When a CEO gets fired, most people just go on with their life and maybe make a comment about how he’s probably rich, so he’ll be ok. But things turned out quite differently when Arthur T. Demoulas got fired as CEO from Market Basket.
We Are Market Basket by Daniel Korschun and Grant Welker is a true story about how entire communities in two states rallied behind a CEO who was loved and respected by the company’s employees and their loyal customers.
Anyone living in Massachusetts or New Hampshire in 2013-2014 was sure to hear about the local grocery chain, Market Basket, most nights when they turned on the news. The events over the course of the year even made it to national prime time news.
The story starts back to 1916, when a Greek immigrant named Athanasios “Arthur” Demoulas opened a modest grocery that he called DeMoulas Market in Lowell, MA. After Athanasios’ death, DeMoulas Market would be run by his two sons, who grew it into a family owned and operated supermarket chain named Market Basket. That family ownership and operation, after the sons’ deaths, turned into drama that almost changed the future of Market Basket. The pinnacle of the drama initiated the most interesting and massive boycott that I have ever seen, and We Are Market Basket: The Story of the Unlikely Grassroots Movement that Saved a Beloved Business tells that story.
Sure, Arthur T. Demoulas, the grandson of Athanasios, would been fine financially after he was fired as CEO, mostly because he was one of the handful of shareholders of the company. The other shareholders, who were his relatives, wanted to distribute a significant portion of the company’s cash holdings to the shareholders as dividends. Then the plan would be to sell the company. Arthur T was against the sale, because he foresaw the values that Market Basket was built upon over the previous 100 years would be wiped out by new owners who would place profit over service. In the board of director’s opinion, Arthur T. had to go. The man leading the charge to fire Arthur T. was his cousin, Arthur S. Demoulas.
Most grocery chains today are either large supercenters where you could buy much more than just groceries from named brands, or they are smaller specialty stores charging a premium for their local and smaller market products. Both types of chains select locations for their stores based on forecasted profitability.
Market Basket has a niche in the grocery business. They sell groceries, and not much more. They sell large national brands, but also more local brands than a typical grocer. Their prices are the lowest in every market they are in, by a very wide margin. Their stores are generally in lower income areas that they select based on the needs of the community rather than return on investment. Their stores operate to provide great service to their customers as opposed to reducing operational costs for higher profit (for example, no self checkout lanes, so employees get to engage with every customer).
Market Basket has operated with those same values since Day 1.
Arthur T. knows Market Basket, having grown up in the company his entire life. In most people’s opinion, Arthur is a different type of CEO. He truly cares about his employees. He cares about his customers over profits. He cares about communities. He even cares about his suppliers. He wants Market Basket to continue to be run with those values as it had been for the past 100 years since his grandfather Athanasios started his single grocery store. Running the company this way made Arthur T., and all of the other shareholders, very wealthy. Running the company this way is the reason they were all wealthy. However, most of that wealth was just on paper, because the company held onto a significant amount of cash to allow it to reinvest into the employees, communities, and growth.
When the employees learned that Arthur T. was getting fired, they protested. They walked out. They supported their CEO. And they weren’t even union. This was a significant financial risk for the employees and their families. But it was a risk they were willing to take for their CEO. They were willing to fall on the sword for Arthur T.
This walk out caused every Market Basket to essentially shut down. Customers boycotted Market Basket to support Arthur T. Suppliers, many of whom relied solely on Market Basket for their business, refused to ship to Market Basket to support Arthur T.
Walking into a Market Basket at this time was eerie. The shelves almost were empty. There were virtually no customers. There were very few employees. The company that earns millions of dollars each day was now losing money every day that the protest continued.
Would the employees, suppliers, and communities win, and put Arthur T. back at the helm? Would the shareholders win, and find a buyer for a company that was getting devalued every day? Or would it be a stalemate with no winners, threatening the company to go into bankruptcy, and leaving thousands of workers with no job.
The Market Basket story is fascinating. When, in the history of companies in America, has a group of people, let alone an entire non-union staff, customer base, and suppliers rallied around a CEO? Not in my lifetime.
We Are Market Basket details the history of Market Basket and the Demoulas family to give context about why the CEO garnered so much loyalty. It explains the events leading up to the firing, and the protests that happened until Arthur T. was (spoiler alert!) reinstated.
I highly recommend We Are Market Basket. It is a great story about early 1900s entrepreneurship, corporate drama, and history of a company that employees, customers, and suppliers have utter loyalty for. I would view the events that happened as unfathomable if I didn’t see it for myself on the news every night.
The book is a great read even for those who don’t know the company. Market Basket is proof that a company can be both good to its employees, customers, and community and still be extremely profitable for the owners.