There's a new voice in the debate over New York City's plan to open government-run grocery stores, and it comes from someone who actually knows a thing or two about selling groceries. Rep. Mike Rulli (R-Ohio), whose family runs the Rulli Brothers grocery chain, isn't mincing words about Mayor Zohran Mamdani's proposal.
In an interview with Fox News on Wednesday, Rulli said the city's $70 million plan to open one municipal grocery store in each of the five boroughs is a recipe for disaster. He argued that government-run stores would struggle to compete because grocery stores operate on razor-thin profit margins, and the losses would ultimately fall on taxpayers while squeezing out neighborhood retailers.
Rulli Says Grocery Economics Don't Work
"That supermarket will just bleed red the entire time it's open, from the first time you turn the key until it closes," Rulli said. "And I would bet the farm there's no way these grocery stores last more than five years. They might not even last a year."
Drawing on his family's experience in the grocery business, Rulli said municipal stores would place hundreds of independent retailers at a disadvantage.
"You will put hundreds of these small businesses out of business. And a lot of these businesses are owned by immigrants," he said. "I don't think the mayor could possibly have asked for a worse situation."
Mamdani unveiled the proposal during his mayoral campaign, and the city has since committed $70 million in capital funding to develop five government-backed grocery stores by 2030. Under the plan, essential grocery items would be sold at roughly 30% below typical retail prices.
Debate Over the Proposal Continues
The proposal has drawn criticism from several business leaders and economists in recent months. Economist Peter Schiff argued government-owned grocery stores would be less efficient than private retailers because grocery profit margins are already below 2%, warning taxpayer subsidies would likely be needed. Mamdani rejected that criticism, saying, "I look forward to the competition. May the most affordable grocery store win."
"Shark Tank" investor Kevin O'Leary also questioned the economics of the proposal, arguing that grocery stores typically operate on 2% to 3% pre-tax margins and that offering 30% discounts would guarantee losses on every sale, with taxpayers ultimately covering the cost. Venture capitalist David Friedberg, meanwhile, suggested the stores could initially become highly popular because of government-backed discounts before the long-term costs become apparent.
The debate has also extended into the technology community. Billionaire investor Mark Cuban recently asked AI chatbot Grok to evaluate whether the proposal could break even. The chatbot concluded that government-run grocery stores have historically struggled to remain financially viable without ongoing subsidies or private-sector management.
Supporters, however, continue to defend the initiative. Rep. Ro Khanna (D-Calif.) has argued the stores are intended to serve food deserts where residents lack affordable grocery options, saying rising food prices stem from broader economic pressures rather than the grocery initiative itself.
