By 5 Towns Central Staff

NEW YORK CITY (August 23, 2026)

A group representing immigrant-owned grocery stores is taking legal action against New York City over Mayor Zohran Mamdani’s proposal to establish a network of city-operated grocery stores.

The lawsuit challenges the administration’s plan to open five publicly owned supermarkets, a project that critics say could cost taxpayers at least $70 million while putting privately owned bodegas and neighborhood grocery stores at a competitive disadvantage.

Store owners argue that government-backed supermarkets could offer artificially lower prices because they would be supported by taxpayer funding, potentially drawing customers away from small businesses that lack the same financial backing.

The legal challenge comes as questions continue to surround how the administration intends to support existing neighborhood businesses while launching its own grocery operations.

Fox News correspondent Madison Alworth reported that the Mamdani administration had previously discussed providing grants to local businesses to help them compete with the planned city-run stores. Those discussions were reportedly later scaled back.

Critics say the proposal could ultimately result in taxpayer money being used on both publicly operated grocery stores and subsidies for private businesses, while immigrant-owned bodegas bear the risk of losing customers and revenue.

The lawsuit now puts the city’s grocery-store initiative under legal scrutiny as officials move forward with plans for the publicly funded markets.