Market Basket’s Strange Summer

By Brittany Peats

After a long, public dispute involving a family feud between two cousins with the same name, 25,000 employees, and the governors of Massachusetts and New Hampshire, the family-owned Market Basket grocery chain appears to be recovering from a summer of protests and empty shelves.

Things are looking up for students in the Boston area who want to save on groceries – Market Basket should be fully functioning again soon. A family spat resulted in a summer of protests by workers, boycotts by consumers, and empty grocery shelves. Market Basket, which has 71 stores in the Northeast, is known for its low prices, multicultural offerings, and long lines. The board of the supermarket has finally reached a resolution between two warring cousins, Arthur T. Demoulas and Arthur S. Demoulas.

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Market Basket was started by a Greek couple in Lowell, MA in 1917 who later sold the company to two of their sons. When George Demoulas died in 1971, his brother, Telemachus, took over. In 1990, Arthur S., a son of George, filed a case against Telemachus, claiming that George’s descendants were cheated out of their share of the company. As a result, George’s heirs, including Arthur S., received compensation and 50.5% of the company’s shares. The heirs of Telemachus, including Arthur T., had 49.5% of the shares.

Arthur T. was made president of the company in 2008. But when one board member changed alliances in 2013, Arthur S. received command of the board. On June 23, 2014, Arthur S. and the board fired Arthur T. and other top executives. He was replaced by co-CEOs Felicia Thornton and James Gooch.

Workers protested, and executives resigned out of loyalty to Arthur T. and a belief that the new CEOs were brought in to raise shareholder profits, perhaps by reducing worker compensation, including profit sharing, or by dismantling the company. Several workers were fired for participating in protests. Many delivery and grocery store workers stopped stocking shelves, leaving the fruit and vegetable shelves empty.

Somerville Market Basket’s empty produce shelves on August 20, 2014

Somerville Market Basket’s empty produce shelves on August 20, 2014

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A sign supporting Arthur T. Demoulas in the Somerville Market Basket on August 20, 2014.

Few customers shopped at the stores, and part-time workers saw their hours cut. Vendors stopped working with the supermarket chain. Throughout the summer, workers continued to demand that Arthur T. be reinstated as CEO.

On August 17, the governors of Massachusetts and New Hampshire met with the board to help resolve the dispute. On August 22, Arthur T. offered [again] to buy the company from Arthur S. and other shareholders. This final offer, which is reportedly around $1.5 billion, has been accepted.

It remains unclear whether these protests and their outcome will help or hurt the regional grocery chain in the months and years to come. Though for now, if you’re shopping on a budget, you can be optimistic that you’ll soon be back to getting “more for your dollar” at Market Basket.

 

Brittany Peats is a second-year FPAN student who loves pie and weekend trips to Maine and Vermont.

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