In June of 2014, Tewksbury-based Market Basket made national headlines with the strangest of occurrences — a worker walk-out in one of the region's most successful, family-owned enterprises.
The trouble started when the company's board dismissed Market Basket President Arthur T. Demoulas. What the board didn't count on was the swift backlash from employees, as well as the public's willingness to boycott the store until Demoulas was reinstated. The protest stretched from June until August, at which point the board capitulated by allowing Arthur T. Demoulas to purchase a majority-share in the company.
Now, one year removed from the start of the trouble, the whole debacle seems no less remarkable. Non-unionized store clerks, stockers, managers and truck drivers banded together — without pay — to support Arthur T. Demoulas. Customers refused to shop in stores. Media breathlessly covered each new development. After two months, the machinations of a company's board were unceremoniously torpedoed.
"It's amazing," Harvard Business School historian Nancy Koehn said. There were "workers risking their jobs, walking off the job in order to save a CEO's job? A multi-millionaire?" Koehn notes that it was virtually unheard of.
Changes in company leadership can sometimes have deleterious effects on the bottom line. For Market Basket that hasn't been true.
"They're paying down the debt, $1.6 billion, much faster than they thought. Sales were very, very robust over the last year, more than they expected, even though they took somewhere between $530 and $605 million hit in lost sales over the course of the two months that the stores went empty," Koehn said.
Koehn said the company's subsequent success is surprising when you consider how bad things got during the strike.
"Workers refused to work, and drivers didn't bring food to the stores, and lots of customers migrated to competitors out of need," Koehn said. "Those folks have more than come back."
Now, Market Basket appears to be in a period of expansion, according to a recent Boston Globe article. Revenues are robust, store openings are in the works, and employees are back at work.
"Something is going very, very well here," Koehn said. "There is a new world here of consumers factoring in how businesses do their business, how [companies] treat their employees."
Koehn added that Demoulas' soft touch with employees spurred a virtuous cycle within the company. "If you deliver breakthrough service to your employees, they will deliver great service to your customers." Demoulas' philosophy is emblematic of "family culture, the sense that you could come and build a career here, that's in shorter and shorter supply," Koehn said.
Now that business has come back, Market Basket will reposition to address future demands for grocery stores.
"They've opened five stores, they're planning two more, including stores with a more upscale assortment of merchandise and fixtures, lots and lots of emphasis on healthy food."
Now grocery shoppers want to spend more in grocery stores, including eating meals and socializing, Koehn said. Luckily for Market Basket, its employees do too.
>> Nancy Koehn is a historian at the Harvard Business School, and the author of Ernest Shackleton: Exploring Leadership. She joins Boston Public Radio Wednesdays at 1 PM.
