What’s Lost in the Market Basket Stories

The saga that has unfolded at the New England grocery store Market Basket over the past few weeks has struck a nerve, and rightly so. As many others have pointed out, the story of a corporate board taking steps to squeeze customers and employees in order to generate ever-higher profits feels far too representative of the way most businesses operate today. What fewer have come out and said: it doesn’t have to be this way.

For the uninitiated in this story, Market Basket is a supermarket chain with 71 stores in Massachusetts, Maine, and New Hampshire. The company employs about 25,000 people throughout the region and had $4.6 billion in revenue in 2013. The chain is an unabashed success, having grown from a small family store to a regional powerhouse. And they have succeeded by taking a distinctly high-road approach: the company takes care of its workers, paying decent wages, offering benefits to full- and part-time staff, and providing employees with a profit-sharing plan. At the same time, Market Basket still offers prices lower than its competitors, Walmart included.

This take-care-of-your-customers and value-your-workers philosophy has given Market Basket an intensely dedicated following, both from employees and regular shoppers. Thus, it should not be surprising that when the controlling members of the chain’s board fired the company’s beloved CEO, allegedly so that they could cut back on compensation, maximize payouts to shareholders, and potentially liquidate the company, the Market Basket faithful revolted, with workers walking off the job and customers boycotting.

Full disclosure, I am a Market Basket acolyte. My family shopped at Market Basket for years when I was growing up in New Hampshire. I remember weekly trips in which the assistant store manager would step onto the cashier line to bag our groceries while chatting with my mother, seemingly just because he enjoyed interacting with customers. He genuinely seemed to love his job.

Indeed, the fact that so many Market Basket employees would risk their livelihood in defense of their former CEO says a lot about the company culture he created. Regardless of how one views his role in the family feud that precipitated the current chaos, we can still acknowledge that Arthur T. Demoulas was certainly well-liked and, at least in part, a shrewd businessman. Part of what has made Market Basket successful is its compensation practices and strong commitment to promoting from within—giving the company low turnover rates and a deep institutional memory that has helped them turn higher profits than their competitors despite offering lower prices.

And while we can celebrate a company that has utilized smart labor practices to achieve success, there are elements of the Market Basket work environment that need not be exceptional. We should not have to rely on a CEO’s benevolence to ensure that anyone’s job is a “good job.” Yes, there will always be some jobs that are better than others, but we can set labor standards that improve the quality of all jobs, and enact policies that put workers in a better position to negotiate improvements in their individual job.

What might this entail? For starters, we could guarantee workers commonsense benefits like paid vacation and family leave. We could update overtime rules to ensure that ordinary workers get overtime when they work more than 40 hours per week. We could build public retirement programs accessible to anyone not offered a retirement plan through their job. We could raise the minimum wage back up to where it provides at least enough for someone to survive without relying on public assistance. We could strengthen labor laws so workers have the ability to organize and bargain collectively for better pay, benefits, and working conditions without fear of being fired. This last suggestion is particularly relevant, because it has been through collective action that the workers at Market Basket have been able to make their voices heard. If Arthur T. is reinstated as CEO, it will be because of collective action. How many jobs at other companies could have the same benefits available at Market Basket if workers had greater ease of organizing, and protection when doing so?

Even if the ousted Arthur T. is reinstalled as Market Basket CEO, a day will come when someone else is running the company. On that day, we can hope that the new leadership shares Arthur T.’s vision, but we’d be better off building economic structures and labor standards so that workers in any company, under any CEO, can still have a decent quality job.

  • careson

    Thank you for truly getting it. I am a customer 25 years, we have always shopped at Market Basket and I to come from NH. My daughter will be in college in 2 years and she was given her walking papers last week. She worked every scheduled shift. When the public was being told workers were not working, this was not true of the majority that got laid off. So many threats by this Board and it’s Ceo’s, it’s almost criminal. I read a statement yesterday from BOD telling the workers and customers also to get back in the stores. Their arrogance is lead by their Chief, Arthur S. who would just assume run the MB brand in the ground, sell at top dollar, rip his claws into everything the stakeholders value. This all in a venomous attack at our beloved CEO Arthur T. The world is watching them and it is insulting when they tell the press YOU CAN ALL RETURN, But when the warehouse workers tried to go back, they were kicked off the premises. It’s all propaganda and smoke screens. We feel to be an assault of our intelligence. Let me ask you this, if you knew that the conditions of a sale could only be financed by someone who has had it out for you for years. Would you make a deal with the devil. We know this is not gonna be resolved over night, but the customers will not be back until he is back where he belongs, in the position of ownership. This BOD & CEO’s fail to recognize that their very public is educated enough to know they have set unreasonable conditions upon Arthur T. Question how much confidence and stock should we put in their financial advisers (the same company U.S. tax payers gave 8 billion dollar bailout to in 2006)? I think if I was Arthur T. I would get a loan from the Mafia first. At least they understand loyalty. Read about Albertson’s, read about radio shack, kmart sears, All represented by the 2 new CEO’s. Look how great they’re doing. They continue to put out false hope in the public;s eyes through press releases. Not once have these cowards been questions in front of the media. But the management that walked out a month ago, they have. We can call it old fashion, but I was taught that those who lie, like to hide. And I can speak for Millions of customers their sentiment of concern for the consumer and workers is factitious.

  • TheBrett

    It might be possible to build some of that stuff more deeply into the company’s by-laws, so that future Boards are constrained by them. A union would help, but probably only one organized by the workers themselves would really keep the company culture alive – one of the bigger outside unions would bring the same type of problems that the shareholders have brought in terms of changing the work environment.

    More broadly, we need to consider moving away from C Corporations under the law towards more B Corporations. The latter have to explicitly include social goals in their charters as well as profit maximization, giving both legal protection to company officers to do so and a means of going after Board members who might want to loot the company for short-term shareholder pay-outs.

  • Rick Vance

    I have to wonder about the mindset of Arthur S. Is he really willing to destroy the company including all the goodwill that has been built over decades, just so that he can be even more obscenely rich than he already is? Is he so blinded by hatred that he is willing to become a reviled figure in New England?