Did you know that the grocery stores in your neighborhood might be secretly colluding to keep prices high and competition low? It’s not just about what’s on the shelves—it’s about who gets to sell it. Canada’s biggest grocery chains, including Loblaws, Sobeys, and Metro, are using a little-known legal tactic called property controls to dominate the market, and it’s costing you more than you think. But here’s where it gets controversial: while these giants claim they’re just protecting their businesses, critics argue they’re stifling competition and exploiting consumers. Let’s dive into how this works and why it matters to your wallet.
Property controls, also known as restrictive covenants or exclusivity clauses, are agreements between landowners and retailers that limit what other businesses can operate on the property or what products competitors can sell. These deals are often buried in lease agreements or property titles, making them difficult to uncover. For instance, a Sobeys store in Winnipeg has a clause that allows it to unreasonably and arbitrarily block any food sales on adjacent land owned by the same developer. Meanwhile, a Metro in Waterloo restricts what a nearby Shoppers Drug Mart can sell and even bans restaurants with over 50 seats within 61 meters of its store. And this is the part most people miss: these restrictions can extend up to five kilometers, effectively creating no-go zones for fresh food retailers.
Economist Jim Stanford calls these arrangements a ‘mutual back-scratching’ deal that benefits corporations at the expense of consumers. ‘These are not mom-and-pop shops,’ he says. ‘They’re leveraging their power to limit competition.’ Take Teresa Petrie, a shopper in Picton, Ontario, who noticed skyrocketing grocery prices in her town. She later discovered that both her local No Frills and Foodland had property controls banning fresh food sales in their plazas. Even the dollar store nearby is barred from selling basics like meat, fruits, and dairy—a restriction that feels downright unfair.
But here’s the kicker: while grocery giants claim these controls are necessary, their profits tell a different story. During parliamentary hearings on rising grocery prices, CEOs like Michael Medline of Sobeys insisted they operate on ‘paper-thin profit margins of 2.5%.’ Yet, in the same breath, they boasted to shareholders about record earnings. Metro, for example, celebrated surpassing $1 billion in net earnings, while Loblaw reported nearly $60 billion in revenue. So, are these companies really struggling, or are they playing both sides?
The controversy doesn’t end there. Manitoba took a bold step last year by passing the Property Controls for Grocery Stores and Supermarkets Act, requiring companies to register these controls or risk having them invalidated. Premier Wab Kinew stated, ‘I don’t think one grocery store should be able to prevent another from opening.’ Yet, Empire (Sobeys) requested exemptions for 43 of its stores, while Loblaw agreed to release 150 controls—but only if competitors do the same. It’s a classic case of corporate tug-of-war, leaving consumers caught in the middle.
The Competition Bureau is now investigating, calling these practices ‘particularly egregious.’ Anthony Durocher, a senior official, warns that property controls ‘deny consumers the benefits of competition,’ including lower prices and more choices. But here’s the real question: Should essential goods like food be controlled by corporate portfolios? Teresa Petrie thinks not. ‘What we need for living shouldn’t be in people’s portfolios,’ she says. ‘There should be a law against that.’
As the federal government monitors the situation, one thing is clear: the grocery industry’s use of property controls is a hotly debated issue. Do these practices protect businesses or harm consumers? Weigh in below—is it time to level the playing field, or are these controls a necessary evil? Your voice could shape the future of how we shop.
