In Dartmouth, Nova Scotia, Amy Crossley, while selecting meat specials at Gateway Meat Market, expressed concern about the high cost of groceries, especially for families with young children. She noted her monthly grocery bill of $500 even though her children had moved out, emphasizing the need for more affordable family-run stores like Gateway.
An investigation by the Competition Bureau Canada has been ongoing since last year, focusing on Sobeys and Loblaw’s use of property controls known as property controls that can prevent competitors from establishing stores in specific locations. The bureau’s interest primarily lies in Halifax but extends to property control practices nationwide.
The bureau’s concern is that property controls hinder smaller competitors from entering the market, limiting consumer choice and innovation. Independent grocers have voiced support for increased competition, believing it would benefit consumers by lowering prices and fostering innovation.
Gateway Meat Market, founded in 2007, has not faced property control challenges. Co-founder Tamara McKay highlighted the difficulties faced by independents in securing suitable locations due to the need for significant property space and market foresight, emphasizing the importance of strategic planning for sustainable growth.
James Baxter, an associate professor at Dalhousie University, emphasized the scarcity of commercial spaces suitable for grocery stores in urban areas and how property controls can further limit the availability of such sites.
The investigation in HRM focuses on restrictive covenants and exclusivity clauses that restrict competition. While some industry representatives believe removing property controls may not directly impact food prices, the Competition Bureau advocates for increased competition to benefit consumers.
Despite objections from Empire, the Federal Court dismissed their challenge, affirming the bureau’s investigation. The bureau’s focus on Halifax has raised questions about the necessity of property controls and their impact on market competition.
Efforts to eliminate property controls are underway, with Loblaw committing to removing restrictive covenants and exclusivity clauses. The bureau is working towards this goal, although the timeline and extent of these changes remain uncertain.
Former grocery store locations in Dartmouth still have property controls in place, affecting community access to essential services. The Competition Bureau’s recommendation for provinces to address property controls in the grocery sector has only been implemented in Manitoba to date, highlighting the need for further regulatory action nationwide.