Market Basket sale to former boss ends bitter dispute

Market Basket workers celebrating Workers at the Market Basket stores celebrated on Thursday after hearing their beloved boss would be back

Related Stories

The US supermarket chain Market Basket has agreed to sell to a majority stake to former boss Arthur T Demoulas, ending a months-long dispute.

In announcing his purchase, Mr Demoulas told workers, who had gone on strike in July to protest against his firing, "You are simply the best".

The 70-plus stores belonging to the chain are mostly located in the northeastern United States.

It was estimated the company was losing $70m (£42m) a day during the strike.

Late on Wednesday, Mr Demoulas announced that he had reached an agreement to purchase the 50.5% of the company he did not control from a rival faction controlled by his cousin, Arthur S Demoulas, for $1.5bn.

"Words cannot express how much I appreciate each and every one of you," Mr Demoulas said while addressing workers outside the company's Massachusetts headquarters on Thursday morning.

The company employs roughly 25,000 people in the area.

Long-running dispute

The saga - which had shades of a soap opera - began in June, when Mr Demoulas was ousted as chief executive of the company by a rival faction of his family, which controlled 50.5% of the firm.

The dispute was said to have been over a series of investments Mr Demoulas had authorised, which led to large losses and smaller payouts for Market Basket's shareholders.

Market Basket workers protesting Workers and shoppers went on strike in July to protest the firing of Mr Demoulas after a family dispute

However, the dispute simmered for a month until the new management fired eight workers who had protested against Mr Demoulas's demise in July.

That is when a campaign led by Market Basket workers and customers to "Save Market Basket" began to gather steam.

Workers went on strike, truck drivers refused to deliver fresh produce and meat, and shoppers boycotted stores, leading to empty shelves and the near-collapse of the firm.

Efforts on social media also paid off, with an anonymously-run Facebook page to save the firm gathering over 90,000 likes and the hashtag, #MarketBasket, trending often on Twitter.

Twitter #MarketBasket tweets The reaction on social media to news that a deal had been reached was mostly positive

This brought national and international attention to the plight of the workers, stunning many in the industry both because the workers were not unionised and because they were campaigning for an almost-unheard of thing: the reinstatement of their boss.

Although negotiations between Mr Demoulas and his cousin, Arthur S Demoulas, continued through July, tensions were further agitated when Market Basket's new co-chief executives announced a job fair in early August to hire replacement workers.

'In awe'

Now, those workers are breathing a sigh of relief.

Many tweeted pictures of newly-stocked shelves at several stores where meat counters and fresh produce areas had been empty for the past few weeks.

The question now is whether the chain, which has been essentially not in operation for two months, can recover from the essential collapse of its operations.

Market basket tweet about being in stock Market Basket stores had been losing an estimated $70m in total a day as the protests wore on

Boycotting customers said they would return to shop at the store immediately, as the chain is known for its lower-than-average prices.

"See you at 7 AM tomorrow to buy anything on the shelves!!!! I don't even have a dog but I'll buy dog food if needed!!" wrote one.

Mr Demoulas, in finishing his address to workers before going to inspect several processing facilities, echoed the sentiments of many participants and observers when he said:

"I am in awe of what you have all accomplished."

More on This Story

Related Stories

More Business stories

RSS

BBC Business Live

  1.  
    SONY PROFIT WARNING 07:32: Breaking News
    Sony office

    Sony has issued a profits warning. It expects to report a much deeper loss this year than originally forecast. The new forecast is for a loss of 230bn yen (£1.3bn) for the year which ends 31 March. Its previous forecast was for a 50bn yen loss.

     
  2.  
    JD SPORTS PROFITS 07:29:

    Profits at retailer JD Sports doubled in the first half of the year. Before exceptional items it made a pre-tax profit of £19.9m. Sales at stores open for more than a year rose 13% from the same period a year ago. But its fashion business which includes Scotts and Bank had a "disappointing" first half, the company said.

     
  3.  
    INDITEX RESULTS 07:10:
    Zara store

    The world's biggest clothing retailer, Inditex has posted a 2.4% fall in first half net profit. The owner of Zara, made 928m euros (£738m). That was not as bad as some analysts were expecting. The company also said that sales for the start of the third quarter rose 10%.

     
  4.  
    SPACESHIP CONTRACT 06:56: Radio 5 live
    Space X Capsule

    Nasa has awarded up to $6.2bn (£3.8bn) to Boeing and SpaceX to develop space vehicles that can take crew into space. The firms are aiming to have their spaceships ready by 2017. Since the space shuttles were retired in 2011, the Americans have relied on Russia and its Soyuz vehicles to get to the International Space Station.

     
  5.  
    SCOTTISH REFERENDUM 06:38: BBC Radio 4
    Scottish bank notes

    Former Bank of England deputy governor Sir John Gieve tells the Today programme he expects Bank staff to be at work very early on Friday morning to try to calm markets, whichever way Scotland votes in the independence referendum. In particular, the Bank will be busying itself with the possibility of "deposit flight" so that "we don't get the sort of panic that there was with Northern Rock". That means for starters making sure that cash machines remain fully stocked.

     
  6.  
    ARM CHIEF EXECUTIVE 06:27: Radio 5 live
    Arm processor

    It's arguably Britain's most successful technology company, but you may have never heard of it. ARM designs computer chips and is worth almost twice as much as Marks and Spencer. On Wake Up to Money chief executive Simon Segars says most of the firm's customers are in California, China, Taiwan and South Korea. "It's a shame" there are not more technology companies in the UK, he says. People have been keener to go into financial services, Mr Segars says.

     
  7.  
    SCOTTISH REFERENDUM 06:16: Radio 5 live

    Whichever way the Scottish independence vote goes, the business impact "remains unclear" says Nora Senior, chair at Scottish Chambers of Commerce on Wake Up to Money. Big questions over currency, Europe, debt, pensions and tax were raised in the run up to the vote, she says. "Business wants a decision that is clear and swiftly executed," Ms Senior says.

     
  8.  
    BEREAVEMENT AND WORK 06:10: Radio 5 live

    A third of employees who have suffered bereavement in the past five years felt that they had not been treated with compassion by their employer, according to a survey by the Advisory, Conciliation and Arbitration Service (ACAS). It is launching guidance for companies. "Managers need appropriate training and support," said Sir Brendan Barber, ACAS chair on Wake Up to Money.

     
  9.  
    PHONES 4U RESCUE 06:00:
    Phones 4U sign

    The Financial Times is reporting that Vodafone and EE have approached the administrators of Phones 4U about buying parts of the failed business. Around 550 shops and 6,000 jobs are at risk. The private equity owners of Phones 4U and its founder, John Caudwell have blamed the aggressive tactics of EE and Vodafone for the collapse of the firm. Both network operators deny those accusations.

     
  10.  
    05:59: Matthew West Business Reporter

    Morning everyone. As always you can get in touch with us via email on bizlivepage@bbc.co.uk or twitter @bbcbusiness.

     
  11.  
    05:59: Ben Morris Business Reporter

    We'll get the latest unemployment figures and data on earnings at 09:30 this morning. Plus the Financial Times says that Vodafone and EE are looking to buy parts of their former customer, Phones 4U. Stay with us.

     

Features

From BBC Capital

Programmes

  • Three men solving a puzzleThe Travel Show Watch

    Why tourists are heading to Budapest for the chance to break out of a room

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.