Mamdani OKs $75M grocery deal with delivery – Business News
Mayor Zohran Mamdani’s administration is mired in one more grocery store mess.
An online grocery platform that runs a metropolis program for low-income households has stiffed Big Apple grocers to the tune of more than $1 million — at the same time as town seeks to enlarge the company’s contract to a whopping $75 million, The Post has discovered.
San Diego-based Mercato — whose web portal lets eligible New Yorkers buy contemporary fruits and greens at a 50% low cost from native grocery shops all through the 5 boroughs — obtained $30.4 million over the previous 4 and a half years from town’s “Groceries to Go” program, metropolis data show.
Mercato helped unbiased grocers to interrupt into online purchasing and delivery. Mercato
Nevertheless, Mercato this 12 months has did not pay for more than $1 million in produce it delivered to clients months in the past from dozens of unbiased supermarkets, together with C-Town, Bravo and Key Food, based on store house owners.
“I had to hunt them down and basically beg them for $10,000 — and they still owe me $4,500,” stated Anthony Diaz, who manages a C-Town in Williamsburg, Brooklyn.
In Queens and the Bronx, Mercato owes Jorge Guillen’s two Cherry Valley Marketplace shops a mixed $36,000, based on the grocery store.
“The impact on our business is huge,” Guillen informed The Post. “It affects my ability to purchase goods and pay my bills, so we had to find new financing. We took on debt.”
Despite the mess, town’s Department of Health and Mental Hygiene not too long ago awarded Mercato a $75 million, six-year contract that was slated to start in July, based on public filings.
Dozens of unbiased grocery shops are owed more than $1 million from Mercato, based on the National Supermarket Association. Wheree.com
The health company informed The Post that it’s “unaware of delays in payments to supermarkets,” based on a spokesperson.
Approval of Mercato’s new contract is being held up by town Comptroller’s Office, which has “outstanding questions” for the DOHMH, based on a spokesperson for Comptroller Mark Levine.
Reached by The Post, the his spokesperson declined to elaborate on the company’s questions.
Last 12 months’s $30.4 million contract with Mercato, which has been a metropolis vendor since 2023, expired on June 30. According to town’s web site, the Groceries to Go program “has been paused and is not enrolling new participants at this time.”
Guillen says he had a Zoom call about a month in the past with Mercato’s chief govt Bobby Brannigan. Guillen stated Brannigan informed him Mercato was working behind on funds as a result of town had been delaying its reimbursements to Mercato.
Anthony Peña, president of the National Supermarket Association. NSA
“Usually Mercato deposits the funds in 48 to 72 hours,” Guillen informed The Post. “Now Mercato has not paid some NSA members since February.”
A spokesperson for the health division, nonetheless, stated that based mostly on a review of fiscal 2026 knowledge, all invoices from Mercato have been paid on time.
“We don’t know why our members are not being paid,” stated Anthony Peña, president of the National Supermarket Association, which represents about 450 unbiased grocers in New York City.
“But at the end of the day the city is not properly vetting a company that it is funding,” Peña added. “It begs the question of what will happen with these public grocery stores.”
Peña referred to Mamdani’s controversial, $70 million plan to open a government-run grocery store in every borough of town — a proposal that the NSA and different native grocer teams say will pose unfair competitors for his or her already struggling companies.
Brooklyn-born Bobby Brannigan based Mercato in 2015. Mercato
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 telephone calls and emails in search of remark.
Peña estimates dozens of NSA’s members are collectively owed more than $1 million from Mercato, with many having waited months. Until this 12 months, Mercato had been making common funds to the grocers, together with within days of deliveries up to a couple of weeks, he stated.
Local grocers stated the 10-year-old company, which moved its headquarters from New York to San Diego in 2019, was a lifeline to some shops during the pandemic. Mercato signed up unbiased grocers that had not beforehand provided online purchasing.
“I was grateful to them in the beginning,” stated Diaz of Williamsburg, “They helped me to survive when there were very few services for the independents.”
Brannigan, a Brooklyn native, informed the San Diego Tribune in 2019 that in faculty he launched an online business promoting textbooks in 2001 — ValloreBooks — that grew to $100 million in gross sales. He offered the company in 2012 and invested in Uber and Twilio amongst different startups on the time, based on the report.
Jorge Guillen owns two Cherry Valley Marketplace shops in Queens and the Bronx which can be owed about $36,000 by Mercato. Wheree.com
Aris Duran, who owns a number of Key Food places within the metropolis, was owed $45,000 at his College Point store in February. Mercato made small funds to chip away on the debt, however Duran bought fed up and threatened to sue the company two weeks in the past.
Suddenly he was paid in full with a test for $23,000, he informed The Post. But he’s vowed to not work with the company again, notably because it charged him a $99 month-to-month service payment even when it wasn’t paying for the groceries it had delivered to his clients.
A spokesperson for town’s Department of Health stated it’s nonetheless assessing how to relaunch the backed program, which has been suspended since July 1.
“Groceries to Go provides eligible New Yorkers with critical access to affordable groceries online and for pickup or delivery. As prices of groceries increase, the importance of programs like this one have grown in need too. While the program has been temporarily paused, we are exploring our options so that these resources continue to reach New Yorkers in need.”
