Executive summary
Food prices are not only a market issue. They are directly connected to household budgets, local social policy, small businesses, transport, residential districts and the responsibilities of local government. When everyday food becomes more expensive, this is not only an inflation statistic – it is a question of how families live every week.
BTU researchers explain that food affordability is especially sensitive for Georgia. According to 2025 data from the National Statistics Office of Georgia, average monthly income per household reached GEL 2,131, while average monthly expenditure per household amounted to GEL 1,936. At the same time, food, beverages and tobacco accounted for 38.7% of household cash consumption expenditure. This means that food is one of the most important and most visible parts of everyday household spending.
International examples show that some cities no longer leave food access entirely to private market decisions. Fast Company’s Summer 2026 issue describes the example of Atlanta, where the city center had lacked a full-service grocery store for decades. Private retail chains were not entering the area, so the city supported the creation of Azalea Fresh Market – a grocery store developed through a public-private partnership.
The Atlanta model is not a ready-made recipe for Georgia. But it shows an important principle: when access to quality and affordable food is limited in a district, city or settlement, local government can try not to replace the market, but to create infrastructure that better connects private operators, local producers and citizen needs.
Georgia context: household budgets and the price of food
For many families in Georgia, food prices are not an abstract economic issue. They are a weekly question: how much will bread, milk, eggs, oil, vegetables, baby food or a basic grocery basket cost?
For a household living from paycheck to paycheck, even a 5–10% price difference in basic products can matter. If the store is far away, transport costs are added. If choice is limited, the consumer is forced to buy where prices are higher. If a large retail chain is absent from a small town or suburban district, the everyday food basket may become a heavier burden than national averages suggest.
This is why the question of whether a city can influence food prices is not only about social assistance. It is also about urban economic infrastructure: where the store is located, what the basic basket costs, how close products are to consumers, how many intermediaries exist between the farmer and the shelf, and how many costs are added to the final price.
What happened in Atlanta
For years, downtown Atlanta had an unusual problem: the population was growing, there were offices, university housing and new residential developments, but a full-service grocery store still did not open. For private retail chains, the area was not attractive enough.
The reason may have been low margins, high rent, logistical complexity, income structure or the fact that larger chains saw other districts as more profitable. In grocery retail, profit margins can be very low, which means that opening a store is not commercially attractive everywhere.
The city decided not to leave food access entirely to the preferences of the private market. In September 2025, Azalea Fresh Market opened in a former Walgreens space. It is not a fully state-run store. The model is based on a public-private partnership: the city, local development institutions, a private grocery operator and other partners jointly create a store that functions both as a commercial object and as a public-interest space.
The city’s role is not to manage daily retail operations. Its role is to reduce some of the costs that make it difficult for private businesses to enter certain areas. When a municipality supports space, infrastructure or initial investment, the store does not need to pass all of those costs on to consumers.
Why a grocery store can become a public-interest issue
A grocery store is usually seen as a private business: someone opens it, sells products, earns profit or closes. But food is more complicated. If a district does not have a nearby, affordable and full-service grocery store, the effect is not only inconvenience. It affects health, household expenses, children’s nutrition, the daily lives of older people and the vitality of the local economy.
In international urban policy debates, such areas are often called “food deserts.” This does not mean that there is no food at all. It means that residents lack easy access to quality, diverse and affordable products.
This concept should be applied carefully to Georgia, but similar problems exist in different forms. In small towns, villages, suburbs or newly built residential zones, competition may be limited. In some places, people buy everyday products at higher prices because there are few alternatives. Some households need to pay transport costs to reach a larger supermarket. In some regions, quality products may be available seasonally, but not throughout the year.
This is why grocery infrastructure can become part of urban policy. It is everyday infrastructure, just like transport, schools, clinics or public spaces.
Can a city actually lower prices?
A city usually cannot directly lower the price of every product in the market. If fuel becomes more expensive, imports cost more, the exchange rate changes or global wheat, milk or oil prices rise, a municipality cannot make those factors disappear.
But a city can influence the components that enter the final price: rent, logistics, space, initial investment, supply channels, links with local producers, scale and operational efficiency.
The Atlanta model works through exactly this logic. Price reduction does not happen by order. It happens by changing the cost structure. The city does not say: “We control prices.” It says: “Where the market does not provide a necessary service to residents, we help create conditions that bring market logic and public interest closer together.”
For Georgia, this distinction is very important. Administrative price control often creates the risk of shortages, lower quality or market exit. Cost reduction, more competition and better supply chains are healthier tools.
Why this matters for Georgia
In Georgia, food prices are among the most sensitive public issues. In 2025, average monthly income per household was GEL 2,131, while average monthly expenditure per household was GEL 1,936. This shows that the average household budget is already heavily loaded. When 38.7% of household cash consumption expenditure goes to food, beverages and tobacco, even a small change in food prices can have a real effect.
At the same time, the official subsistence minimum for a working-age male was GEL 283.3 in December 2025. This indicator does not describe a comfortable life; it reflects minimum needs. That is why food affordability should be understood not only as a price issue, but as a question of household economic resilience.
This matters for Georgia in four directions.
The first is the household budget. If basic products become even slightly cheaper, this is a real relief for low- and middle-income families. This is especially true for bread, dairy products, vegetables, oil, eggs, baby food and other everyday items.
The second is regional inequality. Tbilisi and large cities have more choice, but in small towns and villages competition is often limited. If municipalities can better organize local products, logistics and retail space, food access in the regions may improve.
The third is local production. A municipal or cooperative grocery space may become a channel for small farmers who struggle to enter large retail chains. This is especially relevant for vegetables, fruit, dairy products, honey, bakery products and local processed food.
The fourth is a new logic of social policy. Social policy is often understood only as cash assistance. But infrastructure that reduces everyday expenses can also be powerful. If a household spends less on food every week, the effect may be as important as one-time support.
How this model could be adapted to Georgia
The idea of a municipal grocery store should not be transferred to Georgia directly or mechanically. The American model is an example, not a ready-made solution. Several possible forms may be more realistic for the Georgian context.
The first option is a pilot social grocery center in a district or town where lack of access to affordable products is clearly visible. This should not simply be a “cheap store.” It should be a data-based project: population size, income levels, transport access, existing store prices, the basic food basket and the capacity of local producers should be assessed in advance.
The second option is to provide municipal space to a private operator under clear conditions: for part of the basic food basket, prices should be below the market average or based on a transparent margin. In this case, the city does not become a retailer; it creates an economic condition that allows the business to offer lower prices.
The third option is to connect local farmers with the city grocery model. If a municipality supports direct delivery of farm products, some intermediaries can be reduced. For consumers, this may mean lower prices. For farmers, it means stable sales. For the city, it means stronger local economic circulation.
The fourth option is a social card or targeted discount. Prices may remain market-based for all consumers, while vulnerable groups, pensioners, large families or students receive targeted discounts on selected products. This type of system is less damaging to the market than artificially low prices for everyone.
The fifth option is a cooperative grocery store, where local residents, farmers, small suppliers and the municipality jointly create the store. This may work especially well in small towns where the market is not large enough, but the public need is clear.
Risks and what Georgia should consider
The idea has several important risks.
The first risk is inefficient management. If the store becomes bureaucratic, slow and uncompetitive, it will not retain customers. Operational management should therefore be assigned to a professional private operator or a strong cooperative structure.
The second risk is damage to existing small stores. If a municipality creates an unfair advantage for one store without considering existing businesses, small entrepreneurs may suffer. The goal should be to fill a market gap, not to push competitors out.
The third risk is political use. A “cheap store” can easily become an election promise. This is why independent evaluation, transparent budgeting, open price monitoring and public reporting of results are necessary.
The fourth risk is dependence on subsidies. If the store exists only through permanent budget support and does not create a viable model, it will not work in the long run. Support should be smart: space, logistics, initial investment, technology and local supply chains – not endless loss coverage.
The fifth risk is quality decline. Lower prices should not mean lower quality. Food safety, origin control, storage conditions and consumer trust are especially important in this model.
BTUAI assessment
BTUAI assesses that the municipal grocery idea is interesting for Georgia not as a simple answer to rising prices, but as a new type of urban economic instrument. The main question is not whether a municipality should become a retailer. The real question is whether a city can create infrastructure that better connects the private market, local producers and citizen needs.
BTU researchers assess that the most appropriate direction for Georgia would be a data-based pilot model. First, it is necessary to identify where the real problem exists: which district or town has a basic food basket above the average; where competition is limited; where residents need additional transport costs to reach a grocery store; and where local farmers can be included.
After that, a small, transparent and results-oriented pilot can be created. If the pilot shows that basic products become cheaper, quality does not decline, local producers become stronger and existing small businesses are not harmed, then the model can be expanded.
BTUAI’s view is that food affordability will become a more important issue for Georgian cities in the coming years. Rising prices, urban expansion, regional inequality and the need to support local production create a new reality: cities can no longer think only about roads, parks and construction. They also need to think about how families live every day – where they buy bread, what vegetables cost, how long it takes to reach a store and whether they have real access to quality food.
Key findings
- Food prices are not only an economic indicator – they shape everyday family life and urban social stability.
- The Atlanta example shows that municipal support can be used where the private market does not adequately serve residents.
- A city can influence prices not through administrative control, but by reducing costs, offering space, improving logistics and organizing supply chains.
- In Georgia, food, beverages and tobacco account for 38.7% of household cash consumption expenditure, making the issue highly sensitive.
- A municipal or cooperative grocery model may support both consumers and local producers.
- The main risks are inefficient management, political use, subsidy dependence, damage to small private stores and lower quality.
- The best approach for Georgia is a data-based small pilot, not large-scale unprepared implementation.
- Food access should be seen as part of urban economic infrastructure.
Data snapshot
Average monthly income per household in Georgia in 2025 – GEL 2,131.
Average monthly income per capita in 2025 – GEL 664.
Average monthly expenditure per household in 2025 – GEL 1,936.
Average monthly expenditure per capita in 2025 – GEL 603.
Share of food, beverages and tobacco in household cash consumption expenditure in 2025 – 38.7%.
Subsistence minimum for a working-age male in December 2025 – GEL 283.3.
City investment in Atlanta’s Azalea Fresh Market model across two locations – USD 8 million.
Reported price difference in the Atlanta model compared with similar corporate grocery stores – approximately 18–22% lower.
Grocery retail industry profit margins may be as low as about 1% in some cases.
Methodology
This report was prepared as part of BTUAI Research. The analysis is based on demographic, regional, economic and behavioral data, as well as general trends observed in publicly available sources. The materials are processed using analytical methods applied by BTU researchers, with the support of BTUAI.
The purpose of the research is not to provide personal assessments, but to identify broader trends and practical directions for business, education and society.
In this specific material, international urban experience is connected to Georgia’s local government context, household expenditures, food access, retail infrastructure, small businesses and local producers.
Limitations
This material is analytical and educational in nature. It does not constitute financial, investment, legal or official municipal policy advice. Before making a specific decision, additional assessment is needed from relevant specialists, local government bodies and experts in competition, financial sustainability, food safety and legal regulation.
The Atlanta example does not mean that the same model will automatically work in Georgia. It is used to show a principle: how a city can try to fill a market gap through public-private cooperation.
Municipal intervention should be careful, data-based and limited by time and measurable results, so that it does not harm competition, small businesses or budget sustainability.
Sources
Fast Company, Summer 2026 – description of Atlanta’s Azalea Fresh Market model.
National Statistics Office of Georgia – household income and expenditure indicators, 2025.
National Statistics Office of Georgia – subsistence minimum, 2025.
BTUAI analytical processing for the context of food prices, local government, urban economy and retail infrastructure in Georgia.
Frequently asked questions
Does a municipal grocery store mean that the city should replace private business?
No. The correct model is not to replace the private market, but to fill a market gap where residents have limited access to quality and affordable food.
Can a city directly lower food prices?
A city cannot eliminate global prices, import costs or fuel prices. But it can reduce some of the costs that enter the final price – rent, space, logistics, initial investment and supply-chain inefficiencies.
Where could such a pilot be tested in Georgia?
A pilot could begin in a small town, suburban district or settlement where the basic food basket is relatively expensive, choice is limited and local producers could potentially be included.
What is the main risk?
The main risk is that the idea becomes a political promise without a sustainable business model, harms existing small stores or becomes permanently dependent on subsidies.
How should success be measured?
Success should be measured by several indicators: whether the price of the basic basket declined, whether the share of local products increased, whether access to quality food improved, whether small businesses were not harmed and whether the model is financially sustainable.
Keywords
municipal grocery store; food affordability; food access Georgia; Georgian households; subsistence minimum Georgia; household expenditure Georgia; local government; public-private partnership; retail infrastructure; small farmers; urban economy; regional inequality; BTUAI; Business and Technology University.
Citation format
BTUAI Research Team. “Can a City Lower Food Prices? What a Municipal Grocery Model Could Mean for Georgia.” Business and Technology University, BTUAI.ge, 2026.
Prepared by the academic team of Business and Technology University and the BTUAI Research Team.
Tbilisi, Georgia
BTUAI is an analytical platform of Business and Technology University that studies the impact of artificial intelligence, digital transformation, innovation, startup ecosystems, data analytics and emerging technologies on business, the economy, education and society. BTUAI materials are designed to explain complex technological and economic changes in a clear, reliable and Georgia-focused way.