family feud . . .
If you live in Massachusetts, New Hampshire or Maine, you have probably seen news reports about the groundswell protest of workers and managers employed by the Market Basket grocery store chain (71 stores!) that erupted this week. It pits two cousins in a long-standing feud: Arthur T. Demoulas (the fired CEO) and Arthur S. Demoulas (the non-business cousin) who managed to shuffle the Board of Directors so that his arch-nemesis, the very popular CEO (George T.) was fired by the new board a month ago.
Lest you think this is a folk tale (Robin Hood?) where the working level employees support a fired CEO, personal loyalties to him are stronger than worrying about being fired themselves. One article said that the reason Arthur T. was so popular is that he made personal connections with workers in all the stores, visiting them regularly, providing good benefits and profit sharing through the years. The company, whose revenue was $4.6 BILLION last year, “had no debt (!); low prices and treated its employees like family.” How’s that for an uncommon formula for success?
But what is the fight actually about? You guessed it: money. The cousin, Arthur S. Demoulas, wants $300M. to be paid out from the company’s coffers to a few “shareholders” (8-9 people in the FAMILY, guess which side?) Arthur T. Demoulas (the fired guy) says taking that money out will decrease benefits and payouts for the working people at Market Basket.
The cousin who wants the payout is purportedly one of the 8 richest people in Boston whose personal wealth is estimated to be around $1.6 B. I guess that’s not enough for him if he still wants a share of the $300M payout. What, I wonder, do you do with all that money or what does money buy you when you have that much? What about those family members waiting for their cut of $300M–that’s about $30M apiece if it’s divided evenly. This is crazy, don’t you think?
The thing is, there doesn’t seem to be a win-win resolution to this uprising. The new Board can’t really do anything without losing face. George S. holds 51% and the folk-hero George T. holds 49%. Doesn’t sound too promising for Robin Hood, does it?
The two new Co-CEO’s are supposed to figure something out but their public letter a couple of days ago to employees hasn’t cut any mustard as far as the demonstrations each day show. Firing top managers with decades of experiences hasn’t softened the rebellious workers at all, just the opposite. Besides, one of them was the CEO of Radio Shack, a business that is on its last legs. . . why would they hire HIM to run an already super successful business when the one he’s leaving is going down the tubes? Does this sound Shakespearan to you yet?
Oh, and guess who the judge was who awarded the cousin’s family the big payout in the 1990’s? Judge Maria Lopez–you know the one, who was shown on TV yelling and pointing her finger at a criminal, lambasting him for something and then leaving the bench?
The one factor that nobody’s talked about much is, (drumroll) the customer. They show the empty stores and the picketing employees but we, the customers, are not on the scene except for a few who are trying to shop. Many of us are watching this unfold on the news. I shop at the Market Basket in Gloucester and occasionally at the one in Oxford. The customer loyalty for MB is unbelievable. When I lived in Rockport in a winter rental, you could hear the locals buzz about a new MB that was being built on the hill on the way into town TWO YEARS before it actually arrived.
Every time I go there, there are at least 22 cashier aisles with their stations lit, checking groceries full time. Go into the Stop and Shop or Shaw’s in the same town and there might be two or three cashiers because there are no customers buying stuff! If you lifted a map like a scrabble board and tilted it, most of the customers would slide into the Market Basket location. Do you know why? Because I can buy two bushy bunches of thin, fresh wonderful scallions, two bunches for a dollar at MB. At Shaw’s here in town, your only choice is a cellophane wrapped single bunch of scallions for $1.79 and they’re also not fresh. THAT’s the difference!
Demoulas vs. Demoulas has been going on for twenty years. It’s an inter-familia feud. Jarndyce vs. Jarndyce was an infamous case in the book, “Bleak House” that Charles Dickens described in depressing detail, playing itself out in the 19th century and resulting in no gain to anyone in the end except for the lawyers.
So, who knows how this will play out. Something way bigger, it seems to me, might save the day: like a white knight with enough money to buy everybody out and start anew by restoring the model that worked before: no debt, low prices and treating the workers like family. Who does that in this day and age?
The real outcome will be whether the customers who have a long history and deep loyalty to Market Basket will come back to its stores once the dust settles, and whether it will matter who is in charge.
Thank you for your thoughtful analysis of this unfortunate situation. Inspired by your reflections, I dropped off some water and lemonade for the workers at the Burlington MB. I hope that things work out for the best for the workers and customers of MB; they are the ones who make the business so successful. Solidarity!
WOW!taking water and lemonade to striking MB employees is a lot more than writing about it– and they’re not even unionized! (a truly extraordinary labor/management situation!)Thanks for the support and encouragement! Heard today on the news that Arthur T. has made an offer to buy the company (back) and that the Board of Directors is considering it. Either he has to buy it back or someone has to help him buy it back. Fingers crossed!