The government can lower grocery prices. It doesn’t have to run the stores
Fortune · David L. Ortega ·
It’s a Costco card, with Washington as the buying club.
Almost every plan to lower food prices ends up putting the government in one of two businesses, either running a grocery store, as New York Mayor Zohran Mamdani is now doing, or telling grocery stores what to charge. A new proposal from the Kitchen Table Project does neither, which is why I’ve spent more time with it than I expected to. Instead of working on what shoppers pay, it works on what the store pays.
The federal government already buys an enormous amount of food. USDA runs competitive auctions to supply school lunch and other nutrition programs, and it has been doing so for decades. The proposal would let any grocer, whether a bodega in the Bronx or a Kroger in Lansing, buy a basket of 20 staples at a similar auction price. The one condition is that the store has to sell them at a markup that’s set in advance and posted where customers can see it.
This is like a Costco membership where Washington is the buying club and the grocer is the member. The government never owns a store, never runs a warehouse, and never writes a check to cover the gap between what food costs and what a politician would like it to cost. The report estimates a family of four would save about $315 a year.