Secret Ingredients
CHECK OUT GROCERY STORE JOB POSTINGS and you’ll see “deli clerk” as a frequent recurrence. They’re tough jobs to fill, or to keep filled, for most chains (and the grocery industry as a whole ranks among the top for turnover rates). It’s one of the lowest paid of grocery jobs (second only to cashiers), and the post can be grueling: long, take-a-number lines, razor-sharp slicing machines, and repetitive work with logs of processed meats and cheeses. It would depress the most earnest of laborers. Typically.
But Joanne Preveneau is different. She’s done it for 30 years and wants to do it as long as she can. In the final hours of her Sunday shift and a long weekend of work, the 61-year-old with a head full of bouncy curls was still going, happy to stop and talk with customers, even when it meant taking 20 minutes away from the work she had to get finished: unloading the pizza cart.
The deli veteran from Salem, New Hampshire, is the cheerful, devoted employee any savvy CEO would want on the front lines. She’s talented in other ways, too, an in-demand floral designer by night considering a venture into real estate in four years when she retires from a 35-year career handling meats and cheeses. Thanks to a sizeable pension, she can follow her dreams.
But she can’t quite picture leaving her employer altogether, even then. “I still plan to work here part-time,” she says, “but I’m looking forward to trying other things, getting more into crafting and maybe rental properties.” She doesn’t need to stay on as a part-timer; she just wants to. The grocery chain provided her security through the years, as she raised a son and cared for an ailing husband, and the company’s leaders reward her decades of dedication with multiple bonuses a year, competitive pay, and a well-padded profit-sharing program, one that probably would dwarf the lifetime savings of workers at any other grocery store, anywhere.
The profit-sharing plan, launched in the ‘60s, is one way the chain–Market Basket–has distinguished itself. It’s still a company that upholds its stated values: People before profit. The company has kept prices low enough to save customers, including vulnerable low-income populations, around $1,500 annually over nearby competitors, according to one comparison. It pays employees better than industry standards and hires from within, compensating some managers with six-figure salaries. Despite those investments, and perhaps because of them, it nets around $4 billion in revenues a year, so the profits are there to share.
The result? A worker like Preveneau with three decades of service under her belt might have a nest egg of more than $200,000. That’s a stockpile that never required a single penny from the individual stocker or clerk - in a post that, at other stores, might garner something around minimum wage and come with few or no benefits. “We get a letter with our bonuses that says it’s because of ‘your commitment to our company that we can give you this,’” Preveneau says, beaming in her gray deli worker lab coat. She says it’s the company’s CEO who carries on his family’s tradition of allowing employees to benefit from the stores’ success. “We work hard, but he gives back. He does everything possible to compensate us for how hard we work.”
That’s a typical employee experience at Market Basket. The boss who gives back, of course, is Arthur T. Demoulas, named among the “most popular CEOs of all time” and the man whose character inspired protests and that unprecedented, non-union work stoppage across three New England states.
But Demoulas, or Artie T., as employees call him, also has gone to more dramatic lengths to protect a people-first tradition. In the wake of the 2008 financial crisis, for example, he ensured the company made up for the profit-sharing plan’s loss—to the tune of around $46 million. He had the courage to stand up to a board looking for profits and say that $46 million of the company’s dollars should be re-routed to protect employees.
So when a shakeup among company board members jeopardized her boss’s job in 2014, Preveneau worried what might happen without him and under the direction of Artie T.’s rival and cousin, Arthur S. Demoulas, a man she says she’s never seen in person before. Those were uncertain times, when the helpful, transparent leadership she was accustomed to seemed to vanish in one swift decision. Artie T. represented safety; anyone else put that security at risk. “All of a sudden, we didn’t know what was going to happen.”
So she did something about it. She came to work early so she could take breaks to make it down the street to join protesters who were chanting and waving signs along the roadside. She did that for six weeks, eventually working in a virtually empty store mending uniforms because there was little else to do. She wasn’t alone in her activism. Shoppers had stopped shopping.
Perishables had to be sent to area food banks because they were sitting on shelves as customers boycotted the grocer, to the point of crippling the chain. At the boycott’s peak, the company was losing around $75 million a week as shoppers, who saw low prices and secure jobs for their friends and neighbors as a reflection of Artie T.’s ethical practices, made their stand, even when it hurt. They chose to pay more elsewhere rather than betray the man whose values, to them, represented Market Basket’s promise: Grocery business second, people business first.
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MEDIA CHOPPERS SPUN IN LOW CIRCLES, a constant hum in blue sky. Affectionate cheering was reluctantly stifled as Arthur T. Demoulas began his first public address since he was fired and rehired. In a stiff-shouldered gray suit coat and striped tie, what hair he had remaining combed neatly on the sides, Artie T. looked the part of an executive when he climbed to the press conference podium. But with the spirited speech of a victor and not-so-subtle New England accent, he sounded more like a fired up Rocky Balboa. They’d fought bravely. And they’d won.
It was the first official thank you to the grocery store workers and vendors who’d risked their jobs and businesses to save his. He wasn’t some guy down on his luck, either. He was a multimillionaire, recently reinstated as CEO thanks to their efforts. After a year of escalating protests and international media attention on the New England grocery chain, Artie T. was back at the helm at Market Basket.
When he told them he loved them, the cheering started again in earnest. He told them they were heaven on earth. He praised the power of their values, their enduring human spirit, and their shared, solid moral compass. He said they showed that respect, honor, and dignity are their way of life. They had taught the rest of the world, through newspaper quotes and TV clips and academic analysis, how to be good neighbors again.
The hoots and whistles and chants—“Artie T.!”—drowned out his final words of gratitude. The standoff, a culmination of board member disputes that pit Artie T. against his cousin Arthur S. Demoulas, was over. The boss was back. But the academic and business worlds would spend years trying to piece together some kind of formula for the loyalty Arthur T. Demoulas and the “We Are Market Basket” movement inspired in 2013 and 2014.
It truly was a grassroots movement, and it hadn’t come without sacrifices. What had started as a handful of associates gathering, upset over the removal of the company’s CEO quickly multiplied—through social media and news outlets and word of mouth—into something much more, a widening show of solidarity across three states and sixty communities. Warehouse, clerical, and managerial employees stood side-by-side to oppose Demoulas’s removal, some of them walking away from their jobs. Following the lead of the disgruntled employees, vendors halted deliveries and customers chose to shop elsewhere, even though many of them scarcely could afford to do so. It meant less food on the table, less money in the bank and, for vendors and suppliers, loss of income for their own family businesses. These appeared to be extreme, self-sacrificing steps taken for a person who had far less at stake than those employees, customers, or vendors.
Non-union employees risked their jobs to band together with the deft organization and determination of labor unions in what became an unprecedented work stoppage. Media outlets followed the story, eventually working to track every step of the process, recording in detail impassioned speeches made from the backs of pickup trucks to growing numbers of crowds.
Their collective voices rose together in a tenor, not unlike a fight against unfair labor, the mistreatment of animals, environmental outrages, or mass layoffs. But the battle, this time, wasn’t against those more conventional catalysts. It was the little guy fighting to save the big guy, low-income workers and shoppers standing up for an affluent executive. Customers, employees, vendors, suppliers, board members, and residents of the stores’ communities had to choose sides. They decided whom they would follow, whose name and title was worth advocating for, to the extent of risking their jobs, their businesses, their finances, their reputations. They had to decide who they were loyal to. Why did they choose him
MIT made a 16-chapter case study of the ordeal and outlined 11 core management principles Mr. Demoulas employed—plus a host of other contributors that encompass the company’s business model. A professor at Boston University called the Market Basket story a case study for the ages. The U.S. Labor Secretary told the employees that the nation was proud of them.
Two documentaries highlight the emotion-soaked dramas that unfolded among managers and employees, the power of good people who decided to fight the good fight. The literature that proliferated in the aftermath of the six-week protest and Artie T.’s reinstatement do similar work: painting the employees in a noble light, no doubt influenced by Arthur T. Demoulas’ insistence that the praise belongs with the people. These were neighbors helping neighbors, the kind of actions we think we don’t see as often as we once did, a life-affirming glimpse of how caring people can be.
But, in the clutter of explanations and the scramble to discover how others can instill what Market Basket does, most of the amateur and professional analysts got it wrong. Even Artie T., in his humility, missed the point when he lifted his people up as self-sacrificing. The truth is, their reaction wasn’t as much about who those good neighbors were, as it was about what they needed.
There was a formula that affected the outcome, but it wasn’t a product of an MBA program or a savvy new HR initiative. It wasn’t new at all. It was an old formula, one that predates graduate schools, corporations, and even society. It was nature at work.
Summary
The Market Basket Way: Nurturing Employee Loyalty Through People-First Leadership
Market Basket’s success story is a testament to the power of people-first leadership. Under Arthur T. Demoulas, the company cultivated a culture of loyalty and dedication among its employees, leading to an unprecedented grassroots movement when his leadership was threatened. Employees, vendors, and customers rallied together, risking their livelihoods to support a leader who had always put their well-being first. This tale of commitment and collective action highlights the importance of ethical leadership in fostering loyalty and driving sustainable business growth. Organizations today can learn from Market Basket’s example, emphasizing the value of investing in people and upholding strong community ties.
“The Market Basket story exemplifies how a company can cultivate deep loyalty and resilience by prioritizing people over profits. Arthur T. Demoulas’ leadership, characterized by a steadfast commitment to employee well-being and community values, showcases the profound impact of ethical leadership. For modern organizations, this serves as a powerful reminder that investing in people not only fosters a positive workplace culture but also drives long-term business success.”
Keywords: ethical leadership, employee loyalty, people-first leadership, Market Basket case study, Arthur T. Demoulas, business ethics, employee engagement, organizational culture, leadership lessons, profit-sharing programs.