The Market Basket Saga - Corporate Communications a Failure of Both Sides
One of the major news stories in New England over the past few weeks has been the saga surrounding regional supermarket chain, Market Basket. A bitter family feud over control of the company has led to the firing of the company’s president; non-unionized employees protesting that firing, encouraging customers to shop elsewhere and in some cases, skipping work altogether; aisles void of food and products in Market Baskets all over New England; previously loyal customers refusing to shop at Market Basket and taping their receipts from other supermarkets on Market Basket store windows; and Market Basket losing millions of dollars per day.
Pundits and journalists both regionally and nationally have been focused on this corporate and family battle where employees have placed themselves in the middle.
I’ve seen a number of articles talking about the situation as a case study on business management. Pundit after pundit and journalist after journalist has offered their opinion on how to resolve the situation and who’s right and who’s wrong. I’m not going to go down that path. Instead I’m going to focus on the angle I find more interesting, and one that has been underreported by the media - the corporate communications activities of Market Basket.
I’m not talking about PR tactics, though it’s clear to everyone who is winning the battle of public perception in this ordeal. I’m talking about corporate communications and planning, which we’re now seeing was a failure of the company both before recent happenings and after this drama began. Market Basket as an organization was shockingly unprepared for communicating with the public, the press or its employees.
In order to tell that story though, I first must bring you up to speed.
A Tale of Two Arthurs
There are countless articles available that provide a historical look into Market Basket and the decades of warring among the family which owns it, so I won’t go deep into that; however, a condensed overview of the situation is helpful for understanding the current events.
In 1917, Arthur Demoulas and his wife, Efrasine, opened a grocery store in Lowell, MA. Two of their six children, George and Telemachus, purchased the business from their parents in 1954. Seventeen years later, George died suddenly. At that time, Telemachus took control of the business, though George’s children felt they should get their father’s share and have a hand in managing the grocery chain. This started the family war.
Over the last 20+ years, the families of George and Telemachus have been fighting for control of Market Basket. This struggle has large been led by two cousins - Arthur S. (George’s son) and Arthur T. (Telemachus’ son).
The Arthur S. side of the family holds 49.5% of the company, while the Arthur T. side holds 50.5%. But the company has a Board of Directors that includes a number of family members, as well as three non-family members. In 2008, a board member on the Arthur S. side of the family “switched sides” and voted with Arthur T., which allowed him to win a board election and become president of the company.
In 2013, that same family member switched voting sides again, giving Arthur S. and his family control of the board. Then earlier this year, Arthur S. and the board fired Arthur T., replacing him with two co-CEOs, James Gooch (previously president and CEO of Radio Shack) and Felicia Thornton (a former executive at grocery chains Albertson’s and Kroger).
This is when the employees, who are fiercely loyal to their former CEO, Arthur T., began to strike and Market Basket began losing millions of dollars per day. Reportedly, the company's board is considering offers to purchase the company, including one from Arthur T., who offered to return to get the company operating normally again while his bid was considered. That offer was turned down by the board and the company continues to lose money and customers each day, while employees increasingly find themselves in a tough situation, either losing income to decreased hours or fearing they will lose their jobs due to striking or insufficient staffing needs.
The whole drama boils down to a family feud between the families of Arthur S. and Arthur T., with 25,000 Market Basket employees now finding themselves in the middle.
Why Does It Matter?
Every day we hear about corporate fat cats bickering and maneuvering in attempts to obtain more control and more money. So why is this any different?
Market Basket is a unique situation because Arthur T. was so loved by the chain’s employees - all of them, from those in executive and managerial positions down to those working a cash register. He had a personal relationship with his employees and they all knew he was looking out for them. He paid generously, gave significant bonuses and implemented a profit sharing plan for all employees. A number of longtime Market Basket employees filling store operations roles earn six figure salaries.
Happy employees resulted in a store that customers love. Market Basket has lower prices than the other grocery chains in the surrounding area, but they also provide better service.
Customers and employees alike both grew to love Arthur T.
Few retail or grocery analysts could’ve predicted the fallout from the firing of the popular Arthur T.. Workers striking over a fired executive is something that just doesn’t happen. When’s the last time you heard of something like this? This wasn’t a case of workers feeling unfairly compensated or voicing concern over safety conditions - it was solely about a company’s culture.
The employee strikes and media coverage over the past few weeks show that there was a fundamental lack of communications preparedness by Market Basket. The company wasn’t equipped to manage any sort of crisis from a communications standpoint. That lack of preparedness, which is astonishing when you consider how deeply it actually goes, can be attributed to both Arthurs. It falls on the shoulders of Arthur T. because there was no infrastructure for it prior to his firing, and was something Arthur S., Gooch and Thornton inherited - and then did nothing to fix.
After a few weeks of reading all about the Demoulas family struggle over Market Basket and dwindling customers in the stores, I got curious what the company website looked like. Was it business as usual? Was there a special landing page with a letter to customers? Was it being used as another weapon against the ousted Arthur T.?
So I looked it up.
Ok, a dated site, but this looks more like it. As I looked at the site further though, I realized it’s not a site operated by Market Basket. “marketbaskethq.com is a fan based website. WE ARE IN NO WAY AFFILIATED, CONTROLLED BY, SPONSORED BY, OR ENDORSED BY DEMOULAS SUPERMARKETS INC LOGO, OR COMPANY.”
Still a dated site. Odd choice for the domain url, but the official name of Market Basket does contain Demoulas (Demoulas Supermarkets, Inc.). However, I looked further and noticed that this site was also not the official website. “Disclaimer: MyDemoulas.net is not owned, operated, or maintained by DeMoulas Market Basket, Inc.”
Back to Google.
The logo looks different… Ah, that’s because this is a chain in Texas and Louisiana.
My search then moved to Facebook, Twitter and LinkedIn. I found the same results. A number of fan sites or social media properties - and some for ‘other’ Market Baskets, but none for the New England supermarket chain.
How could this be? A 71 location chain without a website? And no Facebook page? No Twitter handle?
I eventually found that the New England Market Basket owns the domain demoulasmarketbasket.com, though if you go to that link now, you’ll see it’s not working (as the Boston Globe reported, “Until recently Market Basket didn’t have an official company website. And the one it created quickly crashed and is not working.”).
A large company with such a poor digital presence in the year 2014 is inexcusable.
It would be easy to pile onto Arthur S. and place the blame for this laughably ridiculous error on him, but that’s not where the blame should go. No, this happened on the watch of Arthur T. The resulting effects didn’t harm him, they actually helped him in this case, but that’s a lucky irony. You could argue that Market Basket’s devout customer base made a company-owned website and digital communication channels unneeded; however, there are a number of situations outside of day-to-day operations where those things could have been necessary under his regime.
That’s not to say that Arthur S. is free of any criticism in the matter. Some of the planning that I’m sure happened prior to firing Arthur T. should’ve included an analysis of the company’s communication channels - including its website and social media properties. It was integral for Market Basket to have avenues for communication outside of the media after Arthur T. was shown the door. They should have known criticism would come and should have also known they needed avenues for disseminating their narrative.
The aftermath of that short-sighted thinking has come to a head for them.
Plan? What Plan?
Speaking of narrative and planning for the firing of Arthur T., it’s becoming clearer and clearer that either there was no planning done by Arthur S. and or it was extremely poor planning.
According to the Boston Globe, Arthur S. is represented by Kekst and Company, a New York company which bills itself as a strategic communications consultancy, while Gooch and Thornton hired Boston based O’Neill & Associates to help Market Basket, a public relations and government relations firm (Arthur T. enlisted the help of Boston based Rasky Baerlein). So it would appear the new Market Basket regime did at least think about planning for PR and communications. So one would have to infer that the planning that was done was simply poorly thought out.
If a president who is universally loved and personally knows most of his employees is being replaced, wouldn’t a top priority of the new regime be going to all the stores in person and talking with employees? If employee fears quickly surfaced that they were worried about company culture, the best way to combat that is to make the new leadership extremely visible to reassure employees the culture is valued and something they will retain. I have heard of only one instance in which Gooch, or Thornton appeared at a Market Basket store to interact with employees.
What I have seen is a lot of statements from Gooch and Thornton given through the media. All have been formal, sterile, lacking any personality or emotion and very reactive in nature. Not the tone new executives in their position want to set.
Maybe Gooch/Thorton/Arthur S. and company forgot that communication doesn’t have to come through the media?... Especially when employees are the main audience with which they should be interacting.
Speaking of lacking emotion, the headshot of Arthur S. supplied to media was a huge oversight.
The guy just ousted his publicly beloved cousin who everyone embraced. This is the first public portrait you give of yourself after that move? The pose and facial expression are all wrong. He should appear inviting and caring. This makes him appear like a detached, self-absorbed corporate suit.
I began wondering if the new Market Basket regime was receiving bad advice from their PR counsel or if they were neglecting the recommendations given to them. It’s impossible to tell, but my questioning led me back to Kekst and Company and O’Neill & Associates. I’ve been in the communications industry for over ten years and had previously never heard of these companies.
I analyzed the firms further and kept two things in mind while doing this analysis:
- The new Market Basket leadership was coming across as tone deaf and unemotional in all public statements.
- Market Basket was severely losing the digital battle to protesters.
Three important findings stood out to me upon review of the two agencies:
- Kekst focuses largely on financial communication - things like bankruptcies, M&A, investor relations, proxy contests and regulation. O’Neill does a lot of lobbying. All are very formal areas with lots of oversight. Not much emotion or empathy.
- Both firms’ websites look like they were designed in the early 2000s. Perception carries a lot of weight in this world, so a dated website could be an indication of the staff’s digital competency.
- Kekst doesn’t offer social media services at all. O’Neill does, though the staff it lists on its Digital Communications and Social Media Management page don’t seem to possess any noteworthy social media or digital marketing experience, at least not enough to warrant a mention in their bios.
Why did I look for the firm’s social media service offerings? Because that’s the new world we live in. And not only was the Arthur S./Gooch/Thornton Market Basket being destroyed in the media, they were also losing the battle online. Social media fan pages were driving the narrative. Pages with Market Basket logos and corporate identity were telling customers to shop elsewhere.
Did Market Basket enlist the wrong help? It’s not appropriate for me to throw around an accusation like that. I don’t know what conversations happened on the inside, but on the outside, it’s a conclusion the public is left to draw. Perception is huge, and Arthur T. is winning the battle of public perception in a landslide. The current Arthur S. led Market Basket team is doing nothing to pull any public support to its side.
Where Does Market Basket Go Now?
That’s a hard question to answer because it’s dependent upon which side of the family comes out on top when this is all over - IF one can ever actually say they won. They could be setting themselves up for a situation where no one wins - not Arthur S., not Arthur T., not Market Basket employees and not Market Basket customers.
However, if we’re to assume this mess works out in a way that prevents Market Basket from going under, there are several things the team left steering the ship should do.
Institute an Employee Relations Program
This is critical if Arthur S./Gooch/Thornton remain in control, but it’s important even if Arthur T. finds himself back in power. A formal communications program for two way dialogue with employees is essential for this company. The employees have all but demanded it. A program like this also helps an organization establish its voice, which will really be needed if this feud is resolved.
Bring on Digital Communications Experts
They can either hire staff or hire an agency, but this is sorely needed. Right now Market Basket has no channels for digital communications with the public. Brands typically worry about losing a narrative. Well, Market Basket never had a narrative. There was never a place to establish one. They need experts to come in and build a website and social media properties that they can consistently manage.
Create a Crisis Communications Plan
You simply can’t plan for all types of crises. There are always surprises. But if you’ve planned for the major ones, you’re in better shape. Having certain scenarios mapped out with response mechanisms, escalation paths and processes to accompany them can help you if an unplanned scenario arises. The thinking is already in place. A football coach once told me, “proper preparation prevents poor performance.” The same applies here. Given how poorly the situation has been handled, I would be shocked to hear that Market Basket had a crisis plan in place prior to this recent string of events.
Implement a Community Relations Program
The most important thing Market Basket needs to do once this ordeal ends is win back customers. Many have left, and depending on how long the Demoulas family feud continues, some may have left for good. It’s hard to win customers back after they’ve left you. Their behavior has already shifted and it’s difficult to change consumer behavior. Something that may have gotten lost in the chaos surrounding this situation is that Market Basket is not listening to its customers, and those customers are speaking loud and clear by avoiding Market Basket. It could be argued that part of their rationale for leaving is lack of product in the Market Basket stores, but remember, many customers left before any food shortages occurred. It’s not just employees striking; it’s customers too.
This post is syndicated from its original publishing on LinkedIn.