Mayor Mamdani Approves $75 Million Contract for Grocery Delivery Despite Unpaid Bills

Mayor Zohran Mamdani's administration is facing scrutiny over a contract with an online grocery platform, Mercato, which has reportedly failed to pay over $1 million owed to New York City supermarkets. The San Diego-based company, which operates the 'Groceries to Go' program for low-income households, has received $30.4 million from the city in the past four and a half years. However, store owners claim they have not been compensated for produce delivered months ago. Anthony Diaz, a manager at C-Town in Brooklyn, stated he is still owed $4,500 after struggling to collect $10,000 from Mercato. Jorge Guillen, who owns two Cherry Valley Marketplace stores, reported that Mercato owes him $36,000, impacting his ability to maintain business operations. Despite these issues, the city's Department of Health and Mental Hygiene awarded Mercato a new six-year contract worth $75 million, which is currently under review by the city Comptroller’s Office due to outstanding questions. Guillen indicated that Mercato's delays in payments are attributed to the city’s reimbursement delays. The health department maintains that all invoices have been paid on time. Anthony Peña, president of the National Supermarket Association, expressed concerns about the vetting process for companies receiving city funding, particularly in light of Mamdani's plan to open government-run supermarkets that could compete with local grocers. Mercato, which has operated in several major U.S. cities, did not respond to requests for comment. Local grocers noted that Mercato was initially beneficial during the pandemic, but issues with payment have led to frustration and lost trust. The city is currently assessing options to relaunch the paused 'Groceries to Go' program.