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editorial

Market Basket’s descent into greed

THE BATTLE over Market Basket supermarkets by rival factions of the Demoulas clan led to the recent board decision to distribute $250 million to the nine family shareholders — an uncharacteristic act of greed for a firm known for its generous treatment of its workers and concern for price-conscious shoppers.

The payout is a victory for the wing of the Demoulas family that contends that CEO Arthur T. Demoulas has been much too generous in profit-sharing with employees, while cheating the owners. Shareholders have already received $500 million in dividends over the last decade, but the branch of the family headed by Arthur S. Demoulas has reportedly sought as much as $1.5 billion. Responding to Arthur S.’s complaints, the board has met over the summer to discuss whether to fire Arthur T., amid an extraordinary outpouring of public support for the CEO, with employees taking out full-page Globe ads declaring “there is no one with more integrity, caring, and respect” than Arthur T.

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The feud is between descendants of two brothers; and a court has found that Arthur T. illegally transferred company assets to his own side. But whatever the merits of the family dispute, Arthur T.’s leadership has been inspired. Under him, Market Basket has expanded throughout New England, offering low prices and forcing rival chains to drop theirs in response. It’s also opened stores in economically challenged communities such as Chelsea, selling locally grown produce and other Massachusetts products.

With its streamlined, low-tech operations, Market Basket earned a profit of $217 million on $4 billion in revenue last year, a respectable figure in an industry of low profit margins. But that hasn’t been enough for the Arthur S. wing of the family. However the family dispute is resolved, New England shoppers and workers each have a vested interest in the continuation of the policies of Arthur T.; that’s why the decision to disperse another $250 million to family members is so disappointing. It suggests that greed will drive the next chapter of the Market Basket story, no matter who’s in charge. And both the company and the communities it serves will be worse for it.

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