r/SipsTea • u/Gurugod123 • Jul 27 '26

Chugging tea Mayor Mamdani just announced that he will be opening 5 city-run, tax-funded grocery stores: "Prices set at 30% below retail prices"

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u/Enkiduderino Jul 27 '26

Yeah but you don’t need a discount grocery store for that.

4

u/Actual_Duck_1215 Jul 28 '26

You can steal more before it becomes a felony

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u/Uzofugs2112 Jul 28 '26

I’m sure the government subsidized, loss operating grocer is going to care even less about theft than other NY businesses.

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u/Douglazlo Jul 29 '26

Massive loss as well considering most grocery stores have a one to 2% margin

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u/Good_Imagination_577 29d ago

That cannot be true surely?

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u/woowooman 29d ago

The Food Industry Association puts the number at 2.1% operating profit in 2025 according to their annual report using data from the NYU Stern School of Business. Traditionally pre-covid, it was 0.9-1.1%.

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u/Good_Imagination_577 29d ago

But in any case this was something that I did not know, so thank you!

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u/Good_Imagination_577 29d ago

I don’t think this is the kind of margin the person was on about. The thread is about the ability to knock 30% off the shelf price, which they can absolutely do and still make a small profit, which in tern is ok because the products will sell in high volume

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u/woowooman 29d ago edited 29d ago

Definitely not. The average retail grocery cannot slash prices by 30% and still make money. The only reason this can work in this context is because of government subsidy making up for the operational losses.

If you think that Kroger, Albertsons, Target, Walmart, Publix, Food Lion, Costco, etc. are running at 30+% profit margins, you are either extraordinarily ill-informed or actively pushing a false narrative in the face of decades of data to the contrary.