[rdtsc]

> “Some will insist that city-owned businesses do not work, that government cannot keep up with corporations. My answer to them is simple: I look forward to the competition. May the most affordable grocery store win,” Mamdani said.

Well it's interesting enough to try. Are they going to keep the stores open at a loss, that's not really competing then, is it?

If they sell things that are much cheaper, restaurants could start sourcing their food from there, too. Why get your chicken from some supplier if you can buy it from a cheaper government run store at much less.

But then, if these stores are not run at a loss, it means somehow there is this large inefficiency that other stores haven't tapped into. And if I had to guess, grocery stores don't seem like a large margin business, but perhaps that's just my ignorance as it's not something I ever looked into in detail.

[orwin]

Store are low margin businesses, unless they own the walls. In this case, what often happens is that when he retires, the owner keeps the walls but sells the business. The walls are put in an asset portfolio, while the poor bastard who bought the business see their renting cost climbing. And that's not talking about the buying group whose margin grow YoY while the shop margin goes down.

[ceejayoz]

> If they sell things that are much cheaper, restaurants could start sourcing their food from there, too. Why get your chicken from some supplier if you can buy it from a cheaper government run store at much less.

Restaurants already do this. They buy from wholesalers, because they're cheaper than the grocery store.

[rdtsc]

> Restaurants already do this. They buy from wholesalers, because they're cheaper than the grocery store.

But now grocery stores could be cheaper than wholesalers if there are any subsidies involved or selling at a loss is a thing. Why go to wholesalers when you can camp out with a van by the government subsidized stores when it opens or when delivery comes.

Not saying this is insurmountable, the stores can implement a purchase quota: you get X amount of items per transaction and we take your ID or something. But it opens up that kind of a situation. Like I said, I hope it works, it would be interesting to watch.

[ceejayoz]

> But now grocery stores could be cheaper than wholesalers

I really don’t think this will be the case. That’s not the goal here.

[scoofy]

It's a question of volume. If they're really going to sell things at a loss, then it should create real demand. If you have that demand, then you're going to start running out of groceries mid-day. At that point, the business sucks because you either have to show up at 10 AM to buy anything, or they start some ridiculous rationing program to prevent people and businesses effectively reselling at market rates, or they make up for their negative margins by increasing their volume and losing even more money.

It's a low margin, high volume business. I'm extremely skeptical that this plan works beyond just being a politically popular way to light money on fire. I say that as someone who actually like Mamdani.

[ceejayoz]

What if it was possible to stock products during the day?

[scoofy]

It sort of doesn't matter. The point is that if the goods are being sold below market value then you will either have shortages, rationing, or accelerating losses. This has always been a problem in non-market socialism.

[ceejayoz]

Costco sells chickens as loss-leaders.

They don't run out, and Walmart doesn't go buy all of them to resell.

[scoofy]

A loss leader isn’t a business model when everything is being sold at a loss.

The idea that Mamdani is going to undercut a low margin business with higher labor costs is just silly.

[ceejayoz]

> The idea that Mamdani is going to undercut a low margin business with higher labor costs is just silly.

Why?

Stock store/generic brands. Don't stock 40 variants of Colgate toothpaste that all have the same ingredients and are described separately as "fresh mint", "cool mint", and "mint". Stock more staples than sushi.

[peyton]

I mean Costco’s a membership club. This is NYC. Of course somebody’s gonna show up with a truck and arb any profitable grocery item if there isn’t rationing.

[scarecrowbob]

Not being able to get stuff on a pallet or in a 5 gallon bucket or whatever has its own cost. Hell, not being able to invoice on NET30 or have a supplier or even not having to pick and pack stuff has a cost.