An online grocery platform that runs a city program for low-income households has stiffed Big Apple grocers to the tune of more than $1 million — even as the city seeks to enlarge the company’s contract to a whopping $75 million, The Post has learned.
asserted
Post → run → million
San Diego-based Mercato — whose web portal lets eligible New Yorkers purchase fresh fruits and vegetables at a 50% discount from local grocery stores throughout the five boroughs — received $30.4 million over the past four and a half years from the city’s “Groceries to Go” program, city records show.
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records → base → program
Nevertheless, Mercato this year has failed to pay for more than $1 million in produce it delivered to customers months ago from dozens of independent supermarkets, including C-Town, Bravo and Key Food, according to store owners.
uncertain
it → fail → owners
“I had to hunt them down and basically beg them for $10,000 — and they still owe me $4,500,” said Anthony Diaz, who manages a C-Town in Williamsburg, Brooklyn.
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who → have → Williamsburg
In Queens and the Bronx, Mercato owes Jorge Guillen’s two Cherry Valley Marketplace stores a combined $36,000, according to the grocer.
uncertain
Mercato → owe → grocer
“The impact on our business is huge,” Guillen told The Post.
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Guillen → tell → Post
“It affects my ability to purchase goods and pay my bills, so we had to find new financing.
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we → affect → financing
We took on debt.”
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We → take → debt
Despite the mess, the city’s Department of Health and Mental Hygiene recently awarded Mercato a $75 million, six-year contract that was slated to begin in July, according to public filings.
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that → award → filings
The health agency told The Post that it is “unaware of delays in payments to supermarkets,” according to a spokesperson.
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it → tell → spokesperson
Approval of Mercato’s new contract is being held up by the city Comptroller’s Office, which has “outstanding questions” for the DOHMH, according to a spokesperson for Comptroller Mark Levine.
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which → hold → Levine
Reached by The Post, the his spokesperson declined to elaborate on the agency’s questions.
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spokesperson → reach → questions
Last year’s $30.4 million contract with Mercato, which has been a city vendor since 2023, expired on June 30.
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which → expire → June
According to the city’s website, the Groceries to Go program “has been paused and is not enrolling new participants at this time.”
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program → accord → time
Guillen says he had a Zoom call about a month ago with Mercato’s chief executive Bobby Brannigan.
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he → say → executive
Guillen said Brannigan told him Mercato was running behind on payments because the city had been delaying its reimbursements to Mercato.
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city → say → Mercato
“Usually Mercato deposits the funds in 48 to 72 hours,” Guillen told The Post.
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Guillen → deposit → Post
“Now Mercato has not paid some NSA members since February.”
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Mercato → pay → February
A spokesperson for the health department, however, said that based on a review of fiscal 2026 data, all invoices from Mercato have been paid on time.
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invoices → say → time
“We don’t know why our members are not being paid,” said Anthony Peña, president of the National Supermarket Association, which represents about 450 independent grocers in New York City.
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which → know → City
“But at the end of the day the city is not properly vetting a company that it is funding,” Peña added.
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Peña → vet → that
“It begs the question of what will happen with these public grocery stores.”
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what → beg → stores
Peña referred to Mamdani’s controversial, $70 million plan to open a government-run supermarket in each borough of the city — a proposal that the NSA and other local grocer groups say will pose unfair competition for their already struggling businesses.
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NSA → refer → businesses
Mercato — which also has operated in major cities including San Francisco, Chicago, Denver, Philadelphia, Austin, Texas, and Washington, DC — did not return multiple phone calls and emails seeking comment.
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which → operate → comment
Peña estimates dozens of NSA’s members are collectively owed more than $1 million from Mercato, with many having waited months.
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many → estimate → Mercato
Until this year, Mercato had been making regular payments to the grocers, including within days of deliveries up to a couple of weeks, he said.
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he → make → weeks
Local grocers said the 10-year-old company, which moved its headquarters from New York to San Diego in 2019, was a lifeline to some stores during the pandemic.
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which → say → pandemic
Mercato signed up independent grocers that had not previously offered online shopping.
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that → sign → shopping
“I was grateful to them in the beginning,” said Diaz of Williamsburg, “They helped me to survive when there were very few services for the independents.”
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me → say → independents
Brannigan, a Brooklyn native, told the San Diego Tribune in 2019 that in college he launched an online business selling textbooks in 2001 — ValloreBooks — that grew to $100 million in sales.
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that → tell → sales
He sold the company in 2012 and invested in Uber and Twilio among other startups at the time, according to the report.
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He → sell → report
Aris Duran, who owns several Key Food locations in the city, was owed $45,000 at his College Point store in February.
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who → own → February
Mercato made small payments to chip away at the debt, but Duran got fed up and threatened to sue the company two weeks ago.
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Duran → make → company
Suddenly he was paid in full with a check for $23,000, he told The Post.
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he → pay → Post
But he’s vowed not to work with the company again, particularly since it charged him a $99 monthly service fee even when it wasn’t paying for the groceries it had delivered to his customers.
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it → vow → customers
A spokesperson for the city’s Department of Health said it is still assessing how to relaunch the subsidized program, which has been suspended since July 1.
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which → say → July
As prices of groceries increase, the importance of programs like this one have grown in need too.
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importance → increase → need
While the program has been temporarily paused, we are exploring our options so that these resources continue to reach New Yorkers in need.”
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resources → pause → need
Mercato helped independent grocers to break into online shopping and delivery.
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grocers → help → shopping
Dozens of independent grocery stores are owed more than $1 million from Mercato, according to the National Supermarket Association.
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Dozens → owe → Association
…and 2 more, not listed.
