A local business group sued New York City and Mayor Eric Adams on Monday over his plan to open five government-owned grocery stores around the city. The Multicultural Business Coalition, a nonprofit representing supermarkets, grocery stores and bodegas, filed the lawsuit in the New York County Supreme Court, arguing that the plan would introduce unfair competition to a struggling local industry already dealing with slim profit margins. The coalition claims the plan will particularly harm immigrant- and minority-owned businesses.

Mayor Adams floated the stores on the campaign trail as part of his affordability agenda, arguing that subsidized supermarkets focused on cheap, healthy foods would help New Yorkers adapt to rapidly rising food costs. The stores, run by external operators but overseen by the city, would offer a core basket of staples at a 30% discount to market rates. Operators would get free rent and subsidies.

The mayor has allocated $70 million toward the stores. The city's Economic Development Corporation says the city has roughly 1.5 square feet of grocery space per capita, compared with roughly 5-10 square feet elsewhere in the country. Mayor Adams says the plan might save New Yorkers $1,000 a year.