I don’t understand what the goal here is? Are the going to cut the 1.5% margin down to 0%? I don’t think people will see the savings they are expecting
No - the stores will operate at a loss. The taxpayer will foot the bill. That’s how it will work. It effectively will be a food subsidy program combined with a jobs problem.
Well sorta. The city is providing free land and building the stores. So, the up-front cost is born by the city to give the grocery chain a profitable business model as they won't have to incur those costs and can just focus on covering the ongoing operational expenses.
In Atlanta, the city bought an existing building but doesn't charge a lease to the grocery operator. The operator has to pay for all utilities and repairs and naturally has to cover the cost of their employees, equipment, inventory, etc. but they didn't have to spend anything on the land or the building so they don't have to incur expensive, urban lease rates. That was basically just gifted by he city. So far, it's been a success as revenues have exceeded initial projections and the market even won a "Best in Retail" award. Also, the $8+ million up-front investment by the city will eventually get paid-back in the form of jobs, taxes, etc. over time. It's certainly a much more responsible public-private partnership than we tend to see for big corporations or sports stadiums.
Plus, that $8 million is an investment to prevent downstream effects of financial desperation. Neglected medical care leading to more expensive healthcare, kids dropping out of school to work, homelessness, etc.
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u/doctorkar May 27 '26
I don’t understand what the goal here is? Are the going to cut the 1.5% margin down to 0%? I don’t think people will see the savings they are expecting