I’m guessing the original OC is pointing to the enormous customer bases each store would have to service and how inadequate the amount of stores per borough are relative to the amount of customers
The stores aren’t supposed to replace the existing stores or serve the whole city population. They’re supposed to put some outlets into underserved neighborhoods whose residents now have to subsist on junk food or else use transit for basic groceries.
If the goal is universal grocery availability at the lowest prices, then I agree: this plan alone won’t achieve that. However, I see a couple of factors here with the plan that could achieve some measures of success.
The first is that the plan is to place these stores in, essentially, food deserts in the city. That would have an immediate positive impact on grocery availability for the localities around the 5 stores. Further, the fact that the city stores will be selling at wholesale will mean that food prices at these could be noticeably cheaper. This would steel customers from other grocery stores, forcing them to lower prices to attract their customers back. While grocery stores usually run on small profit margins, that usually is still while having to pay property taxes (which city grocery won’t), but land (which city grocery won’t), and pay for expensive business operations (marketing, executives, etc) (which city grocery won’t).
I’ll be the first to say its not a slam dunk win for everyone in the whole city immediately, but the locals around the store benefit immediately, and the success of an alternative without a profit motive puts pricing pressure on existing stores possibly fleecing customers with higher prices.
I’m referring to customers not local to the area that want lower prices and would be willing to travel to get it. In economic terms this is called Price elasticity of supply.
Could you expand on your thoughts here? Which part do you see as failing or what your definition of failing for this project?
I’m guessing the original OC is pointing to the enormous customer bases each store would have to service and how inadequate the amount of stores per borough are relative to the amount of customers
The stores aren’t supposed to replace the existing stores or serve the whole city population. They’re supposed to put some outlets into underserved neighborhoods whose residents now have to subsist on junk food or else use transit for basic groceries.
I haven’t looked into the proposal much but this is what I envisioned with the term food deserts.
All areas have bodegas but they don’t often have a selection of fresh fruits, vegetables, or food staples.
source: I’ve lived in NYC.
One store per borough when the populations exceed 1 to 2 million won’t achieve the goals of increasing food availability or reducing prices.
If the goal is universal grocery availability at the lowest prices, then I agree: this plan alone won’t achieve that. However, I see a couple of factors here with the plan that could achieve some measures of success.
The first is that the plan is to place these stores in, essentially, food deserts in the city. That would have an immediate positive impact on grocery availability for the localities around the 5 stores. Further, the fact that the city stores will be selling at wholesale will mean that food prices at these could be noticeably cheaper. This would steel customers from other grocery stores, forcing them to lower prices to attract their customers back. While grocery stores usually run on small profit margins, that usually is still while having to pay property taxes (which city grocery won’t), but land (which city grocery won’t), and pay for expensive business operations (marketing, executives, etc) (which city grocery won’t).
I’ll be the first to say its not a slam dunk win for everyone in the whole city immediately, but the locals around the store benefit immediately, and the success of an alternative without a profit motive puts pricing pressure on existing stores possibly fleecing customers with higher prices.
The plan is targeting areas without grocery stores. The areas will already have bodegas but they typically sell junk food and alcohol.
I’m referring to customers not local to the area that want lower prices and would be willing to travel to get it. In economic terms this is called Price elasticity of supply.