A free market think tank is cautioning Canadians against the idea that city-run grocery stores will lead to lower prices. The Montreal Economic Institute (MEI) released a study indicating that public grocery stores in North America have a poor track record, offering little hope for recent pilot projects in New York City and Toronto.
High Failure Rates
The study highlights two recent case studies from the U.S. Midwest. One city-run grocery store was privatized in 2024, while another, Sun Fresh Market in Kansas City, Missouri, closed in 2025 after receiving $29 million in taxpayer dollars over seven years. The store faced safety issues, financial losses, and difficulty keeping shelves stocked.
Citing food economist Sylvain Charlebois, the study reports that the failure rate of government-run grocery initiatives in North America likely exceeds 50 percent.
Logistical Challenges
Study author Charles Lammam explained that the grocery business is inherently difficult. Profit margins are low, typically three to five percent on food items for Canadian retail chains. Grocery stores require coordinating thousands of perishable products across temperature-sensitive supply chains with minimal room for error or delay. Lammam questioned whether governments are equipped to handle such complex logistics.
Political Motivations
Lammam noted that left-leaning municipal governments are pursuing these ventures for political reasons, despite evidence against their success. He described it as “policy adventurism,” where governments launch visible but unproven initiatives instead of addressing existing responsibilities.
He criticized Toronto city council’s March vote to approve four city-run grocery stores at an undisclosed cost, arguing that the problem in Toronto is not a lack of grocery stores but the inability of residents to afford food. Similar initiatives have been proposed by New York City Mayor Zohran Mamdani and federal NDP leader Avi Lewis.
Alternative Solutions
Lammam suggested that lowering food prices requires addressing more straightforward issues first, rather than pursuing untested public grocery models.
