Empire Company Limited, the parent company of Sobeys, recently unveiled a new strategy to address competition in the areas surrounding its stores. The company disclosed its decision to revise the utilization of “property controls,” which are contractual arrangements aimed at preventing competitors from establishing stores in specific locations. These agreements have been a longstanding practice, regulating where new grocery outlets can be established.
Acknowledging the growing scrutiny in this domain, Empire emphasized the importance of ensuring the appropriate usage of these property controls. The Competition Bureau of Canada has been investigating the use of property controls since 2024, seeking court orders to obtain documentation and testimony from Empire as part of its inquiries. Notably, no definitive findings of misconduct have been made thus far.
In 2023, the Competition Bureau recommended that provinces and territories take actions to restrict or prohibit property controls in the grocery sector. Manitoba acted on this advice in June 2025. Although the bureau’s investigation initially centered on the Halifax Regional Municipality, its implications extend across the nation.
Jenna Khoury-Hanna, an associate lawyer at Kinch Eddie Litigation, expressed optimism about the implications of this development. Her prior research, conducted during her time at Dalhousie University’s Schulich School of Law in 2019, revealed numerous restrictive covenants on former Sobeys locations in Halifax, including areas like Gottingen Street and Woodside. Khoury-Hanna anticipates new opportunities emerging for businesses in these locations following Empire’s announcement.
Empire’s decision entails refraining from establishing new restrictive covenants and ceasing enforcement of existing ones, even on previously sold properties. The company is also restricting the application of exclusivity clauses, commonly included in long-term leases to limit nearby stores from selling specific products carried by major retailers.
While industry experts like Jamie Baxter, an associate professor at Dalhousie’s law school, welcomed Empire’s commitment, concerns remain about the lack of transparency surrounding property controls. Public visibility into the enforcement of these agreements is limited, primarily at the discretion of individual property owners.
The move by Empire aligns with similar initiatives by other major players in the grocery sector, such as Walmart Canada and the parent company of Loblaws, who have also pledged to move away from property controls. The impact of these shifts on the Canadian grocery market remains uncertain, with varying expectations depending on the region and community size.
Experts like Pascal Thériault, an agricultural economist at McGill University, suggest that the removal of property controls may have a more pronounced effect in smaller communities, potentially enabling a broader range of businesses to establish themselves. However, the impact on consumers in larger urban areas might be more limited. Thériault highlighted the importance of local contexts in determining the outcomes of these changes.
In conclusion, Empire’s decision to revise its use of property controls marks a significant shift in the grocery industry, reflecting a broader trend towards promoting competition and consumer choice.
