Market Basket: One Year After the Family Dispute
TEWKSBURY, MA - It’s been one year since Market Basket’s near meltdown, and looking at the company’s financial records it's hard to think it had much of an impact on business. In fact, the company says its on track to record total revenues of about $4.8 billion in 2015, the most in its near one century history.
“Our business model is completely intact, and we’re running the shop with a lot less distractions,” Market Basket’s President and Chief Executive, Arthur T. Demoulas, said in an interview with The Boston Globe.
It is also in expansion mode, opening five new stores in the last year, some with upscale accents such as massive gourmet cheese islands, expanded organic food offerings, and outdoor cafe seating. Two new stores are under construction in Plymouth, MA, and Rochester, NH.
“We certainly see growth in the future—not just those two stores [in Plymouth and Rochester] but other locations we’re in discussions with,” Demoulas continued.
According to The Boston Globe, the company’s strong performance comes despite losing $405 million in sales amid an employee walkout organized last summer in protest of Arthur T. Demoulas’s firing as President and CEO by a board controlled by his first cousin, Arthur S. Demoulas. The walkout hindered the company’s supply chain and left its store shelves empty throughout the New England-area for weeks.
“The whole fiasco last year has done nothing but increase its business,” Kevin Griffin, publisher of the Duxbury-based Griffin Report of Food Marketing told The Boston Globe. “It increased curiosity about the company and strengthened existing customer loyalty.”
After being reinstated and taking control of the company last summer, Demoulas revamped the company’s board of directors, reducing its size from seven to five members. He also appointed directors who share his management philosophy.
“The new board does not disrupt the flow of the company, and it’s working well for the whole organization,” Arthur T. Demoulas said. “You can conduct constructive discussions and talk about positive business issues that move the company forward in a very simple way.”
Overall, sales are up 3 to 4 percent so far in 2015, said David McLean, Operations Manager for the company. In 2014, Market Basket collected about $4.1 billion in sales, even with the six-week shutdown that cost it $405 million. This year, it is projecting total sales of about $4.8 billion, proving that last summer’s disruption did not erode its customer base.
“That was really the great unknown,” McLean said. “We had experienced a 92 to 93 percent loss of sales, so people were asking whether the customers would come back.”
Well, not only did the company's customers come back, but it is seeing a lot of new faces as well.
