Exclusive | Immigrant-led business group votes to sue NYC over Mamdani's taxpayer-funded grocery stores, alleging unfair competition

July 29, 2026 - 03:33

The board of an immigrant-led business coalition has voted to file a lawsuit against New York City, challenging a plan to open five subsidized grocery stores in low-income neighborhoods. The group alleges the city's initiative, backed by Councilmember Shahana Mamdani, creates unfair competition that will drive small, family-owned markets out of business.

The lawsuit centers on the city's use of taxpayer money to fund the stores, which the coalition argues will undercut prices at existing immigrant-run bodegas and grocery stores. These small businesses, many owned by first-generation Americans, already operate on thin margins and cannot compete with a government-subsidized operation, according to the group's leaders.

"This is not about opposing fresh food access. It is about ensuring the city does not destroy the very businesses that have served these communities for decades," said a spokesperson for the coalition. The group represents hundreds of immigrant entrepreneurs across the five boroughs.

The city's plan, announced earlier this year, aims to address food deserts in underserved areas by opening stores that offer fresh produce and affordable staples. Supporters argue the initiative will improve public health and reduce reliance on processed foods. However, the business group contends that the city should instead invest in existing stores to help them stock healthier options, rather than building new, competing outlets.

The lawsuit is expected to be filed in state court within weeks. The coalition is seeking an injunction to halt construction and funding for the stores until a full review of the economic impact on local small businesses is completed. The legal challenge highlights a growing tension between city-led development projects and the survival of mom-and-pop shops that form the backbone of many immigrant communities.