New York City Mayor Zohran Kwame Mamdani on Monday unveiled a plan to offer a 30% discount on essential groceries at five city-backed grocery stores, prompting criticism from "Shark Tank" investor Kevin O'Leary, who said taxpayers would ultimately bear the cost.

In a post on X, Mamdani said shoppers at the city's planned municipal grocery stores would receive a 30% discount on eggs, milk, chicken, fresh produce and other everyday essentials.

"In the wealthiest city in the richest country in the world, no one should have to wonder how they'll afford the food they need to feed themselves or their families," Mamdani wrote.

O'Leary pushed back on the proposal in a separate post on X, arguing the economics behind the plan would not work.

"Margins in grocery are 2-3% pre-tax margins so reducing selling prices by 30% across the board will guarantee that the stores will lose money on every sale," O'Leary wrote. "Who will pay for those losses? You the NYC taxpayers."

Grocery Plan

According to a City Hall announcement, the 30% discount will apply to a basket of everyday groceries, including fresh produce, meat, seafood, dairy products and pantry staples. City officials estimate the initiative could reduce an average household's grocery bill by about 15%, or roughly $90 a month.

The city also issued a request for proposals seeking private operators to manage one or more of the five municipal grocery stores. Under the plan, operators would oversee merchandising, staffing, product sourcing and day-to-day operations while adhering to city standards.

The first store is expected to open in Hunts Point in the Bronx by the end of 2027, with one location planned for each borough by the end of Mamdani's first term. The administration has allocated $70 million in capital funding for the initiative.

Growing Debate

The proposal has faced criticism since it was first introduced earlier this year. Economist Peter Schiff previously argued government-backed grocery stores would be less efficient than private retailers because grocery profit margins are already thin and taxpayer subsidies could ultimately be required.

Mamdani rejected that criticism at the time, saying city-owned grocery stores would provide affordable prices while treating workers with dignity, adding, "I look forward to the competition. May the most affordable grocery store win."

Broader Criticism

O'Leary has repeatedly criticized New York City's economic policies in recent months. Earlier this year, he argued higher taxes on wealthy individuals would not solve the city's fiscal challenges, describing New York as inefficient and saying government spending, rather than tax revenue, is the bigger issue.