Market Basket board weighs buyout

But company stands by new CEOs

The Market Basket board of directors met Friday but gave no time frame for acting on Arthur T. Demoulas’s offer to buy the grocery chain, even as employee protests and customer boycotts continued to cost it millions of dollars a day in lost business.

After meeting for several hours, the board issued a statement saying it would seriously consider Arthur T.’s proposal along with “any offers previously received and to be received in coming days.” The board also reaffirmed its support for co-chief executives James Gooch and Felicia Thornton, who have been vilified by employees for replacing Arthur T.

David L Ryan/Globe Staff
Arthur S. Demoulas entered the Prudential in Boston for the board meeting.

Meanwhile, thousands of people, many of them Market Basket employees, rallied in Tewksbury Friday morning to demand the reinstatement of their longtime boss. It was the third rally the dissidents have held in a week.


Arthur T.’s firing last month triggered the latest uproar in a long-running family feud over the highly profitable supermarket company. Rival family factions, led by Arthur T. and his cousin, Arthur S. Demoulas, have been battling over control of the company for nearly three decades. Arthur T.’s offer reviewed by the board Friday would buy his cousin’s side of the family out of the business.

Get Talking Points in your inbox:
An afternoon recap of the day’s most important business news, delivered weekdays.
Thank you for signing up! Sign up for more newsletters here

The refusal of many employees to carry out their daily tasks for the past week has undermined the grocery chain’s operations, making it impossible for many stores to order products, stock shelves, or even accept deliveries at loading docks. It was unclear Friday how much longer some stores could continue to stay open under those conditions.

The board’s statement also acknowledged the recent controversy is placing a strain on the company and urged employees to go back to work.

“The negative behavior of certain current and former associates is at variance with the company’s culture of putting the needs of the Market Basket customers first,” the board said. “It is now clear that it is in the interests of all members of the Market Basket community for normal business operations to resume immediately.”

Hours later, the company‘s co-chief executives issued a second statement that struck a much more conciliatory tone while asking employees to return to their jobs.


“We welcome back associates who are committed to Market Basket’s customers,” it said. “There will be no penalty or discipline for any associate who joins in what will be a significant effort to return to the unparalleled level of performance and customer service that have been hallmarks of the Market Basket brand.”

The company also promised employees, who are generally well paid by industry standards, that there would be “no change to Market Basket’s unmatched compensation and benefits.”

As Market Basket continued to struggle with the public relations aspect of the dispute, employees said the walkouts and rallies were becoming increasingly expensive for the supermarket company.

“Market Basket’s losing a lot of money on a weekly basis,” said Andy Lien, manager of an Andover warehouse that manages distribution of the company’s perishable products. “I can’t see them doing this much longer. They’re losing more money than my guys are. We do hope for an end, real, real soon so we can get these guys back to work.”

Bob Chausse, assistant store manager at the Chelsea Market Basket, said the upheaval has cost his supermarket about $1.1 million in lost sales.


Some customers have boycotted stores to protest actions by management, while others are simply turning to competitors to avoid the drama and the barren produce aisles.

Arthur T. Demoulas said on Wednesday that he had offered to buy 50.5 percent of company shares owned by Arthur S. Demoulas and other relatives on his side of the family dispute. Those relatives supported the firing of Arthur T. as president last month. The amount of the offer was not disclosed, but the Globe reported Friday that Market Basket has also received bids from other suitors offering to pay between $2.8 billion and $3.3 billion for the company.

The Boston Globe
Board member J. Terence Carleton (left) arrived for the baord meeting.

The board, which has hired JP Morgan Chase & Co. to help evaluate bids, said in its statement that it will review all the proposals and make a recommendation to the shareholders. But it will be up to those shareholders, including Arthur S., to accept or reject Arthur T.’s offer.

At Market Basket stores, managers said Friday they would keep encouraging customers to boycott until Arthur T. is reinstated. “We’re open for business, if you call it business,” said Jamie Cunneen, the assistant director of the store in Chelsea. “We are doing exactly what we’ve been doing until the boss comes back.”

Although drivers have stopped making deliveries and the company’s central office has stopped making orders, a few vendors and replacement drivers hired by the company’s new management are still delivering products.

Mike Morowski, the assistant director of a Market Basket in Haverhill, said his milk supplies were being replenished by an outside business but other dairy products, normally delivered from the company’s warehouse in Andover, were not.

Whether trucks were being unloaded varied by store, according to John Garon, a manager at the Market Basket in Burlington.

A truck full of deli meat and other perishables was left sitting on the parking lot of the Market Basket in Danvers until it spoiled, according to an employee who said the food was thrown into dumpsters.

“It’s been a nightmare” dealing with the replacement drivers, said John Doherty, the Danvers store’s assistant director. “We’re very diminished. No produce, no meat, no fish. Grocery aisles are probably 20 percent full.”

In Salem, a produce truck was left in the store’s back lot, where it would have been difficult for employees to unload it.

On Friday morning, thousands of workers and their families arrived by carload and busload at the Market Basket parking lot in Tewksbury for the largest rally yet in the uprising in support of Arthur T.

Steve Paulenka, one of the chief organizers of the rally and a longtime Market Basket employee who was fired Sunday, exhorted the crowd: “Nothing’s changed. We stay where we are, doing what we’re doing.”

Later, he reacted angrily to the statement from the company’s directors reiterating their support for the company’s new co-chief executives. The board has been “telling us for the last 13 months that everything they do is in the best interest of the company. [But now] they’re losing over $10 million a day for the company,” he said.

Casey Ross can be reached at
Erin Ailworth can be reached at
Jack Newsham can be reached at