The Market Basket dispute has created hardships for the company’s employees, customers and suppliers — but the economic pain inflicted on the region goes beyond that, because Market Basket does more than sell groceries. It's also in the real estate business, developing strip malls where its grocery stores serve as anchors to many mom-and-pop businesses whose livelihoods depend on the heavy traffic that results from having Market Basket as a neighbor.
The Market Basket in Ashland, just southwest of Framingham, sits at one end of a long strip mall. On the other end is a small store called 135 Discount, which sells "kitchen gadgets, toys, cards, greeting cards, gift bags, wrapping paper,” says owner Ellice Roberts.
After 35 years in business, Roberts and her husband John are used to ups and downs — but they’ve never seen anything like this. They estimate a 60 percent drop in business since customers started boycotting Market Baskets.
"We never realized that Market Basket had such an impact on us until that actually happened," she said.
But that’s just the most recent problem. More than 14,000 square feet of space at the Ashland plaza has been standing empty for a while.
"The more stores we can get in here, the better our business is because it makes us all stronger," she said. "Our shopping center is not filled."
The Roberts’ business is a victim of the battle along another front in the Demoulas family civil war — and this fight has been waging for months longer than the employee protests and customer boycotts in the news. The ripple effects have spread wide, slowing or stalling business at existing or planned strip malls throughout New England, creating small dead spots in the economies of cities like Revere, where a finished Market Basket store has never opened.
"It was ready to open, I believe, either last December or January," Roberts said. "The inspection was done. Everything was done. And all of a sudden, they never opened it."
Nicholas Continazzo — Revere’s director of municipal inspections — says residents call constantly with questions about the unopened store, and the city has asked Market Basket for an explanation.
“They haven’t been very proactive and responsive to the city," Continazzo said. "So I think a lot of people in city government and citizens are very angry over it, you know?”
Another new Market Basket store is sitting unopened in Attleboro. Building commissioner Doug Semple says Market Basket filed a permit to start the process of moving in back in January, but the company still hasn’t done anything.
"There are so many jobs that could be created for the area that are not being created," Semple said. "The security they have to put down there, and for the local police department to patrol the area — because we have a vacant building of this size — usually, when people are building buildings they want to get in as quick as they can, so that they can start the cash flow or occupy the building. I can’t imagine how much money they are losing on this building."
Probably a lot, says attorney David Klebanoff, who represents two members of the Demoulas board of directors. They’re on the side of the Demoulas family aligned with the Arthur T. Demoulas — the guy Market Basket employees want to bring back as CEO. Arthur T. was ousted by a wing of the family led by his cousin, Arthur S. Demoulas, who brought in new management.
Klebanoff’s clients say that new management isn’t providing information about how the company’s real estate is being managed. Market Basket actually owns or manages many of the strip malls its stores are in, through a company called Retail Management and Development, which has been run for years by two brother-in-laws of Arthur T. Demoulas.
And Klebanoff says when Arthur T. was CEO, Retail Management and Development did a lot of its work through networks of family and longtime friends.
"You have a family business with a gentleman who’s used to doing things his way, with people he’s been close to his whole life, and then these new guys come in from Wall Street, their fancy firms and all, and decide they don’t like it that way," Klebanoff said. "It should all be done by the Fortune 500 standards — everything goes out to bid and everything gets vetted by this consultant and that consultant."
Klebanoff says that’s slowing everything down, although the attorney for Retail Management and Development, Scott Lang, says its working with the Market Basket board to continue day-to-day operations.
“The work has not been interrupted, but certainly has not been performed at the level or the manner that it normally is," he said. "We’re waiting and hoping that Arthur T. is restored as president and CEO of the company, and we believe then that things will move along rapidly as far as future development goes, but until that happens the chain is really in a hiatus situation."
While power transitioned from one side of the Demoulas family to another — and one distinctive way of doing things to another — Waltham mayor Jeannette McCarthy had to work hard to keep a Market Basket development in her city on track. The company delayed signing a lease for a parcel of the property.
"They’re the primary tenant of the whole project, so their existence is very important to us,” McCarthy said.
McCarthy says Market Basket eventually signed the lease, and the store is set to open in December. Another tenant of the development, the sports bar Jake n Joes, isn’t worried about the Market Basket situation, says restaurant director Gerry Fruggiero.
"I believe the concept that we have is very strong and whether Market Basket is open or not, we plan on doing business,” Fruggiero said.
Still, with the example of the completed-but-unopened Market Baskets in Attleboro and Revere at the back of her mind, McCarthy remains nervous about the future of the Waltham store.
“There’s a lot of concern at this time that there’s going to be no company at all," McCarthy said. "If there’s a new company, will they honor the lease? We don’t know."
So McCarthy and four other mayors have sent a letter to the Market Basket board and shareholders, pleading for the company to resolve the situation quickly and saying that, everyday, the economic implications for their communities become more dire.