Rhode Island is poised to become the second state in the nation to prohibit grocery-store restrictive covenants, a real estate practice critics say can limit competition, contribute to food deserts, and keep grocery prices elevated.
The legislation, S2644/H8106, would prohibit new deed restrictions and lease provisions that prevent a property from being used as a grocery store after a retailer vacates the site. The measure passed both chambers of the General Assembly with overwhelming support and is headed to Gov. Dan McKee for consideration.
Supporters argue that so-called “scorched-earth” covenants allow large chains to block competitors from opening in former store locations, sometimes for decades. Rhode Island lawmakers pointed to communities such as Woonsocket, where officials say restrictive covenants have complicated efforts to attract new grocery investment and improve food access.
The measure was championed by Lt. Gov. Sabina Matos as part of her Fair Price Grocery Agenda. The Institute for Local Self-Reliance (ILSR), which supported the legislation, called the bill a major step toward lowering grocery costs and restoring competition in local food markets. Rhode Island would join Washington state, which enacted a similar law earlier this year.
The law would not invalidate existing restrictive covenants already on the books, but it would prevent new ones from being imposed. It also includes an exception for grocery stores relocating within a half-mile radius of a vacated site within one year.
Here’s why it matters: Grocery competition increasingly has a real-estate component. While antitrust discussions often focus on mergers and pricing practices, restrictive covenants can effectively remove viable store locations from the market for years. Rhode Island’s action reflects a growing willingness among policymakers to examine whether local grocery competition is being constrained not just by market share, but by control of commercial property itself.
