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The Boston Globe

Business

shirley leung

Decision to sell is difficult for grocery families

The original Star Market in Watertown, operated by the Mugar family, in 1921.

David Mugar

The original Star Market in Watertown, operated by the Mugar family, in 1921.

After a half century of walking the aisles and greeting customers, Stephen Mugar was ready to sell the family business, Star Market. But he first wanted to get the blessing of his son, David, who was managing a store in Quincy.

“My response was, ‘Dad, look, you built this whole company from just about nothing, and you are entitled to do with it what you please,’ ” recalled David Mugar, who was 25 at the time.

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So in 1964, Stephen Mugar sold the company his father had started to Jewel Tea Co. of Chicago, setting off a half century of change with a half-dozen owners. Star Market would never be the same — so much so that the younger Mugar refuses to shop there anymore.

“It has been acquired by companies that don’t have the same quality standards that my dad had years ago,” said Mugar, now 75 and best known as the impresario behind the Fourth of July fireworks on the Esplanade. “Personally, I shop at Stop & Shop. My father is turning over in his grave as I say that.”

To sell or not to sell, that is the question the Demoulas family of Market Basket faces today. It has been entertaining several offers, including one by ousted president Arthur T. Demoulas, who wants to buy out rival cousin Arthur S. Demoulas. A sale could break a standoff that has thrown the popular supermarket chain into turmoil, with employees walking out on the job and customers avoiding the stores in a show of solidarity, unless Artie T. returns.

Many of New England’s homegrown family grocery chains have been sold off already. For some, like the Mugars, the sale has been a relief, a break from the relentless and ultra-competitive supermarket world. For others, it was a bittersweet experience to give up a company built over generations.

The Goldbergs of Stop & Shop never wanted to sell, but it was the late 1980s, and the barbarians were at the checkout. In 1988, private equity firm Kohlberg Kravis Roberts & Co. engineered a hostile takeover of the chain, which had several hundred stores and 50,000 employees. A year later, Avram and Carol Goldberg, who ran the company, were unceremoniously dumped.

Before KKR, their daughter, Deb Goldberg, was being groomed to be CEO. Even after all these years, she said, it’s difficult for her family to talk about it.

“It was a devastating experience,” said Goldberg, 60, who is a candidate for state treasurer. “This was a family business, even as it grew.”

Goldberg spent her childhood at the stores because her parents worked in them full time. On weekends, she would tag along with her grandfather, supermarket legend Sidney Rabb, who built the modern-day Stop & Shop. He’d walk the floor, where employees were on a first-name basis with the boss.

“I was taught that my responsibility as an adult was to make sure all these families have economic stability,” said Goldberg.

The Goldbergs were forced to sell long ago, and Stop & Shop was later acquired by Dutch conglomerate Royal Ahold, which continues to own New England’s largest grocery chain. Goldberg is biased here, but she believes family-owned is better. If supermarkets need to be swallowed up by a big corporation or private equity firm to survive in a global economy, executives should try to retain the family involved.

“If they can figure a way to do that, they will have greater success,” said Goldberg.

From time to time, the Roche brothers, Ed and Rick, will get an offer to buy their namesake grocery chain. Their father Pat and uncle Bud started the business with a store in Roslindale in 1952. But the answer has been no.

“It just amounts to whether you want to cash it in or not,” said Ed Roche, the chief operating officer. “It’s a tough business, but to us, it’s in our blood.”

For the Roches, the biggest concern has been what would happen to the employees if corporate America took over. The brothers know the company, with 20 stores and 4,600 workers, wouldn’t be run the same way.

“We probably pay more attention with our hearts than to the bottom-line profit,” said Ed Roche.

The D’Amours — the family behind the Big Y chain from Western Massachusetts — say one of the keys to staying independent is to act like a bigger company and snap up small grocers. Through a series of acquisitions, Big Y now has 64 stores and 10,000 employees.

The other key is to study family feuds — and sometimes take advantage of them. Donald and Charlie D’Amour, first cousins whose fathers started Big Y, have been closely following what has been happening with the Demoulas clan.

“In the past, we have learned from other family businesses,” said Charlie D’Amour, Big Y’s chief operating officer. “We have learned from their turmoil.”

It was a different era when Stephen Mugar was building the Star Market empire. Back then, grocery markets were mostly run by immigrant families. David Mugar remembered how they were all fierce competitors, but also watched out for each other.

For example, his father agreed with the Demoulases that he would not head north of Boston, and they agreed not to expand south.

His father sold the business because the competition was getting too tough. It was just as well for the younger Mugar, who knew then he didn’t want to spend his life in supermarkets.

“I didn’t have the appetite,” he said.

David Mugar went on to become an entrepreneur, a developer, a civic leader, and, most notably, a philanthropist who gives us fireworks and the Boston Pops on the Fourth.

It was, perhaps, the best deal for all of us.

Shirley Leung is a Globe columnist. She can be reached at shirley.leung@globe.com. Follow her on Twitter @leung.
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