NORTH ANDOVER — Arthur T. Demoulas: autocratic business ruler or beloved Artie T., victim of a hostile takeover?
Whichever view of the Market Basket CEO prevails in the minds of the supermarket chain’s 25,000-plus employees and its millions of customers will likely determine the outcome in any prolonged street – meaning very public – fight between the three-member executive committee of the company’s board and the CEO.
So far the sides have crafted dueling narratives revolving around the other’s use of power.
This week, the Market Basket board placed Arthur T. Demoulas along with his son, Telemachus, and daughter, Madeline, and a few executives on paid administrative leave pending an investigation by the Boston law firm Quinn Emanuel over Arthur T.’s conduct including whether he was planning a retaliatory work stoppage in response to board oversight directives.
Artie T. supporters have denied that he had undertaken plans for a stoppage.
The CEO said the board, appointed by his sisters, is engaged in a hostile takeover of a business that has succeeded under his leadership.
Market Basket paid off the last of its $1.6 billion debt incurred in 2014 when the Artie T. side of the family, buoyed by a boycott and employees’ support, bought the majority 50.5% company ownership from his cousin, Arthur S. Demoulas.
As it now stands, Arthur T. Demoulas owns 26% of the company and each of his three sisters own 20% with the remaining percentage in trust for grandchildren.
Lack of communication
Business school professionals suggest a corporate brawl won’t be received by the public the same way it was in 2014.
Also, that discord poses risks for the popular company, risk of losing market share and its hallmark customer and employee loyalty.
Customers’ opinions on the Market Basket division range from disappointment to anger to indifference.
Observers agree the New England company, started by Greek immigrants Athanasios and Efrosini Demoulas in 1917, which opened a single store on Dummer Street in Lowell, is successful.
Especially in Massachusetts where it operates 57 stores, 14 of which are in Essex County.
Since 2014, Market Basket has grown from 71 to 90 stores and seen its revenue climb from $4.6 billion to more than $7 billion.
But the Market Basket executive committee claims Arthur T. has failed to provide the board members basic oversight including consulting with them on the company’s annual budgets and large real estate purchases.
Also they said he has resisted establishing an appropriate succession plan, and has asserted he has the right to appoint his children to succeed him.
One member of the board of directors’ executive committee went so far as to say that he didn’t have Artie T.’s phone number, had no way of contacting him and had never been to Market Basket headquarters in Tewksbury until Thursday.
“This is the first time I’ve ever been here,” Michael Keyes said in a telephone interview Thursday night, adding that Arthur T. Demoulas has tuned the board out, denying them the cooperative role that the family had agreed to under company by-laws established 11 years ago.
Keyes said Arthur T. Demoulas has not consulted with the board on real estate investments.
“We don’t find out about something until it’s in the newspaper or on the local radio,” said Keyes. “And some of those things are, you know, large capital expenditures.”
The other two members of the board’s executive committee are chair of the board Jay Hachigian and Steven Collins.
Keyes, a North Andover resident, noted that the situation appears to be at a standoff, as neither side has made any overtures to resolve differences.
2025 different than 2014
Bentley University marketing professor Ian Cross said the recent Demoulas family fighting feels like a plot line from the TV show “Succession.”
An Andover resident, Cross said he expects most employees and shoppers will wait for the Emanuel investigation results, and that if it turns out a family feud is the case, few people will want to get involved.
A feud has the potential to hurt the brand, he said.
“The mood of the country has changed — people feel more stressed and less certain economically, politically and socially,” he says. “I think this feud is an unnecessary distraction for consumers. If prices stay low, and service stays the same, I don’t think shoppers will boycott the store.”
Scott Latham, a UMass Lowell professor in the management department at the Manning School of Business, said fights between CEOs and boards are common in the business world.
People aren’t going to boycott the store over a fight between the CEO and his board of directors, he said.
“In 2024, people have bigger fish to fry – inflation, Trump, Ukraine, horrible New England weather,” he said.
The only way the fight plays out is: “Artie T is permanently removed from his position,” says Latham.
“The board represents a majority of the shareholders, and have a responsibility to ensure that leadership is sound and ethical.”
Latham, who worked at Market Basket as a teen and appears in the documentary film on the 2014 Market Basket revolt, “We the People: The Market Basket Effect,” said he sees irony in the current situation.
“Artie T. took on a watered down position to keep control, and now he lacks the leverage as a shareholder to enforce his will,” Latham says.
Shoppers speak out
Market Basket shoppers in the parking lot at the North Andover Mall on Friday expressed exasperation, and also hope that Market Basket continues to be a comfortable place to shop, being easy on their pocket book and cultivating the good feeling they enjoy there.
Susan Haverstick loaded tomato plants she bought at Market Basket into her car.
The supermarket is her go-to place because of its lower prices and the way they treat their employees.
She wonders if money is the source of the strife. It usually is and it’s not worth it, she said.
Another shopper, Helene Spoto of Andover, is a Market Basket devotee who boycotted the store during the 2014 family battle.
She appreciates how the company takes care of its workers by sharing profits with them, placing shared earnings in their 401K accounts and awarding bonuses.
She said she hopes the supermarket doesn’t mess with a good thing – their success and treatment of customers and workers.
“I’m a little nervous as to what’s going on, but I’d like them just to settle their differences,” she says.
Comments on The Eagle-Tribune social media account express similar sentiments, but also a number of shoppers willing to take up the torch again on behalf of Artie T.
Also shoppers are willing to seek shopping alternatives.
The messaging from the Market Basket board has been consistent over the past several days.
Nothing is changing, the company is focused on daily operations, keeping prices low and continuing profit sharing for workers.
Time will tell whether the family owned regional chain with the largest share of food shoppers in Essex County and Greater Boston remains a fan favorite.