DeMoulas Market Basket

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DeMoulas Supermarkets, Inc
Type Privately held company
Industry Grocery
Founded Lowell, Massachusetts, United States (1917 (1917))
Founder(s)
  • Athanasios Demoulas
  • Efrosini Demoulas
Headquarters Tewksbury, Massachusetts, United States
Number of locations 71[1]
Area served New Hampshire, Massachusetts, Maine
Key people
  • Arthur T. Demoulas
Products Bakery (not available at all stores), Dairy, Deli, Frozen Foods, Grocery, Meat, Health & Beauty Aids, Produce, Seafood, Snacks, Beer & Wine (NH and Maine stores only), Food service (not available at all stores)
Revenue US$4 Billion (2012)
Owner(s) DeMoulas Family
Employees 25,000 (2014)[1]
Parent DeMoulas Supermarkets, Inc.

DeMoulas Super Markets, Inc, under the trade name Market Basket, is a chain of 71 supermarkets in New Hampshire, Massachusetts and Maine in the United States.[1] Its footprint spans from southern Maine, central New Hampshire to southeastern Massachusetts with headquarters in Tewksbury, Massachusetts. Market Basket's most recent expansion brought it to Maine in 2013.

As of August 2014 the company is the center of a controversy over ownership and leadership, which has culminated in protests receiving international media attention.

History[edit]

In 1916, Greek immigrants Athanasios ("Arthur") and Efrosini Demoulas opened a grocery store in Lowell, Massachusetts, specializing in fresh lamb. In 1954, they sold their store to two of their six children, the brothers Telemachus ("Mike") and George Demoulas. Within 15 years, the two brothers had transformed their parents' "mom and pop"-style store into a more modern supermarket chain consisting of 15 stores.

The last use of the name DeMoulas on a facade was on this former store in Salem, New Hampshire.

George Demoulas died of a heart attack in 1971 while vacationing in Greece, making Mike the sole head of the Demoulas supermarket chain. Although each brother had promised to provide for the other's family in the event of his death, a lawsuit filed in 1990 by the heirs of George Demoulas claimed that Mike had defrauded them out of all but 8% of company stock by moving assets into shell companies, such as 'Market Basket Inc.' and 'Seabrook Sales Inc.' and claiming that these were separate companies from DeMoulas itself. The ensuing legal cases threatened to require the sale of the chain, most likely to Royal Ahold's Stop & Shop. In 1994, Judge Maria Lopez ruled that Mike Demoulas had defrauded George's family out of nearly $500 million, transferring 51% of Demoulas' stock to George's family.[2] Mike Demoulas died in 2003.

In March 2006, Boston magazine rated George's son, Arthur S. Demoulas, as Boston's eighth wealthiest person, with assets of $1.6 billion.[3] In early 2008, the board of directors elected Mike's son Arthur T. Demoulas president of the corporation.

A separate company controlled by the Mike Demoulas side of the family operated the Lee Drug chain from 1983 until it was sold to Walgreens in 1990; these stores were usually located in the same shopping center as a DeMoulas Market Basket. The chain's corporate relationship to Mike Demoulas' family interest in DeMoulas Market Basket was cited in the 1990s litigation.

2013 feud and 2014 protests[edit]

Decades of resentment and legal spats between cousins Arthur S. and Arthur T. Demoulas came to a head in mid-2013, when a shareholder switched loyalties, tipping the majority vote from Arthur T. to Arthur S.[4] On July 18, 2013, the board did not take up a motion to remove Arthur T. as CEO after protesters gathered outside the meeting.[5][6] Five days later, the board voted to distribute $250 million to family shareholders, an action opposed by Arthur T.[7] The ongoing feud has slowed construction of new stores in Waltham, Massachusetts and South Attleboro, Massachusetts; the opening of the completed store in Revere, Massachusetts, originally scheduled for September 2013, has been indefinitely delayed.[8]

On June 23, 2014, three top-level executives - CEO Arthur T. Demoulas, Vice President Joseph Rockwell, and Director of Operations William Marsden - were fired by the board.[9] The Chief Executive position was filled by James Gooch, a former Radio Shack executive, and Felicia Thornton, formerly of supermarket company Albertsons, sharing the position.[10] In response, six high-level managers resigned, and 300 employees held a rally outside Market Basket's Chelsea, Massachusetts flagship store on June 24.[10] The protesters characterized the business practices brought by these new executives as having "an evident goal of strip mining the wealth from the company" by cutting wages, taking on debt, and raising prices in order to increase profits to shareholders in the Demoulas family.[11]

Beginning on July 18, 2014, additional protests with as many as 5000 employees and customers were held at the company's Tewksbury headquarters and other locations demanding the reinstatement of Arthur T.[12][13] Many warehouse and corporate office workers including delivery truck drivers went on strike, leaving some shelves bare at many Market Basket locations.[14][15] On July 20, seven employees were fired for their roles in organizing the protests.[16] In the midst of the protests, Arthur T. offered to buy the entire company from his cousins, an offer that the board (controlled by Arthur S.'s family) said it would consider. The board was reportedly also reviewing additional offers.[13]

On July 28, 2014, the Boston Globe reported that Arthur T. Demoulas was the only remaining bidder for the 50.5% stake of the company held by the family of Arthur S. Demoulas. All previous offers by outside parties to buy the company had been withdrawn and the board was reportedly "furiously negotiating" with Arthur T. to resolve the situation. The board denied this report, claiming that several offers were still being considered.[17]

On August 7, 2014, Market Basket stopped scheduling future hours for part-time employees.[18] However, beginning August 23, some part time workers were called back to begin working again if available.[19]

On August 17, 2014, Massachusetts governor Deval Patrick New Hampshire governor Maggie Hassan met with both sides of the feud in an attempt to broker a deal.[4] On August 22, Arthur T. made a $1.5 billion offer for the 50.5% of shares owned by the opposing side of the family; several subsequent days of negotiations have failed to reach an accord.[20] The company is estimated to be in "dire" financial straits due to the months of protests.[4]

Market Basket today[edit]

A typical Market Basket store in Portsmouth, New Hampshire
The interior of the largest Market Basket, the flagship store in Chelsea, Massachusetts

Market Basket's main competitors include Hannaford, Shaw's, Stop & Shop, Trader Joe's, Walmart, Whole Foods Market, and smaller, local markets, such as Butcher Boy and McKinnon's Market. Though the chain is often referred to as DeMoulas, all of its stores now operate under the Market Basket name (the last of which, No. 6 in Salem, New Hampshire, changed in spring 2010). Market Basket supermarkets are usually in shopping centers with other stores, often properties owned by the company through its real-estate arm, Retail Management and Development, Inc. Only three stores in the chain's history have ever closed: Store 38 in Plaistow, New Hampshire, Store 11 in Andover, Massachusetts, and Store 29 in Nashua, New Hampshire. At the time of Store 38's closing, there were larger Market Baskets located 1.4 miles (2.3 km) away in Plaistow and three others in Haverhill, Massachusetts, within 6 miles (10 km) of the closed store's location. A number of stores have moved out of existing locations in order to relocate to larger buildings.

The chain's footprint has expanded greatly in the past decade, and now encompasses an area stretching from Cape Cod to southern Maine, just shy of the Vermont and Rhode Island state lines. The first Maine location opened in Biddeford in August 2013.[21]

Unlike most low price grocers, Market Basket does not use supermarket loyalty cards.[22]

Modern improvements[edit]

Market Basket has started adding Market's Kitchen to some of its existing stores and most of its new stores. Market's Kitchen offers submarine sandwiches, panini, rotisserie chickens, salads, and fried foods, as well as pre-made family-style meals. Many new stores also feature a dedicated seafood department that makes fresh sushi daily. Self checkout lanes are not used; Arthur T. stated that he wanted "a human being waiting on a human being."[23]

Unlike other grocery store chains in New England, Market Basket typically does not feature pharmacies within its stores, although in many cases, pharmacy chains are located in shopping plazas adjoining Market Basket stores, or in some other cases fairly close to the store.[24]

From 2009 to 2013, Market Basket opened about four or five new stores annually, while relocating some stores to newly constructed or renovated buildings. Market Basket has invested in building new stores to replace smaller, older, and outdated stores. It has also renovated and updated equipment in stores that were built within the last 15 years.

A June 2014 report on WBUR-FM pointed out that the store has no official web site. An enthusiastic customer scans circulars and posts them on the unofficial web site at mydemoulas.net, which is supported by advertising. An official website (which copied the scanned circulars from mydemoulas.net) appeared briefly after the story, at demoulasmarketbasket.com,but was offline by August.[25][26]

Recognition[edit]

  • Consumer Reports ranked Market Basket at #6 among national supermarkets in their 2014 ratings.[27]

References[edit]

  1. ^ a b c Ross, Casey (10 August 2014). "‘Onerous’ terms prolong standoff, Arthur T. say". Boston Globe. Retrieved 12 August 2014. 
  2. ^ "DeMoulas / Market Basket Inc. History". Funding History. Retrieved 25 August 2014. 
  3. ^ Storrs, Francis (March 2006). "The 50 Wealthiest Bostonians". Boston. Retrieved 25 August 2014. 
  4. ^ a b c Vaccaro, Adam (25 August 2014). "Updated: What the Heck Is Happening at Market Basket?". Boston Globe. Archived from the original on 26 August 2014. 
  5. ^ Springer, Jon (12 July 2013). "Demoulas CEO Facing Board Challenge". Supermarket News. Archived from the original on 28 July 2014. 
  6. ^ Ross, Casey (18 July 2014). "Market Basket CEO gets reprieve". Boston Globe. Retrieved 25 August 2014. 
  7. ^ Ross, Casey (23 July 2014). "Market Basket board votes to distribute $250 million to owners". Boston Globe. Retrieved 25 August 2014. 
  8. ^ Daniel, Seth (11 September 2013). "Family Fued Delays Opening of Revere Market Basket Store". Revere Journal. Retrieved 12 August 2014. 
  9. ^ Scott, Christopher. "Market Basket CEO canned". Lowell Sun. Retrieved 24 June 2014. 
  10. ^ a b Vaccaro, Adam (24 June 2014). "Leaders Resign While Hundreds of Market Basket Employees Rally in Support of Fired CEO". Boston Globe. Retrieved 25 June 2014. 
  11. ^ Jardin, Xeni (30 July 2014). "Class War in Progress: The Market Basket family feud and related worker revolt". Boing Boing. Retrieved 30 July 2014. 
  12. ^ Tuttle, Brad (23 July 2014). "Meet America’s Most Beloved CEO—Too Bad He Just Got Fired". TIME. Retrieved 25 August 2014. 
  13. ^ a b Unknown, Unknown (July 21, 2014). "Thousands Rally Outside Tewksbury Market Basket". Boston Globe. Retrieved 28 July 2014. 
  14. ^ "Market Basket shelves look bare during corporate strike". WMUR. 19 July 2014. Retrieved 27 July 2014. 
  15. ^ Associated Press (25 July 2014). "A tale of two Arthurs: Market Basket family feud sparks workers' revolt". The Guardian (West Bridgewater, Massachusetts). 
  16. ^ Ailworth, Erin; Adams, Dan (20 July 2014). "At least 7 Market Basket employees fired, protesters say". Boston Globe. Retrieved 25 August 2014. 
  17. ^ Schreiber, Jason (29 July 2014). "Market Basket board insists it is weighing several potential buyers". Seacoast Daily. Retrieved 25 August 2014. 
  18. ^ "Market Basket slashes part-timers' hours as protests continue". WCVB. 7 August 2014. Retrieved 25 August 2014. 
  19. ^ Saffir, Doug (25 August 2014). "Market Basket Managers Inquiring About Part-Timers’ Availability to Work". Boston Globe. Retrieved 25 August 2014. 
  20. ^ Ross, Casey; Newsham, Jack (24 August 2014). "No accord in Market Basket discussions: Sides at odds over terms of sale". Boston Globe. Retrieved 25 August 2014. 
  21. ^ Anderson, J. Craig (22 July 2014). "Feud at Market Basket stalls growth plans in Maine". Portland Press Herald. Retrieved 25 August 2014. 
  22. ^ Waterhouse, Gail (28 June 2013). "Shaw’s drops its loyalty card program". Boston Globe. Retrieved 12 August 2014. "The move comes as Shaw’s prices increased compared to the competition, including chains such as Market Basket, which has no rewards card but is known for its low prices." 
  23. ^ Welker, Grant (27 July 2014). "How one woman set off the latest chapter in the Market Basket tale". Sentinel Enterprise. Retrieved 25 August 2014. 
  24. ^ Welker, Grant (3 September 2013). "Shopping cart full of changes looming for Market Basket". Lowell Sun. Retrieved 25 August 2014. 
  25. ^ Nickisch, Curt (23 July 2014). "The Mystery Of Market Basket’s Missing Website, And The Lone Shopper Who Filled The Void". WBUR-FM. Retrieved 25 August 2014. 
  26. ^ Caesar, Chris (23 July 2014). "Market Basket Launches its First Official Website, in 2014". Boston Globe. Retrieved 25 August 2014. 
  27. ^ Welker, Grant (5 April 2014). "Market Basket scores high in Consumer Reports ratings". Lowell Sun. Retrieved 12 August 2014. 

External links[edit]