SOMERVILLE, Mass. — Thousands of customers are boycotting stores, drivers are refusing to deliver supplies and hundreds of employees are picketing outside offices and skipping work.
It’s not because the company in question, Market Basket, treats employees badly or has jacked up prices.
The grocery chain recently fired its beloved chief executive, whom employees, customers and suppliers have hailed as a rare creature in today’s business world: a man who put employees’ welfare ahead of the bottom line.
“Artie is a people person, who places people before profits; he cares about you as an individual,” said Joe Garon, who worked at Market Basket for 49 years until he was dismissed last month after publicly protesting the firing of his CEO.
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The Market Basket chain, which has 25,000 employees and 71 stores in New England, was founded by Greek immigrant Arthur Demoulas nearly a century ago.
His two grandsons, Arthur S. Demoulas and Arthur T. Demoulas, have warred over control of the company for decades. In June, Arthur S. gained control of the company board and fired Arthur T., who had been chief executive for eight years and had been managing the company for years before that.
It’s Arthur T. who employees say instituted a profit-sharing plan that allows retirees to walk away with an impressive retirement plan, who gave holiday bonuses, who encouraged grocery baggers to work their way up the corporate ladder to a corner office. It’s Arthur T. who kept prices fair for customers and who treated suppliers fairly and who always had a kind word for every customer, employer and supplier he encountered.
Eight middle managers in the corporate office in June asked for the chief executive to be reinstated; they were fired a few weeks later after leading protests about the firing. One rally at company headquarters drew 10,000 employees, customers and other supporters.
On a recent rainy weekday, the aisles of a Market Basket store in densely populated Somerville, Mass., were devoid of customers.
On the front window of the spacious market was a poster of Arthur T. Demoulas’ face, in red and blue tones in the style of Shepard Fairey’s “Hope” poster of Barack Obama. “I believe,” the poster read.
The protests are extraordinary, observers say. Companies are bought and sold every week, and CEOs are fired. But usually employees just watch the changes and hope they’re not next.
“What’s so unusual is that a community of workers who aren’t in a union have come together to try and exert some influence on the board and exert influence on the customer base,” said Carl Van Horn, director of the Heldrich Center for Workforce Development at Rutgers University.
The type of company Arthur T. Demoulas ran — at which employees and customers are treated with reverence — largely disappeared in the 1980s as shareholders and investors gained influence.
“There seems to be a feeling these days that everything is directed toward shareholder benefits, but what this case is saying is that it might not be the only way,” said Daniel Korschun, a professor at Drexel University who has been studying the Market Basket story. “The idea that employees and customers want to and need to have a say in the way a company is run — if this succeeds — this could gain traction.”
What’s also surprising to observers is that Market Basket’s business model of treating employees well actually succeeded. The company generates $4.2 billion to $4.6 billion in revenue, which amounts to about $60 million per store, Korschun said. Hannaford, a competing chain with twice as many stores, makes about $16 million per store.