Amy Crossley carefully selected meat specials while contemplating the financial burden faced by parents with young children to feed. Expressing her concerns, she commented on the high grocery bills, especially since her children have grown up and left home. Shopping at Gateway Meat Market, a renowned independent store in Dartmouth, N.S., Amy praised the store for its attractive specials that draw customers from across the province. She expressed her desire to see more family-run, affordable stores like Gateway.
An investigation initiated by the Competition Bureau Canada last year is examining the hindrances faced by new grocers aiming to establish themselves in the Halifax Regional Municipality. The focus of the investigation is on property controls employed by major retailers like Sobeys and Loblaw, which can impede competitors from opening stores on specific properties. While the primary scope is the Halifax area, the investigation also encompasses property control practices nationwide.
The scrutiny has encountered various developments, including attempts by Sobeys’ parent company to halt the investigation and an announcement by Superstore’s parent company in February declaring the removal of property controls from its HRM stores. Despite this, CBC’s investigations revealed that numerous grocery store properties in the Halifax area still have property control documents attached to them.
The Competition Bureau stresses that property controls pose a significant barrier to entry and expansion for smaller competitors in the Canadian market. It underlines the importance of access to land for setting up new grocery stores and emphasizes that increased competition benefits consumers by lowering prices and encouraging innovation.
Gateway Meat Market, founded in 2007 in Dartmouth, has avoided property controls. Co-founder Tamara McKay acknowledges the challenges faced by independents in selecting suitable locations and foreseeing business growth. While she appreciates the success of their current store, she remains cautious about expanding to a second location.
James Baxter, an associate professor at Dalhousie University’s Schulich School of Law, highlights the limited availability of commercial spaces suitable for grocery stores in urban areas. He explains the impact of property controls like restrictive covenants and exclusivity clauses on site selection for grocery establishments.
The investigation by the Competition Bureau focuses on the market dominance of Sobeys and Loblaw, with court orders compelling disclosure of information related to property controls, leases, and customer behavior. Despite objections from Empire, the Federal Court and Court of Appeal dismissed their challenges. The bureau’s recommendation to provinces and territories to restrict or ban property controls in the grocery industry has only been implemented by Manitoba to date.
Efforts to address property controls are underway, with Loblaw committing to eliminating restrictive covenants on sold properties and releasing existing covenants. The bureau’s ongoing work aims to increase competition in the grocery sector, fostering value for Canadian consumers.
In a study examining former grocery store locations for property controls, some locations still retain restrictions, such as a Dartmouth Sobeys site prohibited from operating as a grocery store for the next 20 years. The persistence of property controls at such locations has drawn attention to the need for regulatory action to promote fair competition in the grocery industry.
