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A case for government-run grocery stores

In recent news, Kroger, America's 3rd largest grocery chain, formally announced that they will shutting down around 60 locations this year, with one of these locations being the nearest grocery store to me. Also in recent news, NYC mayoral candidate Zohran Mamdani is campaigning on the idea of opening city-run grocery stores as a major part of his platform. More on that later.

With the local grocery store closure happening at some point this month, the anger and concern of residents here have been frequently making their way into local news and into town hall meetings. And their concerns are plenty valid. From that location, there are only two other grocery stores left that serve this densely populated area, one being inaccessible by bus line (without at least one transfer) from the ones that already serve the Kroger, and the second one being almost 20 city blocks (about a mile and a half) away.

To make matters worse, this Kroger serves a low-income area. That's right SW, your dearly beloved TinyViolins is a mere peasant. But to paint a clearer picture, what I see when I drive by this store is young parents with young children, often more than 1. I see elderly folks who move like they're dragging boulders. I see the sick and disabled confined to wheelchairs or oxygen tanks. I see aging, worn-out prostitutes and their pimps who surprisingly look nothing like the pimps in pop culture. I see homeless people and junkies loitering, and sometimes scrounging, like scattered flotsam around the economic center of this neighborhood, this grocery store.

And to be fair to the company, theft is a major concern both in and around the store. Public safety is something one is always conscious of when deciding to shop here. When prisons are already overcrowded, a shoplifter or addict simply isn't a top priority. It may as well be a Mecca for petty crime, which is unfortunate, but there are lots of cracks in impoverished areas and many people to fall into them. In any case, liquor in particular is a very prized commodity among our criminal community. I always have a difficult time picking up libations at this location.

However, the store is still profitable. It's frequently sprawling with shoppers. It's not like they're not making money. The core purpose of their business is being satisfied in this instance. And even if one wanted to address or at least curtail the issue of theft, getting rid of the alcohol would get you most of the way there without impacting people's need for essentials.

The crux of the problem, as I see it, is that Kroger, being a publicly traded company, has investors to appease. Despite making a profit at this and several other locations, it's very likely that they were not seeing the kinds of large margins they want to see from these stores.

See, many Kroger locations offer much more than simply groceries. There's a bakery department, a seafood department, there's furniture and clothes and greeting cards, etc. Many low-income people simply aren't going to spend a lot of money on fish or furniture or premade cheesecakes and tiramisus. The store model is simply disconnected from the needs and habits of consumers in their area. But rather than adjust their store model to boost their margins and chase profitability in other ways, they simply decided to screw over the neighborhood and their employees and abandon them without any contingency plan. In essence, they've created a food desert.




Now onto Zohran Mamdani, whose plan for city-run grocery stores are motivated primarily to address food deserts as well as high grocery prices. A noble endeavor by most standards, but can it successfully accomplish its goals is the main question. One whose answer could sink or float his entire political career.

There is precedent for government-run grocery stores in the US. There have been a few in Kansas, Florida, and Illinois attempting to serve rural areas disconnected from other options. To date, all of these stores have either closed or been sold off due to operating costs and financial struggles. Certainly not inspiring news for the people of New York City.

There are also examples of tribal grocery stores being run by the Choctaw and Potawatomi in Oklahoma, but the community structure of federally recognized indigenous tribes are a bit different from the rest of the nation. It may just be that these tribes want to keep their money within the community rather than allowing a national chain to extract funds to their corporate HQ.

The most successful instance to date is that of military-run grocery stores, otherwise known as commissaries. Every branch of the military is allowed to operate these stores on military bases both at home and abroad to meet the needs of service members and their families. Even though they have the ample backing of the US Department of Defense, these stores actually are well-received by our soldiers and veterans alike according to everything I've read. It could serve as a base model for how NYC wants to operate.

The one advantage that Mamdani has in his plan is sheer scale. The previous instances of publicly run grocery stores in the US took place in rural, sparsely populated areas. They had a very small pool of shoppers to sustain them, which doesn't usually bode well for perishable goods. In New York, however, you can't even pass gas without a dozen people smelling it. It's one of the most densely packed places on the planet and there will be no shortage of foot traffic to help these stores bring in money.

But let's say for argument's sake that we know for certain the store is going to be a financial failure. What then would be the benefit of setting up shop in a food desert?

See, the thing is that people have to eat regardless. Our bodies require nutrition, and sometimes that comes in the form of chips and soda from the local corner store. Sometimes that's a Big Mac or a bucket of chicken or whatever food abomination Pizza Hut is selling. Sometimes that's Top Ramen or hot dogs or whatever shelf-stable easy-to-prepare items people can afford. If one is unable to or can only access grocery stores with great difficulty, those options are simply going to be a lot more convenient and available.

It doesn't take a genius to figure out what the end result of a highly-processed, high caloric, low nutrition diet will be. Obesity, heart disease, diabetes, probably other chronic diseases. And indeed, there are correlations and associations with these health problems when it comes to living in food deserts. Those health problems have many lasting consequences for later on in life. Shorter life expectancy, inability to work, reliance on government assistance, medical debt, straining public health resources, you name it.

There is a social cost to not having access to fresh, nutritious food. And maybe certain people in food deserts will be willing to brave the extra hoops and hurdles from traveling further to obtain their nutrition and maintain their health, but it takes extra time and energy that working parents or the elderly or disabled may be too constrained to pursue. How many blocks is okay for an old grandma to be carrying groceries? Idk.

But this is now an issue that my community will be forced to contend with. In low-income areas, it's rare for new businesses to want to set up shop due to the low potential for growth, hesitancy from banks to give out loans or investors to pour capital, and likely increased operating expenses from redesigning and remodeling the old store to fit the new format. Many storefronts simply remain abandoned for years as a blight on the community that it once serviced. I fear that this is going to be yet another example of that. There are currently no plans to repurpose the soon to be vacated business front.

I'm lucky enough to have my own means of transportation and can make the longer trips if need be, but I know there are many others that aren't as fortunate and will have new challenges to contend with as they try to feed themselves and their families. I, for one, am not very hopeful for their chances considering there's a McDonald's right across the street from their grocery store.
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PDXNative1986 · 36-40, MVIP
Tl:dr but just FYI the only reason I'm doing it to you is I already agree with you. There's too many Food Deserts. someone needs to serve them and Dollar General isn't really a sufficient way to deal with that problem. What we have here is a failure of the Free market to really solve all problems. Some Economist would lecture about the danger of crowding out but I mean really, if the market is not providing what people need, then the state should step in and do it for them. And we have Food deserts, the private sector has had ample opportunity to resolve them and has only chosen to exploit them with things like Dollar General, which, to be crystal clear services a critical need, but at the same time, full service groceries don't want to compete with them directly so they crowd out better options when they enter a community. I am not viciously anti Free enterprise or capitalist or nearly as anti Corporate as some would paint me, somewhat perhaps, not all the way. But the thing Is I realize that the private sector cannot solve all problems and shouldn't be expected to, when it falters, we ought to be able to expect the state to step in.
FreddieUK · 70-79, M
This is such a shame for the elderly, infirm and those who cannot drive for whatever reason. We have similar issues in the UK, but we do have in many places much better public transport (transit) often subsidised by local government to help with the situation you describe. The shoplifting phenomenon has recently come to the fore in the media and it seems that the authorities are finally taking it seriously. Shop workers cannot tackle potentially violent criminals, which some of these people are. It appears that big crime gangs are often involved in shop theft. This is where pure capitalism does need some help in providing services. I'm not sure about government own stores, that might be a discussion to be held more locally.
JimboSaturn · 56-60, M
@FreddieUK Shrink due to shoplifting has increased in Canada too.
TinyViolins · 31-35, M
@FreddieUK I do agree that more needs to be done against retail theft. There are organized crime rings now targeting many retailers, including grocery stores. Ultimately it ends up hurting the people who need it the most.

It's like with local Walgreens and other pharmacies. It's the sole place for many people to get their much needed medication, but due to a lack of staffing and security, often falls prey to shoplifting which leads to store closures, ultimately leaving many without a place to pick up their meds
Cyclist · 46-50, M
Same problem in the DC region. Governments worked with Giant to open stores in “food deserts”. A few years later they closed because of theft. Maybe what needs to happen is local governments provide more security.
As a related issue, Walgreens says putting things in locked shelves decreases sales by 20%. That may be a bigger bite than theft.
TinyViolins · 31-35, M
@Cyclist Yeah, but once the store is gone, it's going to be very hard to fill the void left behind. You're pitching a preventative measure. It's like closing the stable door after the horses got loose.

I do agree that more effort needs to be done on the theft front, but I did mention earlier that shoplifting isn't really prosecuted properly due to an overcrowding of area prisons. We tried shipping inmates off to neighboring counties but even they got overcrowded.

Unfortunately it's a high COLA area with insufficient wages, so petty crime, homelessness, and addiction run rampant. The bad apples spoil the bunch for the rest of us hard-working types trying to get by
JimboSaturn · 56-60, M
Are the closures related to the government run grocery stores? I work in the grocery business and we often close stores that are not achieving their targeted income.
JimboSaturn · 56-60, M
@TinyViolins I am not against government run food stores in some situations. I'll have to think about the balance between a free market and social benefit.
TinyViolins · 31-35, M
@JimboSaturn It's definitely an idea with plenty of risk, but also the potential to curb a lot of negative externalities. Ultimately, this is a classic example of market failure. A private business failed to meet the needs and demands of their market. In those instances, there's good justification for the government to step in
JimboSaturn · 56-60, M
@TinyViolins Precisely what I was thinking. Government involvment due to market failure. I think people have to remember that the market is to serve the people, not people to serve the market.
HumanEarth · F
Lucky for me I have old world skills and knowledge of eatable wild weeds. I have been consuming wild plants for over 30 years.

I also hunt, trap for meat

Persevering food long term winter storage is a must in our home.

This is what we taught our kids and now teaching grandkids. Never relied on government to be there for you. The government doesn't give two shits about you. We are are nothing more then a dollar sign to the government
HumanEarth · F
@TinyViolins All I hear are tiny violins playing. During the great depression people found ways to grow food in the city, they even trapped and ate rats, dogs, cats, birds
Adrift · 61-69, F
@HumanEarth I watched a video on this.
People had victory gardens in the cities too.
I know a lady that actually started one in an apartment complex she lived in.
The manager liked it so much, he took out a bunch of useless common area grass and expanded the project.
TinyViolins · 31-35, M
@HumanEarth So we should start feeding kids rats and pets? I'm not saying that people won't find a way to eat, I'm saying that their alternatives are going to be junk food which has many negative health consequences.

I like the idea of community gardens, but I don't know much about their viability. As I understand it, they are mostly a way to supplement existing food supplies, not entirely replace it
dale74 · M
It is not that kroger or others dont want a store near you it is the fact that people in the area have made it so bad they can not keep loosing money Birmingham AL has no krogers left but they do have kroger delivery available this is a good mesh those who need groceries pay and they are delivered reduces theft to almost zero since groceries are paid for before delivery.
TinyViolins · 31-35, M
@dale74 The majority of the theft, according to some employees, comes from alcohol and other things addicts take to resale. There are ways to adjust the store model in order to dampen these systemic issues, or to use some of the profit to increase security, but the store is apparently deciding to throw the baby out with the bath water
dale74 · M
@TinyViolins used to work security for Kroger. I was over twenty six stores, the most common thing stolen was meat highend meat like steaks and baby formula because they are easy to resale.
TinyViolins · 31-35, M
@dale74 At one of the other grocery stores in my area, they only keep a handful of steaks out at a time, constantly replenishing them as needed, in order to keep theft to a minimum. I'll grant you that it's not efficient, but it keeps the store running and they have even lower prices than Kroger does.
PDXNative1986 · 36-40, MVIP
To go into even greater detail in many markets there isn't actually any danger of crowding out, the whole economic hypothesis of crowding out is fatally flawed for one very simple reason, while many of these food deserts are in Rural communities many of them are in Urban or Suburban environments with High Crime as a feature of the Area, the few businesses that do operate in the area lock most of their inventory up and require staff to come unlock for the people. who also have extensive silent alarms to trip, etc. The government would not be in danger in crowding out because these high crime areas also need grocery stores, they have a monopoly on the legitimate use of force and are thus the best party to potentially run one in those areas.
Grocery stores run on very thin margins .. and most businesses are run to make a profit .. not to be social justice warriors. This govt owned store idea failed in Kansas City and several other places. Expect it will fail in NYC.

Mamdani is not what NYC or any place in this country needs. He's worse than AOC, so virtually certain New Yorkers will elect him.

NYC will return to the crime ridden sewer it was prior to Julianni, not that he was perfect either.
Amur8711 · 31-35, M
Have you ever thought that the mayor wants government run grocery stores so they allow clime to be so high that these privately traded stores pull out so the government can step in to fix the problem they created?

He doesn't want to address the cultural problems in these areas because it give him more power.
TinyViolins · 31-35, M
@Amur8711 I'd prefer to focus on reality instead of speculation, especially when it's that damned cynical. I'm sure you can invent any level of malicious intent behind anybody running for or in office. It's like FEMA death panels, microchips in vaccines, or government seizing guns after every "false flag". You can try to sell fear to anybody by making things up
MarkPaul · 26-30, M
There are plenty ways to lure free enterprise companies into communities without a government takeover. Whether a Republican imposter takes a stake in Intel or a Socialist-Democrat threatens government ownership of grocery stores, rental units, and other free market enterprises that kind of government intervention reflects a lack of political leadership, creativity, and understanding.
MarkPaul · 26-30, M
@TinyViolins Well, there's that chip on your shoulder I diagnosed for you. I see where your problem is... since Kroger didn't precisely say, "it's not profitable," you are not able to assess the situation on your own. So, literally you are stuck. Well, that's why I am here, to help you out of this jam.

Crime is unprofitable for any business. Let me explain this in a way even you should be able to understand it. If a business is having a portion of its goods-for-sale stolen (that means no one is paying for it), we call that "shrinkage" and that becomes unprofitable. If that shrinkage starts taking up a larger and larger share of the day-to-day business receipts, it becomes unprofitable to do business. Let me know if you need a whiteboard exercise to illustrate this fundamental part of the retail business (that includes grocery stores). So, when a business says, "theft and regulatory pressures are the main reasons for the store closures..." they are telling you what the root cause is of the business being unprofitable. An astute person with a basic understanding of how the world works would knowingly recognize the business (rightly or wrongly) is telling you (and the public) that it's not their fault they are losing money; it's the theft and regulation that is causing the unprofitable condition thereby freeing themselves of any accountability. You see, when you only examine the surface of a problem statement, you lose the track for solving the problem. To make it even simpler for you and as a summary, theft and regulation has a cost and Kroger wants you to know that is what is causing their business in your community to be unprofitable. See now? Let me know what questions you could possibly have at this point.

If the city has done everything under the sun to fight crime, promoting the idea that owning and operating a grocery store at taxpayer expense is hardly the solution (perfect or imperfect) you think it will be. Tbh, I doubt your veracity in reporting this story, but based on the scanty information you have provided, if we take everything you have presented at face value (as no doubt you have), a better solution would be just to set up a government run food distribution center (Gaza Strip style) to put surplus food into the bellies of the selected neighbours you claim to care so much about.

As an aside, your behaviour here is reprehensible. Based on your flimsy research on this one topic and your faulty conclusions, I don't think I need to be worried about your allegation-as-evidence claim that I am "one of the most ridiculed members of the website." My advice to you is to get yourself some life experience instead of pretending you are the centre of the universe and a cut above everyone else.

As for your endorsement that I run for office, I will take that under advisement. No offence though, I can't put a lot of stock into it since I have seen how you tend to favour allegations over evidence, superficial gossip over substantiated facts, and opinions that you masquerade as well-thought-out proposals. As a scholar, businessperson who operates with a professional sense of behaviour, I refuse to engage in the type of insults that you are using to prop yourself up as some kind of Internet tough guy. All, I will say to you is, it's time you grow up. In any case, I do appreciate your confidence in me, and should I decide to run for office in your community, I will look forward to and count on your support. Be well.
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dale74 · M
You say it is profitable grocery stores operate on a 1-3% profit margin after all expences.
TinyViolins · 31-35, M
@dale74 I know, I worked in the regional corporate office of a major grocery chain. Margins are relative, but profit is king
dale74 · M
They have tried government run grocery stores they failed big time.
TinyViolins · 31-35, M
@dale74 There's literally a whole paragraph addressing that

 
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