http://upriser.com/posts/justice-served-watch-what-happens-when-greedy-board-members-try-to-mess-with-a-truly-honorable-ceo""Market Basket is a family-owned supermarket chain headquartered in Tewksbury, Massachusetts with 71 stores in MA, NH and ME. It's an old-fashioned kind of place where employees still call managers Mr. So-and-So and customers sir and ma'am. The stores, both old and new, are designed to look like something out of the early-1970s with white and orange checkerboard floors. The store managers all have heavy Bostonian accents regardless of the location and are frequently showcased on the loudspeaker announcing specials. The company doesn't even have a website! Market Basket built its local empire on one simple thing: Low prices. Studies have shown that Market Basket out-prices other supermarkets in our area, including WalMart, by as much as 22 percent. Rival supermarket chains have even attended town planning board meetings trying to stop or slow down progress on new Market Basket stores, because they annihilate the competition. Within a year of 3 Market Baskets opening in my locality, 6 corporate-owned supermarkets went out of business.
And here's how they're able to do it and still make a killer profit: They treat employees so well that they many never leave. Literally. They become decades-long or even lifelong employees, starting as baggers in their teens, and know their jobs so well and make the company run so efficiently that those savings get passed on to the consumer. Not only that, but they are well-compensated for their dedication with above-average pay and top-notch benefits. When the economy tanked 5 years ago, CEO Arthur T. DeMoulas (or Artie T. as he is known locally) pumped $40 million of what would have otherwise gone into shareholders' pockets (including his own) back into the employee bonus program.
And that's why, when one of the DeMoulas family members on the Board of Directors switched their allegiance to the rival side of the family (led by Artie T's cousin, Arthur S), giving them a controlling vote, and they fired Artie T and brought on the former CEOs of Radio Shack and Albertson's to run the company earlier this summer, the 25,000 NON-UNIONIZED employees and 2,000,000 customers of Market Basket stuck their necks out and revolted in a BIG way.
It began with several hundred employees in the distribution center walking off the job and demonstrations in front of headquarters and all 71 stores, calling for a customer boycott. Customers (most of whom know or have known someone who worked for Market Basket) heeded the call. The new CEOs fired a handful of upper-management employees and began issuing threats to all other employees. In response, customers raised funds on GoFundMe.com to place full-page ads in local newspapers telling the CEOs that "Customers can't be fired - we quit!" These combined efforts resulted in a 95 (yes 95) percent drop in revenues, costing the company some $80 million per week.
About a week later, Artie T. made an offer to buy out the rival side of the family, but they didn't bite and began entertaining offers from competitors. Employees and customers alike kept the pressure on for 6 weeks, going on social media and threatening to boycott the potential buyers as well. All part-time employees were effectively laid off (given no hours) as the stores were virtually empty and vendors began severing their business relationships with Market Basket.
Finally, at 10pm on August 27, the controlling side of the family agreed to sell their shares to Artie T.
By midnight, employees (including the previously fired ones) were back at work and restocking stores, and customers began pouring in the next morning. I visited a store near my office at 9am (less than 12 hours after the sale was announced) to find the deli restocked, fresh meat pouring into the coolers and fresh-baked goods hitting the shelves. Customers were shaking hands with managers and hugging employees. It was truly a magical thing to see.
Despite having just bought out the company for $1.5 billion, much of which came from a new mortgage on company-owned buildings and a $550 million contribution from an investor, Artie T has vowed to keep prices low and new stores opening.
CEOs of America, let's this be your cautionary tale. Understand who keeps your company running (the employees) and where the dividends come from (the customers). You can treat people with respect while still making yourself and the shareholders filthy rich, or you can get just a little too greedy, push people over the edge and risk being the next Market Basket."
