York City’s broader grocery market. He said Monday that he is confident the program is legal and pointed to the city’s more than 1,000 existing grocery stores. The mayor has also cited subsidized public markets that already operate near private grocers.

The Article 78 petition gives the coalition a way to challenge how the city reached its decision. Under New York law, an Article 78 proceeding allows courts to review certain actions by government agencies and public officials, including claims that officials exceeded their authority or acted in a way that was arbitrary and capricious.

That review centers on whether the government acted within its legal authority and had a rational basis for its decision. The coalition claims the city moved forward without enough analysis of how subsidized grocery stores could affect existing businesses and is asking the court to require further review before the stores open.

The separate proposed class action focuses on civil rights and equal protection. It alleges that the program unlawfully disadvantages immigrant and minority-owned grocers because those businesses cannot offer discounts comparable to stores supported by public money.

Equal protection generally requires state and local governments to provide the legal protections guaranteed by state and federal law without unlawful discrimination. New York’s Constitution also protects against discrimination based on characteristics including race, ethnicity and national origin. To prevail on that theory, the coalition would have to connect the alleged economic harm to unequal treatment prohibited by law.

The city is continuing with plans for NYC Groceries while the cases move through court and is seeking private operators for the stores. The first Hunts Point location remains scheduled to open by the end of 2027. No court has ruled on the coalition’s requests to stop the program.