Family Feud Delays Opening of Revere’s Market Basket Store

September 11, 2013
By

The aisles are shiny with wax, the shelves are ready for canned goods, and the cash registers are all set to be turned on, but the doors of the newly completed and long-anticipated Market Basket in the Northgate Mall aren’t likely to open anytime soon.

Market Basket attorneys sent a letter this week to Mayor Dan Rizzo and the City Council informing them that the ongoing internal strife within the company’s leadership and Board of Directors has caused them to delay the opening of the new Revere store. The letter apparently suggested that the opening – which was slated for mid-September – would come in early 2014 after the holidays.

A source close to the company told the Journal that all real estate decisions have been taken over by the Board. That source said this and all projects currently under construction are in jeopardy given the way the Board has handled matters so far.

All of that will come to a head this Thursday at a non-public meeting of the Board and the company’s dueling leadership in Andover.

The situation has particularly frustrated potential shoppers and City leaders who were looking forward to the recently completed store. Inside, everything seems to be ready for operation.

Cash registers are in place.

The deli counter is finished.

The shelves are standing and the aisles are marked with numbers and directories.

On the City side, all of the electrical, building and plumbing inspections are nearly completed – with an occupancy permit likely only days away from being granted.

However, there are no workers inside, no product on the shelves and no inventory in the storeroom.

“Obviously we’re disappointed, but we recognize that the issues surrounding the delay in Market Basket opening are clearly beyond our control,” said Mayor Rizzo on Tuesday. “I’m confident they will resolve their internal issues, and when they do, Market Basket will become a great addition to our commercial tax base and a great alternative for our residents to do their weekly grocery shopping.”

Ward 6 Councillor Charlie Patch, who represents the area, said the delay was a big disappointment for his constituents. He said the store is so anticipated he gets more calls about the Market Basket opening at Northgate than he does about the casino proposal at Suffolk Downs.

“I just hope they come to their senses and settle this because I have gotten more calls on this than I’ve gotten about anything else in the past six years,” he said. “People are so happy it’s opening. Every day people call and want to know when it’s opening. They heard July and then August and now September. Now that they’re ready to go, the store isn’t opening. I only hope they can settle the problems, smarten up and do what’s right for the people of Revere.”

Another store under construction in Waltham has also been delayed, and it had an expected opening of next spring.

The let-down for Revere food shoppers comes via a very public battle between rivaling factions of the Demoulas family and the company’s Board of Directors – a fight that has gone on for many years, but resurfaced publicly earlier this summer.

It is a fight that features the two ‘King Arthurs’ of the company.

Current CEO Arthur T. Demoulas has taken an approach to running the company that his father, ‘Mike’ Demoulas, took, which entails emphasizing lower prices, generous employee profit sharing programs, and limiting debt/expansion to maintain some of the highest profit margins in the supermarket industry.

His approach has been criticized and attacked by his cousin, Arthur S. Demoulas – whose father was also a co-founder of the company.

Arthur S. has accused his cousin, and the company CEO, of making improper business deals with relatives and of being too conservative in the company’s expansion. There has also been discussion surrounding employee profit sharing versus dividends to Board members.

Employees vehemently support Arthur T. and are very worried about the profit sharing plan that doled out some $43 million last year – a key element in the company’s ability to retain employees. A petition from employees and shoppers has gathered thousands of signatures this summer, with a recent online push for more signatures in support of Arthur T.

The company has always been very close to the vest in its operations and it’s sharing of public information – not even having a website and hesitant to give out e-mail addresses or phone numbers of company officials. However, late last week the Tewksbury-based company CEO, Arthur T., engaged in an interview with the Lowell Sun and stated that the company would forever change if he were removed.

“Not any of them know the culture of this business here,” he told the Sun, and called the Thursday vote “a predetermined assault.”

“I’m concerned for the organization and its people,” he told the Sun. “If they remove me, what kind of message is that to the company?”

On the other hand, those supporting Arthur S. have told the Sun – for the same article – that Board members leaning their way have notable business experience. Their expertise, it is believed, could help re-direct the company.

The Board is made up of seven members and it is believed that Arthur S. has the required number of votes to remove his cousin, Arthur T. However, that has been said before, and the saga will likely drag on longer than any care to believe.

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