“Good” Arthur and the customer boycott
boydownthelane.com
2014/08/01
The attorneys general of Massachusetts and New Hampshire sent a joint letter Thursday to Market Basket co-CEOs Felicia Thornton and James Gooch, spelling out employment laws in the two states about wages owed to fired employees.
“We are keenly aware of recent reports that Market Basket has terminated a number of employees and of reports today that more workers may face termination and replacement in the coming days,” Martha Coakley, of Massachusetts, and Joseph Foster, of New Hampshire, wrote.
“Whatever decisions you make in the coming days, needless to say our offices expect and will require compliance with our respective laws,” they added.
Market Basket is advertising positions as it urges its employees to return to work by August 4. It has said it expects some employees not to heed that call as employee protests and a customer boycott to reinstall former CEO Arthur T. Demoulas continue to stall the company’s normal operations.
Thornton and Gooch responded with a statement to the press, saying:
“We have said several times that we hope sincerely that we do not discharge any employees. We want our associates back. We are focused solely on getting Market Basket stores back up and running for our customers and, importantly, for the many local vendors that rely on Market Basket to make their own businesses successful for the sake of their employees. We respect the Attorneys General position, and would of course follow all applicable laws.”
Coakley, who is running for governor of Massachusetts, is among the many politicians to have voiced support for Market Basket employees as events have unfolded across the company in the last two weeks.
A group of customers has raised more than $10,000 to publish a full-page ad in the Lowell Sun this weekend, telling the executives and the company’s board of directors they intend to continue to boycott.
A copy of that letter from the AG’s can be found here:
http://www.boston.com/business/news/2014/07/31/mass-ags-market-basket-follow-the-law-when-you-fire-people
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There are dysfunctional families, and then there are dysfunctional families. The Demoulas Clan — the founders of the Market Basket grocery chain whose explosive and public family feud over control of the company recently culminated in the ouster of the chain’s CEO, Arthur T. Demoulas — fits squarely into the latter category.
“I honestly think Shakespeare, in putting together King Lear, had nothing on the Demoulas family,” says historian Nancy Koehn of the Harvard Business School. Yet, she continues, the fierce show of loyalty from Market Basket employees protesting his departure — many risking, and in some cases, even losing their jobs in the name of putting Arthur T. back in charge of the company — suggests the mark of a CEO who was highly valued by his employees. Koehn broke down which business practices make employees loyal to a CEO.
1.Visibility. Successful CEOs frequently and regularly make themselves visible to their employees in a credible, non-gimmicky way. That means if you’re the CEO of a grocery chain, for example, your employees working the checkout line or bagging asparagus for customers should be able to pick your face out of a police lineup. Showing up once a year for the company holiday party doesn’t count.
2.Communication. Unlike children in the Victorian era, good CEOs should be both seen and heard. Communicating in a variety of forums on a regular basis is key (and that’s genuine, face-to-face communication, “not emails or mission statements in bathroom stalls,” Koehn says.) [“Good” Arthur, as he is known colloquially, must have read “In Search of Excellence”.]
3.Singling people out. A good CEO doesn’t forget that employees are individuals. When Starbucks barista Sandie Anderson donated a kidney to a regular customer, Starbucks CEO Howard Schultz made sure everyone knew it. “Do you know how much loyalty that engendered from his workforce?” Koehn asks.
4.Good wages and compensation. A no-brainer, for sure, but good wages and benefits send the message to employees that their labor is valued. [A 15%-of-wages-paid company-paid annual 401k contribution each year is unheard of in most of corporate America.]
5.Opportunities for advancement. Koehn points out that many of the people protesting Arthur T.’s ouster most vehemently had long histories of employment at Market Basket. “Don’t think that’s incidental to people’s sense of connection to Arthur T. Demoulas,” Koehn says. “You have to believe your future is tied up with a company. That is simply not true with huge numbers of public companies today.”
“These are just a short list of things you must be doing credibly and from your heart as well as your head,” Koehn concludes.
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THE LAST STAND FOR THE MIDDLE CLASS
IS TAKING PLACE IN A PARKING LOT
IN MASSACHUSETTS
One supermarket proved it can provide employees with a livable wage, annual bonuses, and a retirement plan. They can beat Walmart’s prices. They can turn a profit, too. So why was its CEO just forced out?
http://www.esquire.com/blogs/news/market-basket-fight
[text follows, and the link has 188 comments]
“… Market Basket’s formula proves that executives and managers and cashiers can all profit, together.
Employees get the benefits of a 15 percent profit sharing plan provided by Market Basket, while the groceries the store sells are less expensive, on average, than Walmart’s. As for the register: Market Basket rang in $4.6 billion in revenue last year, and is the 127th biggest privately owned company in America….
If this is, in fact, the story of the beginning of the end for the American middle class, here’s Part One….
Arthur S. has entertained a sale to the private equity behemoth Cerberus, which already owns such major grocery store chains as Shaw’s, Safeway, Star Market, Acme, Jewel-Osco, and Albertsons….
[T]he Market Basket formula does work. In a recent study of Massachusetts grocery store chains, the nonprofit Washington DC-based Center for the Study of Services found “DeMoulas Market Basket’s prices averaged about 22 percent lower than the average prices at the Shaw’s stores [they] checked and 10 to 21 percent lower than the prices at the Stop & Shop stores.” Despite paying starting full-timers $12 an hour and having many career employees on the payroll who make six figures, the survey found that Market Basket had, on average, lower prices than all of their competitors — including Walmart.
Despite such presumably tight profit margins, Market Basket pays its roughly 19,000 workers yearly bonuses that often equal up to several months worth of salary, plus invests the equivalent of 15 percent of every paycheck into a retirement plan. At the same time, the company is impressively profitable. Shareholders have pocketed in excess of $1 billion since 2000, while the business is currently the 127th biggest privately owned American company according to Forbes. In 2013, Market Basket reportedly rang in $4.6 billion in revenue.”
--MORE--" h/t
Now back the same rotten basket I usually shop in:
Demoulas is Dead
And now we know why the Globe is dying. Their coverage of this has been shallow, skewed, and superficial.
"Market Basket fight hits poorest shoppers" by Shirley Leung | Globe Staff August 08, 2014
CHELSEA — As the feuding Arthurs and other wealthy Demoulases take their sweet time deciding the fate of Market Basket, have they forgotten about Norma Morales?
She lives on a fixed income and food stamps, and the massive Market
Basket here was the place to go to save a few bucks. But empty shelves
and employee protests about the ouster of their beloved boss, Arthur T.
Demoulas, are forcing her to shop elsewhere. She’s way over her food
budget, which means other bills might not get paid this month.
“They should take care of us,” said Morales, 62, as she loaded groceries into her trunk after a trip to her local Stop and Compare market.
Offering low prices is a key part of the Market Basket chain’s recipe
for success, but so is operating in low-income communities. The
family-owned company shrewdly located stores in so-called gateway cities
— Brockton, Haverhill, Lawrence, Lowell, New Bedford — where the real estate was cheap and opportunity exponential.
So the tragedy here might not be Greek at all. It’s the fact that
customers who can least afford to put up with the turmoil are the ones
suffering the most.
“Those families are now casualties, innocent bystanders in the
war that is now taking place,” said Jay Ash, city manager of Chelsea,
where one in four live in poverty.
The Chelsea Market Basket, a gleaming food emporium like no other,
now looks like it belongs in a ghost town. Produce is scarce, bare shelves abound, employees outnumber customers. Usually, every day is like the Saturday before Christmas.
But sure enough, the few shoppers navigating the aisles Wednesday didn’t have the means to boycott Market Basket on principle. They brushed past a line of rebellious workers out front and Artie T. posters plastered on the freezer cases inside.
Andrew Marroquin of Revere didn’t care much for the demonstration, pushing a cart full of nonperishables from instant Nissin noodles to Spam. He knew all about the infighting and that many employees vowed not to return unless Market Basket reinstalled Arthur T.
Honestly, I don't think the Globe has cared for them very much either despite the coverage.
Marroquin, 24, shook his head at the absurdity of it all. When did grocery shopping become such a political statement?
“Let’s be serious,” he said. “This is food. People need to eat.”
So you employees should just accept lousy working conditions and everything else so owners can get rich.
What started out as workers battling for what they believe in has devolved into a squabble among rich owners counting their millions and Market Basket customers watching their pennies.
That's all it is, yup, a squabble amongst rich owners. No wonder the Globe has created a special section to cover it all.
“Unlike us, they have money coming in,” said Dan Sheehan, 69, a former postal worker from Charlestown. “We have to worry about our money and next meal.”
Sheehan and his wife usually spend about $50 to $75 a week on groceries, but he estimates that number has doubled since they started going to Stop & Shop. They’ve had to cut back on expensive items, like fish and meat, so they can stick to a budget.
The retiree returned to Market Basket on Wednesday for the first time since the employee unrest began three weeks ago. He did so because he felt enough was enough. His message to Arthur T.? “It’s time to tell the people to come back to work.”
To return to the helm, Arthur T. has proposed buying out his rival cousin, Arthur S. and his family, but that side has rebuffed efforts to do a deal quickly.
Instead, the 71-store chain, whose board is controlled by Arthur S., is entertaining other bids, including an offer from the owner of Hannaford supermarkets.
As negotiations drag on, Market Basket is bleeding millions of dollars, forcing management to threaten to replace the chain’s 25,000 employees unless they return to work and get back to business as usual. Hours for many part-timers have been cut to zero. If these workers lose their well-paying jobs because they took a stand on what they believe in, it will have been their choice.
And if they had not taken that stand and had those well-paying jobs taken away anyway?
Market Basket’s poorest shoppers didn’t have a choice, yet they are paying the price.
--more--"
It's a nice article and all, pitting the poor shoppers against the family. Just ignore the the rising concentration of income among the top 1 percent.
Also see: Leung's Eliti$m
She lifted me up once, but even that was out of context.
"Role of Arthur T. complicates Market Basket sale" by Casey Ross and Callum Borchers | Globe Staff August 08, 2014
Most multibillion-dollar business acquisitions revolve around questions of financing, profit, and market share.
In the case of Market Basket, the biggest issue is flesh and blood. It’s ousted president Arthur T. Demoulas.
With the parent of Hannaford Bros. Co. emerging as a serious bidder for the grocery chain, the future role of Demoulas looms large in negotiations over the sale and subsequent operation of the fractured company.
Demoulas himself is a competing bidder, and his side of the family has refused to sell its 49.5 percent ownership to anyone else. He has won the loyalty of employees who have benefited from solid wages, regular bonuses, and a generous profit-sharing plan. Many have refused to work until he is reinstated as president.
Maybe it is me, but I don't feel the Globe has emphasized that at all. Instead I've gotten mind-manipulating spin that put me on the wrong side of the issue.
“You had Santa Claus in charge,” said David Livingston, a supermarket industry analyst at DJL Research in Milwaukee. “Every day it was Christmas.”
Who wouldn't want Santa Claus as a boss? He would sure be better than the crop of assholes running most AmeriKan corporations.
But Livingston said Arthur T.’s policies might clash with those of Hannaford’s parent, Delhaize Group, a publicly traded company that also runs the massive Food Lion chain. “Hannaford wants to make some money out of this,” he said. “This is bad news for everybody, except shareholders -- bad news for customers and bad news for employees.”
A spokesman for Delhaize said on Thursday that the company would not “comment on rumors or speculation regarding plans to acquire or divest businesses.”
There is no sign that a deal is imminent. Market Basket’s board has said only that it was evaluating several offers for the company. Arthur T. has offered to buy the 50.5 percent of shares owned by his cousin Arthur S. Demoulas and other rival relatives.
People with knowledge of the negotiations said Belgium-based Delhaize would buy all or part of the company, and has not been scared off by the prospect of sharing ownership with Arthur T.
In the past, Delhaize has allowed a popular boss to keep the reins of an acquired company — for a while, at least.
Hannaford chief executive Hugh Farrington held on to his job for a year after Delhaize bought the company in 2000. Later, Farrington gave up the top job but remained with the company as a director.
Even after that acquisition, Delhaize operated Hannaford as a distinct brand. Analysts agreed the company probably would do the same thing at Market Basket, if its bid is accepted.
Combining Market Basket with Hannaford would more than double Delhaize’s market share in the Northeast, according to the Griffin Report of Food Marketing.
The combined business would become the region’s fourth-largest food retailer.
Look at where the conversation and focus has gone, huh?
Hannaford operates 180 stores, and Market Basket runs 71 supermarkets. The companies compete directly with each other in many communities across New England.
A combination of the two businesses could raise antitrust concerns, possibly requiring them to divest some stores as a condition of any agreement.
But if its bid is successful, Delhaize would benefit from Market Basket’s extremely loyal customer base, which is drawn to its stores for low prices and good service.
Yeah, and how can they do that?
“Market Basket is a great franchise — period,” said Andrew Wolf, a food industry analyst with BB&T Capital Markets in Boston. “If you can buy a great franchise and maintain what it represents, that’s what big companies are built to do.”
But Wolf said that the loyalty of customers and employees could also make it harder for Delhaize to tinker with the company.
“They have such a unique culture, and that’s on display currently,” he said, noting the massive rallies on Arthur T.’s behalf. ‘That culture is a wonderful thing, unless a new owner messes with it too much.”
Though the names might stay separate, Hannaford and Market Basket would be likely to merge operations, for the sake of efficiency — and that could spark a clash of cultures, said Edward McLaughlin, director of the food industry management program at Cornell University.
I'm sorry, folks, but I have lost my taste for the endless war terminology and other $elf-internali$ed values of the people who write and edit this agenda-pushing slop for the elite of Bo$ton and beyond.
Hannaford sells mostly conventional, name-brand products, but Market Basket is known for a selection of ethnic — even exotic — foods.
Niche offerings can inspire customer loyalty, but they make it harder for a grocery business to streamline its supply chain, McLaughlin noted. It would not be surprising, he suggested, to see a Delhaize-owned Market Basket go mainstream.
“They would lose some customers, no doubt,” McLaughlin said. “But one of the first questions they would ask is, ‘Will we gain enough new customers by changing to offset the ones we lose?’ ”
The pressure to drop novelty items with lower profit margins has increased in recent years, as Walmart became a bigger player on the grocery scene, said Jack Plunkett, chief executive of the Houston-based retail tracker Plunkett Research.
“The supermarket business has become extremely competitive, and it’s hard to make a dollar now,” Plunkett said. “Margins have been falling for 15 years.”
--more--"
I see from the map why the Globe has taken such interest. That and the destruction of the middle class would definitely be something that concerns their elite readership.
Related: Part-time hours eliminated at some Market Basket stores
I have had to cut back, too.
UPDATE: Patrick offers to help end Market Basket feud
