Empire Company Limited, the parent company of Sobeys, has unveiled a new strategy to address competition in the areas surrounding its stores across Canada. The company announced on Tuesday that it will be revamping its approach to utilizing “property controls,” which are legal agreements that have the ability to impede competitors from establishing stores in specific locations. These controls, which have been in use for years, can restrict the opening of new grocery stores and have faced criticism for potentially reducing competition and necessitating consumers to travel longer distances in search of affordable groceries.
In a statement, Empire acknowledged the heightened scrutiny in this area and emphasized the importance of ensuring the appropriate use of property controls. The Competition Bureau of Canada has been investigating the utilization of property controls since 2024 and has taken legal action to compel Empire to provide documentation and testimony for its inquiry, although no conclusions of misconduct have been drawn. Additionally, in 2023, the bureau recommended that provinces and territories take measures to restrict or prohibit property controls within the grocery industry, a move that Manitoba implemented in June 2025.
The Competition Bureau’s focus has been on the Halifax Regional Municipality, but the investigation holds significance for the entire country. Jenna Khoury-Hanna, an associate lawyer at Kinch Eddie Litigation in Campbellford, Ont., expressed optimism regarding the potential for new business opportunities to emerge following Empire’s announcement. Khoury-Hanna conducted research during her time at Dalhousie University’s Schulich School of Law in 2019, which revealed several restrictive covenants on former Sobeys locations in Halifax, including areas like downtown Halifax’s Gottingen Street and Dartmouth’s Woodside neighborhood.
Empire has confirmed that it will refrain from establishing new restrictive covenants and will not enforce existing ones, even on properties that have been previously sold. The company is also scaling back its use of exclusivity clauses, which are attached to long-term leases to restrict nearby stores from selling certain products carried by major grocers, such as bread. While experts like Jamie Baxter, an associate professor at Dalhousie’s law school, welcomed Empire’s commitment, he highlighted the lack of public transparency surrounding property controls, as enforcement typically rests with individual property owners.
The impact of Empire’s decision on the Canadian grocery market remains uncertain, with differing viewpoints on its effects in various regions. Pascal Thériault, an agricultural economist at McGill University, suggested that the move could have a positive impact in smaller communities by potentially opening doors for new businesses. However, in larger urban areas, the impact on consumers may be more limited. Thériault noted that Empire joins other major players in the industry, such as Walmart Canada and the parent company of Loblaws, who have already announced plans to shift away from property controls.