Mayor Zohran Mamdani’s administration is mired in yet one more grocery store mess.
An internet grocery platform that runs a metropolis program for low-income households has stiffed Large Apple grocers to the tune of greater than $1 million — at the same time as the town seeks to enlarge the corporate’s contract to a whopping $75 million, The Publish has realized.
San Diego-based Mercato — whose internet portal lets eligible New Yorkers buy recent vegatables and fruits at a 50% low cost from native grocery shops all through the 5 boroughs — acquired $30.4 million over the previous 4 and a half years from the town’s “Groceries to Go” program, metropolis data present.
Nonetheless, Mercato this yr has didn’t pay for greater than $1 million in produce it delivered to clients months in the past from dozens of impartial supermarkets, together with C-City, Bravo and Key Meals, in line with retailer homeowners.
“I needed to hunt them down and principally beg them for $10,000 — and so they nonetheless owe me $4,500,” stated Anthony Diaz, who manages a C-City in Williamsburg, Brooklyn.
In Queens and the Bronx, Mercato owes Jorge Guillen’s two Cherry Valley Market shops a mixed $36,000, in line with the grocery store.
“The impression on our enterprise is big,” Guillen informed The Publish. “It impacts my means to buy items and pay my payments, so we needed to discover new financing. We took on debt.”
Regardless of the mess, the town’s Division of Well being and Psychological Hygiene not too long ago awarded Mercato a $75 million, six-year contract that was slated to start in July, in line with public filings.
The well being company informed The Publish that it’s “unaware of delays in funds to supermarkets,” in line with a spokesperson.
Approval of Mercato’s new contract is being held up by the town Comptroller’s Workplace, which has “excellent questions” for the DOHMH, in line with a spokesperson for Comptroller Mark Levine.
Reached by The Publish, the his spokesperson declined to elaborate on the company’s questions.
Final yr’s $30.4 million contract with Mercato, which has been a metropolis vendor since 2023, expired on June 30. In line with the town’s web site, the Groceries to Go program “has been paused and isn’t enrolling new individuals at the moment.”
Guillen says he had a Zoom name a couple of month in the past with Mercato’s chief government Bobby Brannigan. Guillen stated Brannigan informed him Mercato was working behind on funds as a result of the town had been delaying its reimbursements to Mercato.
“Often Mercato deposits the funds in 48 to 72 hours,” Guillen informed The Publish. “Now Mercato has not paid some NSA members since February.”
A spokesperson for the well being division, nonetheless, stated that primarily based on a assessment of fiscal 2026 information, all invoices from Mercato have been paid on time.
“We don’t know why our members usually are not being paid,” stated Anthony Peña, president of the Nationwide Grocery store Affiliation, which represents about 450 impartial grocers in New York Metropolis.
“However on the finish of the day the town is just not correctly vetting an organization that it’s funding,” Peña added. “It begs the query of what is going to occur with these public grocery shops.”
Peña referred to Mamdani’s controversial, $70 million plan to open a government-run grocery store in every borough of the town — a proposal that the NSA and different native grocer teams say will pose unfair competitors for his or her already struggling companies.
Mercato — which additionally has operated in main cities together with San Francisco, Chicago, Denver, Philadelphia, Austin, Texas, and Washington, DC — didn’t return a number of cellphone calls and emails looking for remark.
Peña estimates dozens of NSA’s members are collectively owed greater than $1 million from Mercato, with many having waited months. Till this yr, Mercato had been making common funds to the grocers, together with inside days of deliveries as much as a few weeks, he stated.
Native grocers stated the 10-year-old firm, which moved its headquarters from New York to San Diego in 2019, was a lifeline to some shops in the course of the pandemic. Mercato signed up impartial grocers that had not beforehand provided on-line buying.
“I used to be grateful to them to start with,” stated Diaz of Williamsburg, “They helped me to outlive when there have been only a few providers for the independents.”
Brannigan, a Brooklyn native, informed the San Diego Tribune in 2019 that in school he launched a web based enterprise promoting textbooks in 2001 — ValloreBooks — that grew to $100 million in gross sales. He offered the corporate in 2012 and invested in Uber and Twilio amongst different startups on the time, in line with the report.
Aris Duran, who owns a number of Key Meals places within the metropolis, was owed $45,000 at his School Level retailer in February. Mercato made small funds to chip away on the debt, however Duran received fed up and threatened to sue the corporate two weeks in the past.
All of the sudden he was paid in full with a verify for $23,000, he informed The Publish. However he’s vowed to not work with the corporate once more, notably because it charged him a $99 month-to-month service price even when it wasn’t paying for the groceries it had delivered to his clients.
A spokesperson for the town’s Division of Well being stated it’s nonetheless assessing methods to relaunch the backed program, which has been suspended since July 1.
“Groceries to Go supplies eligible New Yorkers with important entry to reasonably priced groceries on-line and for pickup or supply. As costs of groceries enhance, the significance of applications like this one have grown in want too. Whereas this system has been quickly paused, we’re exploring our choices in order that these sources proceed to succeed in New Yorkers in want.”
