Government-run grocery stores tend to be poorly-run, stocking too little of many items and too much of things that people don’t want. They may display clusters of rotting bananas, and lack many kinds of food you can find at Walmart, Safeway, and Kroger. But Illinois is wasting taxpayers’ money on a city-owned grocery store in a city with fewer and fewer people. Yesterday, Illinois Governor J.D. Pritzker said, “I’m announcing a $2.4M investment for” the city of Venice “to build a new, municipally owned grocery store.”
This idea is so dumb that even progressive government economists are critical of it. At the progressive web site Bluesky, NSF economist Mark Regets says, “I am not a ‘government is always incompetent’ person. BUT it really does not have the skills or infrastructure to run a large grocery store. The purchasing, pricing, and display of THOUSANDS of items is more complicated than many think.”
As another Bluesky poster observed, “It’s insane to use tax money to build a new grocery store in a town that’s lost 3/4 of its people, when they can just travel a short distance to other grocery stores.”
A city in Kansas lost $132,000 in 2022 on its municipally-owned grocery store, one example of how the government can’t manage grocery stores competently.
Yet some progressive officials want cities to have government-run grocery stores. Chicago’s Democratic mayor thinks it would be “innovative” to have “a municipally owned grocery store in Chicago.”
Government-run grocery stores are a bad idea, given how incompetently the government runs even things that should be easy to make a profit on, like liquor monopolies. A 2024 audit of the Michigan Liquor Control Commission (MLCC) found that the state’s complete inability to properly track its spirits inventory resulted in nearly a million dollars of liquor disappearing without a trace. $961,000 of the state’s liquor inventory—a massive 62,294 bottles—vanished between January and February 2022. The missing liquor was 20 percent of the state’s entire inventory.
If cities in Illinois really wanted to help people with groceries, they would eliminate their grocery taxes. Instead, 105 Illinois municipalities have recently passed grocery taxes. These grocery taxes, which are regressive, are one reason why Illinois is the state with the nation’s highest state and local taxes for people with median incomes (for people with high incomes, there are states that have even higher taxes, like New York and California).
