Connie wrote this as a comment, but we wanted to use it as a guest post. A longtime loyal customer, she shops mainly at Newburyport and Seabrook 41, over the years she has frequented many of our other stores when she visits friends and she notes that the associates “are the most polite and courteous in any retail business! Your prices cannot be beat. The stores are always clean and it is a pleasure to know each time I shop there I am getting More for MY dollar, in more ways than one!” Thank you Connie for your continued patronage and your support in this battle. Please know that your voice is an important one and be sure to encourage others to visit the site and send along their thoughts…together we will Save Market Basket!
It is amazing to me that the Board of Directors is still not satisfied. Market Basket moved up 5 spots in 2013 in the top 75 Retailers in the US and Canada to spot #36, on the strength of opening 4 new stores. They did this through the dedication of their employees and because they have a very loyal and happy customer base.
Their earnings of 8.07% on $4.1 Billion is one of the highest in the food industry. Consumer Reports ranks Market Basket #7 out of 52 Nation-wide chains and yet the Board is not satisfied. They need to look at the big picture and not kill the cash cow of profit they are now enjoying. Please see below a compilation of articles from different newspapers and periodicals over the last few months all referring to the profit of Market Basket. True, all corporations should be looking to the future and continue to explore new outlets of profitability, but smearing ATD’s performance, when in fact it does not appear to be true is another story…
Board of Directors – please remember Enron which shows us what a company and its leadership are capable of, when they are obsessed with making profits at any cost!
July 12, 2013 – Grant Welker at the Lowell Sun – “Since Demoulas was appointed CEO in 2008, Tewksbury-based Market Basket has increased sales by one-third, added about 8,000 employees, maintained one of the highest profit margins in the business, and won acclaim from industry analysts, according to the company.”
July 18, 2013, Galen Moore, Boston Business Journal – “Managers have opened the books of the privately held, family-owned company. Market Basket’s 2012 revenue was $4.01 billion. In 2007, the year before CEO Arthur T. DeMoulas took over, it was $2.48 billion. In that time, the chain has opened 12 new stores, all of which it has financed out of its own pocket, fueled by an impressive 8.07 percent EBITDA margin (2012), according to the executive. In many cases, Market Basket owns its own store properties – which means investment in a new store can range up to $40 million or $50 million. “They’re a wildly profitable company for the industry,” supermarket industry analyst Kevin Griffin (The Griffin Report of Food Marketing) told me. They have no debt and they’re old-fashioned old school stick to their knitting. They don’t get involved in selling anything other than grocery products.”
July 20, 2013 – Grant Welker at the Lowell Sun – “Still, Market Basket has grown, particularly in the last year or so. The chain was the fastest-growing retailer in eastern Massachusetts based on new square-footage for the year ending April 30, according to Burlington-based real-estate company KeyPoint Partners. The company added 221,700 square feet of new space over that time. It also will soon open its first Maine store, and three others in Massachusetts are planned. The lawsuit against Market Basket said profits have “stagnated” while sales have grown “dramatically.” In an interview a week before the vote, Arthur T. Demoulas talked more about the importance of keeping employees happy and prices low. “We say we’re a people business first and a food business second,” he said. Still, Market Basket has one of the highest operating profitability margins, known as a EBITDA margin, in the industry, according to the company. In the first quarter of this year, the margin was 8.07 percent. The average for regional supermarkets, such as Harris Teeter, a Southern chain just purchased by the national grocer Kroger, is 6 percent, according to a report by Moelis & Company, an investment bank. The average margin for so-called multi-regionals, companies like Stop & Shop parent company Ahold or Kroger, is 5.4 percent, according to the bank, and the average for national grocers like CostCo, Target and Walmart is 7.3 percent.”
7/31/13 – Kevin Griffin, The Griffin Report of Food Marketing – “The short version of the story goes like this: Arthur S. Demoulas, who holds a (less than 1 percent) controlling interest in the family-held business, was attempting to have his cousin, Arthur T. Demoulas, removed as head of the company in a board vote July 18. Arthur S. led the charge to have the business assume new debt to the tune of $1.5 Billion (that’s not a typo—it’s Billion with a capital B) so the shareholders could “recapitalize” the business and “create value” for the shareholders. In layman’s terms, Arthur S. (and his side) wanted to borrow lots and lots of money to make huge distributions to family members (shareholders), many of whom are not involved in the business. It’s in effect saddling up the donkey with too much weight for all the wrong reasons. Arthur T. Demoulas (the company’s largest shareholder) has been running the company (like a champion, in my opinion) for years now and has been delivering consistent, unprecedented growth—and stellar profit margins by any measure. I’ve had an inside peek at the numbers and believe me when I tell I tell you that most similar businesses could only dream of such success. It is astounding that the board would want to remove Arthur T. from a job that he does so well—especially considering that nobody else in the family is remotely involved or interested in running the joint.”
August 27, 2013 – Boston Globe Editorial – “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.”