It’s been a month since Arthur T. Demoulas announced his agreement to buy Demoulas Supermarkets from the other side of his family, ending the employee protests and customer boycott that made national news. Arthur T. is back in control, but the company he’s leading is different in one key way — for the first time, Market Basket is operating in debt. Will the New England chain of supermarkets continue its expansion?
There were many fronts on the Demoulas family civil war. One of the quieter ones stretches for nearly a mile along route 128 in Waltham. Family members reportedly fought about expanding the supermarket chain to sites like this one, where the Polaroid Corp. once employed nearly 15,000 people.
“When was Polaroid abandoned?" asks engineer Jim Lamp. "Does anyone know when that was abandoned? We’ve been working on this for four years.”
Lamp drives around the half-finished development. He’s part of the close-knit team that builds and manages many Market Baskets and surrounding strip malls through a company called Retail Management and Development. This is one of their biggest projects ever. They point out the newly built Market Basket, Marshalls and Jake 'n Joes restaurant.
"We’ve cut the hills down, filled the holes in and tried to terrace it,” Lamp said.
Until about a year ago, this team was helping Arthur T. Demoulas open new stores at a feverish pace — as many as five a year.
"It goes back to the corporate philosophy — if you aren’t expanding, there’s no room being made for people to strive and have people climb the corporate ladder," Lamp said. "So I think that that was one of the things that really, really scared the employees – that that dream was potentially dying on the vine.”
Those are the employees who protested and supported a five-week customer boycott when Arthur T. was removed as CEO. Now that he’s been restored, this store and four others that were already in the works are moving again. Earlier this month Market Basket hired 400 people to work in the Revere store set to open first.
From the back seat, Retail Management and Development attorney Scott Lang says that given the wide public support for Market Basket, it would only be logical to go back into growth mode. They’re just waiting for word from Arthur T.
“If you look at a map and you literally take pins, you’ll see that territory is being expanded," Lang said. "And that’ll continue to take place. You just start looking at this from the standpoint of territory and you’ll see that there’ll be a tremendous demand to continue to build stores in this area, in this specific territory.”
Lang was mayor of New Bedford when Market Basket built a store there. He says that’s why he believes in the company so fervently — it cleaned up and developed a contaminated and blighted area, and, as a low-cost grocer, drew customers in regularly.
“Bringing Market Basket into New Bedford was the equivalent of giving every family in the city a $25 a week raise,” he said.
And Lang says unlike other developers, Market Basket did all that without asking for any local or state financial assistance. Lamp says there’s a simple reason why.
“It would slow us down,” he said.
It’s unclear if Market Basket will have the luxury to move that fast in the future. It’s not that the will and vision aren’t there — the problem is debt. Arthur T. has said he’s borrowing $1.3 billion to finance his purchase of the company, and acknowledged that will probably slow expansion. But industry analyst David Livingston says Arthur T. may have no other choice.
“A lot of times, the only way you can pay this off is you’ve got to keep growing," he said. "It’s almost like a pyramid.”
Still, Livingston says all this talk might be premature — Arthur T. hasn’t even inked the final deal to buy the company with the side of the family aligned with his rival cousin, Arthur S. Demoulas.
“I just wonder sometimes if Arthur S. is playing cat and mouse with the employees, and Artie T. and the public and the press, and if he’s going to do something to delay this deal or maybe cancel it,” Livingston said.
The Market Basket board declined to comment or provide any updates. Expansion was one of the big issues that divided the Demoulas family.
If Market Basket does grow, the stores themselves won’t necessarily look like they have in the past, says Lamp, walking around the Waltham store. This location is set to open before the holidays, and right now it’s still a vast, empty room. Lamp says with every new store they construct, they make small changes to modernize and provide more conveniences — adding things you might see at other supermarkets, like a coffee shop and wireless Internet service.
“It evolves slowly, so you wouldn’t necessarily see the changes, but it’s evolved quite a bit over the last seven years,” he said.
But Lamp says one thing probably won’t change: “Everything goes — you know, ultimately — goes through Arthur T.”
He says it’s fortunate the CEO is good at multitasking.
