As the Independent has reported, Stop & Shop purchased the former T-Time driving range property on Route 6 in Eastham in 2013 for $1.3 million, not because the chain wanted to build a supermarket there, but because they wanted to make sure nobody else would. The company put the property back on the market, adding the following restrictive covenant to the deed:
“No portion of or premises on the Property shall be used, leased, occupied, or licensed for a food supermarket, a food superstore, a food warehouse store, a specialty food store (e.g., a butcher shop, fish market, fruit and/or vegetable market or stand), a wholesale club store operation or a convenience store, or for the sale of food or food products for off-premises consumption (whether by humans or animals).”
As it happens, the parcel was purchased by the town of Eastham for mixed-use redevelopment that normally might have included food shops. According to antitrust experts, clauses like this deliberately violate the spirit and letter of antitrust laws. But at a time when antitrust enforcers are looking at high-tech behemoths like Google, the T-Time case is too small-fry for either the Federal Trade Commission or the Mass. attorney general’s office to get involved with.
While Eastham could sue Stop and Shop, town officials seem to have no stomach for it. Economic Development Planner Lauren Barker laughed when she was asked if the town had considered filing suit. She said the town could ask Stop & Shop to remove the deed restriction, “but at this point there’s no discussion about that. We’re still in phase one and trying to identify possible uses for the site. We’ve had a lot of community outreach.”
That outreach developed recommendations brought to the select board in November. Possible plans include “buildings, outdoor recreation space, and pop-up business/temporary artist space” as well as food for onsite consumption, which is not prohibited by the deed restriction.
According to T-Time development committee chair Karen Strauss, “We are finalizing a contract with the master planning firm, and that will be announced fairly soon.”
Might they consider suing Stop & Shop? “That’s above my pay grade,” said Strauss.
Stop & Shop has used this tactic to discourage competition before. The Boston Globe ran a story in 2009 by Christine Legere about a similar deed restriction in the town of Halifax, where Stop & Shop was trying to block Walmart from opening a “supercenter.” According to the Globe, the parcel was bought and sold through a straw entity, Halifax Farms Realty LLC, but the language of the restriction barring a supercenter for 30 years states that it “was put in place to benefit Stop & Shop.”
In 1999, one of Stop & Shop’s shell companies sold a property in Quincy with deed restrictions explicitly naming Stop & Shop as the beneficiary. The restrictions state that the property cannot be used to sell fresh fruits and vegetables, baked goods, dairy products, frozen foods, fish, poultry, and meat for 99 years. Another shell company with ties to Stop & Shop placed similar deed restrictions on a property in Harwich.
In 2003, Connecticut Attorney General Richard Blumenthal (now a U.S. senator) opened a state investigation into Stop & Shop’s land-acquisition practices. But the company was able to fend off further action.
Stop & Shop Media Relations Director Jennifer Brogan responded to a request from the Independent with an email saying, “Stop & Shop will decline to provide comment here.”
Stop & Shop was bought by the Dutch conglomerate Ahold in 1995. Ahold, in turn, merged with the Belgium-based food company Delhaize in 2015, creating Ahold Delhaize, which also owns other large, nominally separate chains including Giant, Hannaford, and Food Lion, as well as FreshDirect and Peapod.
The other major New England chain, Star Market, was independently owned by the Mugar family. It was sold and merged with another prominent chain, Shaws. Both familiar names were maintained, though the two effectively became one company. Both were then sold to a private equity company, Cerberus Capital Management.
Compared to other industries, supermarkets do not seem super-concentrated because more than a dozen large chains operate regionally and nationally. Nationally, Ahold Delhaize ranks fifth.
Antitrust authorities have been indulgent of supermarket mergers because the industry appears to be competitive, but at the local level that’s often not the case.
How far does a consumer have to travel to find a competing supermarket? If you live in Provincetown, about 30 miles.
Thomas Lyons contributed reporting for this article, a version of which first appeared in the American Prospect.