Big Changes Could Be Coming At Market Basket
BOSTON (CBS) – The family that runs one of the most successful supermarket chains in the country may vote to oust one of their own.
The Demoulas family, who owns Market Basket, has been embroiled in battle for years, but a vote to oust CEO Arthur T. Demoulas may saddle the company with more than $1 billion in debt that could change the company forever.
Related: Supporters Rally For CEO
Ted Clark, head of the Center for Family Business at Northeastern University says, “It’s not unusual in many respects, because there’s money and family involved. One of the things that’s unusual is the fact that it affects so many people in New England. They’re a very large, very successful operation.”
WBZ NewsRadio 1030′s Anthony Silva reports
Market Basket is free of debt, with $217 million in profits last year.
“The Demoulas family has a great reputation for running what is widely considered to be one of the finest family-run grocery businesses in America,” says Kevin Griffin, publisher of the Griffin Report of Food Marketing. “They’ve had their history of family disputes, and anyone who’s followed that family knows that it’s gotten pretty ugly.”
Griffin says other family members want to take millions of dollars out of the company.
“It’s gone to the Board, which is trying to pressure the other side of the family to assume a tremendous amount of debt to cash out of the business.”
Hundreds of Market Basket employees are expected to picket Thursday in front of the meeting in support of the CEO.
Griffin says Arthur T. Demoulas is upholding the family values he was taught, which includes taking care of the people who make your company successful.
Griffin says if Arthur T. Demoulas is ousted, the board will most likely go ahead with plans to assume $1.5 billion dollars in debt, and distribute it to shareholders, which he says changes the business model tremendously. Griffin says that debt must be serviced, meaning food at Market Basket would cost more.
Market Basket now has more than 70 stores, and 21,000 employees.
Those employees have enjoyed free health care, profit sharing and annual holiday bonuses.