We Are Market Basket
The Story of the Unlikely Grassroots Movement That Saved a Beloved Business
Authors: Daniel Korschun, Grant Welker
Pub Date: August 2015
Print Edition: $24.95
Print ISBN: 9780814436653
Page Count: 256
e-Book ISBN: 9780814436684
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From Family Feud to Unprecedented Corporate Protest, A Timeline of the Market Basket Movement
Arthur T. Demoulas vs. Arthur S. Demoulas
1917: Market Basket gets its start when Athanasios (“Arthur”) and Efrosine Demoulas, a hardworking Greek immigrant couple, open a grocery store in Lowell, Massachusetts. Located in a mill city hit by economic challenge and labor strife, DeMoulas Market serves mostly poor and working-class members of the Greek community, establishing a company tradition of “people first, groceries second.”
1954: Brothers Telemachus and George Demoulas purchase their parents’ business for $15,000. After successfully expanding the mom-and-pop store, doubling its size, the brothers set out to build a modern supermarket chain. Over the next 14 years, they open 14 more stores, one per year.
1971: George Demoulas dies of a heart attack while vacationing in Greece. As sole head of Demoulas Super Markets Inc., Telemachus sets out on a path of rapid expansion. Over the next two decades, he brings Market Basket down much of the road to where it is today: a $4.5 billion regional supermarket powerhouse with 75 stores and two million customers spanning three states: Massachusetts, New Hampshire, and Maine.
1990: The Demoulas family enters its first dispute over who owns how much of the business. George’s widow and children, including his son, Arthur S., launch a lawsuit against Telemachus, essentially charging him with stealing their equity. Years of legal wrangling culminate in a grueling four-month trial. In May 1994, after deliberating for thirteen days, the jury rules in favor of George’s heirs. The judge awards 50.5 percent of the company to Arthur S. and his kin.
2003: Telemachus Demoulas contracts an illness and dies, at age 82.
2008: Arthur T. Demoulas, Telemachus’ only son, is named President and CEO of Demoulas Super Markets Inc. During his five-year tenure, sales rise from $2.4 billion to more than $4 billion and the number of employees increase from 14,000 to 25,000. At the same time, tensions escalate between the cousins over their fundamental differences in management philosophy and corporate priorities. Board members on Arthur S.’s side take strong issue with Arthur T.’s using money for capital improvement projects, real estate investments, and employee profit-sharing that they believed belonged to the shareholders.
Spring 2013: The battle for Market Basket begins with a single minority shareholder’s change of heart. Rafaela Evans, the widow of Arthur S.’s brother, sets off a domino effect when she tips the minority vote from Arthur T., whose executive skills she had long admired, to Arthur S. As spring moves into summer, Arthur S., through a member of his team, attempts to turn up the heat by approaching the Boston Globe with accusations that Arthur T. is not fit for the role of CEO.
July 10, 2013: Arthur T. calls a meeting of all of his senior managers to inform them personally of trouble brewing. Sharing the news that the board had changed membership, he confides his certainty of a major item on the newest members’ agenda: to fire and replace him as CEO. Later that day, eight days before the next board meeting, manager Tom Trainor opens a Facebook account under the name “savemarketbasket” and starts a petition to show the board how much loyalty Arthur T. had from associates. The next morning, he awoke to 10,000 signatures. By the morning of the board meeting, 45,000 Market Basket associates had signed their name, vowing allegiance to Arthur T.
July 18, 2013: Supporters for Arthur T. swarm the hotel grounds of the board meeting. After twelve hours behind closed doors, while associates wait outside in the heat, the Board announces its decision. Arthur T. dodges a bullet. Neither voting to keep him as CEO nor adopting a motion to dismiss him, the Board simply sidesteps the issue.
July 25, 2013: The Board votes in favor of distributing $300 million to family shareholders, an action adamantly opposed by Arthur T.
September 2013: The battle to save Market Basket spills into the courts. The judge denies Arthur T.’s preliminary injunction request to block the disbursement of $300 million to shareholders. Subsequent rulings enable directors to continue with their push to remove Arthur T. as Chief Executive.
June 23, 2014: The Board fires Arthur T., along with two of his top executives, Bill Marsden and Joe Rockwell. Arthur T. Demoulas, widely respected and beloved for creating a company culture with four core pillars—service to the community, employee empowerment, originality, and a feeling of family—is replaced with two co-CEOs: Felicia Thornton, former CEO of Knowledge Universe US, and Jim Gooch, former president of RadioShack.
June 24, 2014: A total of seven Market Basket managers pack up and quit in protest of Arthur T.’s ousting.
July 13, 2014: Associates at the Burlington Market Basket hand out pamphlets to shoppers stating, “We are Market Basket and we need your help.”
July 16, 2014: A group of Market Basket associates approach Thornton and Gooch with a simple demand: bring back Arthur T., Marsden, and Rockwell. Responding in a curt email, the co-CEOs state their intention to convene a special Board meeting to discuss the demands, with a clear message addressed to each associate: “If you choose to abandon your job or refuse to perform your job requirements, you will leave us no choice but to permanently replace you.”
July 18, 2014: The “We Are Market Basket” movement organizes its first rally at company headquarters in Tewksbury, MA. Nearly 3,000 associates and customers gather to reinforce the demand for Arthur T.’s reinstatement.
July 19, 2014: Nearly 400 warehouse workers and drivers walk off the job, essentially shutting down deliveries to Market Basket stores. Vendors begin to halt shipments, often at considerable financial sacrifice.
July 20, 2014: Thornton and Gooch send couriers to the homes of eight of Market Basket’s senior managers, including Tom Trainor. Each receives a written notification of their termination, effectively immediately.
July 21, 2014: Arthur T. issues his first statement since being terminated as CEO, appealing for the reinstatement of the fired employees.
July 22, 2014: Protests are held at all 71 Market Basket stores.
August 1, 2014: As “We Are Market Basket” protests and rallies continue, as many as 700 associates declare their intention to resign if Arthur T. is not reinstated.
August 12, 2014: After telling store managers to reduce payroll to correspond to the sharp drop in revenue, the new co-CEOs send out a “final warning” to hundreds of Market Basket associates. In a signed letter, Thornton and Gooch inform the protesters that if they did not return to work by August15, the company would consider their jobs abandoned and terminate their employment.
August 13, 2014: Massachusetts Governor Deval Patrick meets with Arthur T. and promptly urges Market Basket employees to “stabilize the company” by returning to work while a deal is finalized.
August 27, 2014: The shareholders of Market Basket reach a deal to sell the remaining 50.5 shares of the company to Arthur T. for a reported $1.5 billion. The beloved CEO is reinstated, saving Market Basket.
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