Sobeys parent company Empire to stop using, enforcing some property control measures

A west-end Toronto Sobeys grocery store, is shown in this Sunday, June 26, 2023 file photo. THE CANADIAN PRESS/Graeme Roy

Sobeys’ parent company said it will stop using a measure that can limit competing businesses from operating at specific locations.

Empire Co. outlined its approach in a new policy document released on Tuesday, nearly a month after the Competition Bureau broadened its investigation into the grocer’s use of property controls.

Empire says it will no longer use or enforce so-called restrictive covenants, which grocers and other retailers have used to prevent rivals from opening a store on their former site after moving away.

These and other property controls such as exclusivity clauses have drawn attention from regulators, politicians and the general public in recent years as high food prices increased scrutiny of competition in the grocery industry.

Empire’s policy shift comes as the Competition Bureau last month broadened its probe into Empire for its use of property controls countrywide through a Federal Court order in June.

The court order granted the bureau access to additional information at a national level, such as how the grocer negotiates property controls and their effects on competition. The bureau said the investigation is ongoing and there is no conclusion of wrongdoing.

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Keldon Bester, executive director of the think tank Canadian Anti-Monopoly Project, said Empire saw the writing on the wall and “took this as an opportunity to try to get ahead of what would have been a lengthy and ultimately embarrassing investigation.”

But as Empire turns a new leaf on its property control policies, Bester said the approach should be “trust, but verify” and not to take a company at its face value.

He said the Competition Bureau shouldn’t stop its independent investigation until there is a binding commitment.

“We really need to be pushing for clarity on what these commitments actually mean,” Bester said.

He said the Competition Bureau should continue to monitor Empire’s commitments independently and make sure the company delivers, and that those dealing with Empire are aware that the grocer’s property control policies are no longer binding.

Empire said it will stop enforcing or entering into exclusivity clauses on properties identified in the Competition Bureau’s June court order and in Manitoba, where there is a law governing restrictions in the grocery sector.

Exclusivity clauses, also a type of property control, restrict landlords from leasing property to specific food retailers or limit what another food retailer can sell within the area.

In April, the Manitoba government challenged four property contracts held by Sobeys, claiming that the grocer was making it more difficult for competitors to enter the market.

Empire said it will also stop enforcing its exclusivity clauses on specialty food stores, such as bakeries and butchers, and will allow other retailers to set up shop around its existing grocery stores.

It will also limit the size, product scope and time frame of exclusivity provisions in future grocery store leases.

Bester said the carve-out on butchers and bakeries shows that the exclusivity clause affects more than just other grocers but also bars businesses such as pharmacies and optometrists from setting up shop in the area.

“This problem is much bigger than Empire and it’s much bigger than grocery,” he said.

The Competition Bureau began investigating various grocers for their use of property controls in 2024, after its earlier report on the sector described property controls as a tool that retailers may be using to curb competition.

Some major grocers, including Walmart Canada and Loblaw Cos. Ltd., have already pledged to axe property controls relating to retail competition.

Bester said Empire took the boldest step forward among all the retailers — even as some remain on the sidelines — but there’s room to do more.

“We need to think about this broader question of what kind of control do we allow companies to have over the competitors?” he said. “Our position is that markets work best when that (control) is as little as possible.”

This report by The Canadian Press was first published July 21, 2026.