If someone else owns it, they're going to want to extract profit for themselves and it's a very different situation than just getting an employee. For example, compare renting with being part of something like a condominium association.
Building capital and controlling things oneself is the thing to do with almost everything.
Why would you expect a subsidy to be as efficient?
On the other hand, if the business model is simple enough, co-owning it might make sense.
However, I think Soviet problems are in part due to a near-total absence of market mechanisms and of game-theoretic thinking-- i.e. 'what is this state enterprise actually incentivized to do', so I don't think it's applicable to these kinds of things unless they get ossified.
Selection + survivor bias. The system only advertises successful private businesses. Not gigantic cooperatives that succeed in a global scale:
https://www.commondreams.org/views/2012/06/25/yes-there-alte...
Private ownership opens it to all sorts of exploitation of workers or customers, plus if you subsidize it, you just move the politicking to the subsidy contract, and the bad decision making to the owner.
The whole article is about how "market efficiency" has let down the small town. The town is simply too small to profitable enough for private businesses: as evidenced by no one chosing to buy the business for years.
Around the world, there are many (partially) publicly owned logistics companies (airlines, cargo shipping lines) that are good examples of this working well. They can easily be profitable for the government owning them during the good times, they can actually run leaner with smaller rainy-day funds and be competitive with the private companies they are competing with. They can also operate in markets where private companies might choose to not operate, and can even drive more business to a country. Then when the bad times come around (for example, covid19 shutdowns), they can rely on government subsidies to get though the harsh times reasonably unscathed, while private companies might end up needing to do extreme cuts, or even go bankrupt.
With your example of the USSR, we are talking about an economy where every single business is collectively owned. And then to make things worse, the entire supply chain is collectively owned, and centrally planned. You can hire a good manager for the local store, but they aren't going to be able to change a thing when the government doesn't allocated them enough product to sell. You can't have two local stores compete with each other, they are both collectively owned and supplied by the same centrally managed supply chain.
It wasn't the collective ownership of the store that failed the USSR. It was the central planning of the whole economy.
With this example of a small small town grocery store, there is plenty still competition. There is the local Dollar General with it's shitty product selection. There is another government owned supermarket a in a town 9 miles away, operated by a different government. There are privately owned supermarkets in at least three larger town within 30 miles, and a town large enough for Walmart 45 miles away. There are probably also grocery delivery services (or at least amazon) covering the areas.
It will be forced to be competitive, and all the numbers are public for the residents to see.
If I'm a wage-paid employee in a large shop (or any organization), then I'm looking to a) not get fired b) get a raise c) get a promotion. The bigger and more bureaucratic the organization, the more personnel decisions tend to become disconnected from ground truths and the more it becomes possible to rise through politics, whether or not the shop gets better. The people at the top, e.g. the owners of Walmart, want their shops to be more efficient, but if line worker #529 doesn't think he'll be paid more for making his local shop 5% more efficient, then he won't- and if there are more reliable ways up, he'll take those.
When a government owns/runs the shop, even the people at the top don't care about it making money- it's not their money to lose! The shop is probably useful as a political tool/division point, though. Imagine left-right debates about whether the government store should stock condoms, or meat, or whatever.