Can a City Run Grocery Store Survive?

Can a City Run Grocery Store Survive?

In May 2025, the Tallahassee City Commission approved nearly $1.3 million to build a small grocery store in Griffin Heights, aiming to provide residents with easier access to fresh foods in a neighborhood recognized as a food desert.

Officials recently held a groundbreaking ceremony. However, no operator has yet been found and the small size of the store, around 2,500 square feet versus around 40,000 square feet for a chain supermarket, could make the search even tougher. Still, officials say city staff can find the right person for the job.

A grocery store in Griffin Heights could have a meaningful impact. It would provide healthier food options nearby for residents who may lack transportation or funds. Economically, the store could create jobs, keep money circulating locally, and encourage other businesses to open in the area. Beyond finances, it promotes healthier lifestyles and reduces one source of stress for families already managing challenges like housing and transportation.

Cities nationwide have started taking a similar approach. For example, in Atlanta, Georgia, a government-funded grocery store opened in September 2025 to serve underserved neighborhoods, according to city reports.

However, these initiatives face challenges.

The Rise Market, a community-funded store opened in June 2023 in Cairo, Illinois, aimed to provide affordable groceries to residents who previously traveled up to 10 miles for food, according to a Pulitzer Center article. It struggled to compete with larger chains that could sell products at lower prices. To make matters worse, dollar stores and small chains in the area upgraded offerings to include fresh food and other products, drawing even more customers away from an already struggling Rise Market. The store also could not consistently restock, since revenue was too low to purchase new inventory, creating a cycle that further hurt profitability.

Closer to home, the Baldwin Market in Baldwin, Florida, opened in 2019 to serve residents living more than 10 miles from other grocery stores. According to an article from the Jacksonville, Florida, Times-Union, the city covered payroll and operational costs, but larger chains’ pricing power made profitability impossible. By 2022, revenue was just over $800,000 while costs totaled $985,000, leaving a $171,000 deficit. The store closed in 2024 after ongoing financial losses.

Research indicates that while profitability is elusive in most of the city run models, success is more obtainable when stores serve a clear public need and serve a closeknit community. In addition, it is important for policymakers to understand that successful or partially successful efforts depend on subsidies, donations, tax breaks, or favorable real estate, rather than being fully self-sustaining.

History shows government-funded markets often struggle to compete with national and regional chains. Success in Griffin Heights may depend on careful planning, strong community engagement, and strategies to keep prices competitive and shelves stocked.

15 Responses to "Can a City Run Grocery Store Survive?"

  1. What I wonder is if groceries are in such high demand why doesn’t the Time Saver across the street offer more food?

    Realistically can the city scale back the building and host a weekend farmers market?

  2. And another thing:
    Everyone of the downtown clowns who voted to waste $20,000 of taxpayer money to paint that stupid “Black Lives Matter “ mural on Gaines Street should be required to pay us back out of their own pockets.

    Too bad they can’t disappear as fast as the mural did.

  3. Everyone running for a city or county commissar seat should be using this fiscal debacle in their campaign ads. As long as the downtown clowns block us from having single member districts, the taxpayer money in the northeast will be hoovered up to the fullest extent possible to pay for ridiculous projects like this in other parts of the county.

    How much more of this foolishness are you willing to tolerate?

    DE-ANNEXATION: The only solution.

  4. Didn’t a Dollar General already close there?

    There is no such thing as a food desert. None. It’s a made-up silly thing to scare people into buying a solution that doesn’t exist for a problem that isn’t real.

    This is NOT a thing ANY government should be doing. At all.

  5. There are so many ways this will be a Money Pit for the Tax Payers. The City has been complaining about Money Shortages for a while now which is why they need to go UP on everything and pouring $1.3Million into this Project, KNOWING that is no where near enough to build it the way they like to over design everything, it’s just the Tip of the Ice Berge.

  6. If a private business could operate at that location they would already be doing so. Instead the city of Tallahassee will waste millions of our tax dollars trying to force a square peg in a round hole.

  7. Sigh … $1.3 Million … Sigh … if only someone … anyone in Florida’s Republican Administration had the scones to kick down the door at The City Commission and DOGE this travisty and the entire City and County finances.
    Sigh … Sigh … Sigh

  8. When this social engineering, vote pandering project fails, and it will, because socialism always fails, current politicians will never be held accountable for wasting our tax dollars. And still, we continue to recycle/re-elect the same like minded candidates to office.
    We have no one to blame but ourselves.

  9. Why not ask successful food retailers like Walmart and Publix for recommendations, and maybe even partnerships to mitigate the particular “food desert” problem? Walmart has ‘outpost’ stores in rural some communities, so they have a lower volume model that clearly can succeed. I’ve also seen incredibly remote dollar stores that had an amazing array of groceries.

  10. The only way they could make it profitable would be to contract with farms for local produce and/or buy a farm that’s worked with volunteer and community service workers. Doubt they’d ever be able to offer meat at a profit.

    Knowing the city I wouldn’t be surprised if they managed to ruin even that. Probably require the farm to be located inside of the city limits which means it can’t be profitable. Would have been better if they financed an Aldi for that location tbr.

  11. So they approved $1.3 million in funding a grocery store, yet had no businesses offer to do it? AND a groundbreaking. I must be reading this article wrong. Please tell me that is not true? Typical action. Approving “feel good” initiatives without thinking it through.

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