Empire Company Limited, the parent company of Sobeys, has unveiled a new strategy to address competition in the regions where its stores are situated. The company recently announced a shift in its utilization of “property controls,” which are legal agreements that can impede competitors from establishing stores in specific areas. These controls, which have been utilized for years, have the potential to restrict the opening of new grocery outlets, leading to concerns among critics regarding reduced competition and increased travel distances for affordable groceries.
In response to mounting scrutiny in this area, Empire acknowledged the importance of ensuring the appropriate use of property controls. Since 2024, the Competition Bureau of Canada has been investigating the application of property controls and has taken steps to compel Empire to provide documentation and testimony for its inquiry. While the bureau has not made any determinations of misconduct, it recommended in 2023 that provinces and territories take measures to restrict or prohibit property controls in the grocery sector. Manitoba took action in June 2025 to implement this recommendation.
The Competition Bureau’s scrutiny has been focused on the Halifax Regional Municipality, although the implications of the investigation extend nationwide. Jenna Khoury-Hanna, an associate lawyer at Kinch Eddie Litigation, expressed optimism about the potential opportunities arising from the announced changes. She had previously conducted research on the presence of restrictive covenants on former Sobeys locations in Halifax during her time at Dalhousie University’s Schulich School of Law.
Empire’s decision entails refraining from establishing new restrictive covenants and relinquishing enforcement of existing ones, even those on previously sold properties. The company is also revising its approach to exclusivity clauses, which are typically included in long-term leases to restrict nearby stores from selling specific products carried by the major grocer.
While experts like Jamie Baxter, an associate professor at Dalhousie’s law school, commended Empire’s commitment, concerns persist about the lack of transparency surrounding property controls. The move by Empire aligns with similar actions taken by other major players in the industry, such as Walmart Canada and the parent company of Loblaws, to move away from property controls.
The impact of these changes on the Canadian grocery market remains uncertain, with varying potential outcomes depending on the location. Pascal Thériault, an agricultural economist at McGill University, noted that while smaller communities might benefit from the shift, the impact in larger urban areas could be limited for consumers. The move by Empire reflects a broader trend within the industry towards reevaluating the use of property controls in the grocery sector.