The other issue is what’s going to keep prices low at these stores?
A hugely important piece of history here is the Robinson-Patman Act. I’ll throw a bit of AI slop for context, but it’s consistent with what I know. Basically, the direction to the FTC to stop enforcing this act is what created food deserts and Walmart.
From the 1930s until the early 1980s, the Robinson-Patman Act was enforced by the Federal Trade Commission (FTC), ensuring that suppliers offered similar pricing to all retailers, regardless of size. This allowed independent grocers to compete effectively with large chains.
No, the Robinson-Patman Act was not repealed, but its enforcement by the government was virtually non-existent for decades until the Federal Trade Commission (FTC) recently began reviving its enforcement in 2021. While the act remains on the books, it was largely unenforced for a period, but recent actions by the FTC indicate that it is still considered a live statute, say Norton Rose Fulbright, American Bar Association, and Every CRS Report.
History of non-enforcement: The Department of Justice announced it would stop enforcing the act in 1977, and the FTC had not brought an enforcement case since 2000.
Reasons for non-enforcement: Enforcement agencies largely abandoned the act due to concerns that it could harm consumers by punishing legitimate volume discounts and that it was anticompetitive, say The Federalist Society, Anderson Kill P.C., and American Economic Liberties Project.
Recent revival: In recent years, including under the Biden administration, the FTC has signaled renewed interest in enforcing the act and has initiated investigations into potential violations.
A classic example of this is the story where Walmart almost put Vlassic pickles out of business.
For me the biggest question is: “Will these City-ran grocery stores, be able to complete with the Walmart juggernaut?”
Yes, initially the city-ran stores will be placed in “food deserts”, but if the program is to succeed it need to go toe-to-toe with Walmart. Otherwise, the program won’t be able to reach the people who need it the most.
… and based on the article you posted, I’m sure Walmart won’t take this lying down. Walmart will have no second thoughts or remorse to sacrifice their suppliers in order to compete (thus, keeping customers flocking to their store).
It doesn’t look like there are any Walmarts in NYC. Honestly they probably don’t care about this, their model is big box stores that sell everything. You can’t put a big box store in NYC.
In the article, it’s says 1) they will direct the subsidies away from privately owned stores to spend on the city grocers, and 2) the city will pay rent and taxes on the store.
I don’t know how well it will work, or if some chain tries to mess with their price, like you mentioned, but I’m excited to see it in action and see what happens.
No matter what, I appreciate that he is actually trying something to combat a problem.
The other issue is what’s going to keep prices low at these stores?
A hugely important piece of history here is the Robinson-Patman Act. I’ll throw a bit of AI slop for context, but it’s consistent with what I know. Basically, the direction to the FTC to stop enforcing this act is what created food deserts and Walmart.
From the 1930s until the early 1980s, the Robinson-Patman Act was enforced by the Federal Trade Commission (FTC), ensuring that suppliers offered similar pricing to all retailers, regardless of size. This allowed independent grocers to compete effectively with large chains.
A classic example of this is the story where Walmart almost put Vlassic pickles out of business.
https://www.fastcompany.com/47593/wal-mart-you-dont-know-2
https://archive.is/KYd9U
Ugh, that’s a depressing read, and I already knew the story. Tl;dr: Walmart kills brands. The Walton family gets richer. Everyone else suffers.
For me the biggest question is: “Will these City-ran grocery stores, be able to complete with the Walmart juggernaut?”
Yes, initially the city-ran stores will be placed in “food deserts”, but if the program is to succeed it need to go toe-to-toe with Walmart. Otherwise, the program won’t be able to reach the people who need it the most.
… and based on the article you posted, I’m sure Walmart won’t take this lying down. Walmart will have no second thoughts or remorse to sacrifice their suppliers in order to compete (thus, keeping customers flocking to their store).
It doesn’t look like there are any Walmarts in NYC. Honestly they probably don’t care about this, their model is big box stores that sell everything. You can’t put a big box store in NYC.
There aren’t, and most of the big box stores are about a third to half the size of their equivalents outside the city
In the article, it’s says 1) they will direct the subsidies away from privately owned stores to spend on the city grocers, and 2) the city will pay rent and taxes on the store.
I don’t know how well it will work, or if some chain tries to mess with their price, like you mentioned, but I’m excited to see it in action and see what happens.
No matter what, I appreciate that he is actually trying something to combat a problem.
The easier way would be to make a law that mimics Robinson-Patman and actually enforce it within the confines of NYC.
But hey, I’m willing to see what happens.