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3w ago

NYC Pauses Groceries Program as $75M Mercato Contract Faces Comptroller Review

Comptroller questions of a six-year award come as independent grocers say unpaid Mercato invoices have strained their businesses and the city’s subsidized online service remains suspended.

An image collage containing 5 images, Image 1 shows A Mercato.com registration page for independent grocers, overlaid on a shopping cart filled with fresh produce, Image 2 shows Anthony Pena, president of the National Supermarket Association, Image 3 shows Bobby Brannigan in a supermarket, Image 4 shows Produce section of Cherry Valley Marketplace, Image 5 shows Cherry Valley Marketplace grocery store in Elmhurst, NY
A man holding a phone next to another man holding a bunch of bananas with a "30% off" sticker.

Overview

  • The Department of Health moved to award Mercato a six-year, $75 million Groceries to Go contract but the city comptroller has placed final approval on hold while asking the health agency questions about the deal.
  • Dozens of independent New York City grocers represented by the National Supermarket Association say Mercato owes them more than $1 million for deliveries made months ago and that delayed payments forced some stores to take on debt or seek new financing.
  • Mercato has been a city vendor since 2023 and previously received about $30.4 million from Groceries to Go, and the city’s program is currently paused and not enrolling new participants.
  • The health department says a review found Mercato invoices were paid on time, a claim grocers dispute; Mercato did not respond to reporter inquiries and its CEO reportedly told some merchants that the company was waiting on city reimbursements.
  • City plans for five Mamdani Marts with roughly $70 million in capital raise fresh questions about vendor vetting and subsidy design and could heighten legal and political scrutiny if the Mercato payment disputes are not resolved.