As a follow up to the previous grocery insight, the Market Basket conflict has finally come to an end with Arthur T purchasing Arthur S’s 50.5 percent of the shares for $1.5 billion. As a result of the six week conflict, the company lost millions of dollars daily and the store went from being local shopper’s go-to store to a store that was empty. It was a protest that was not only unexpected, but grew to have thousands of supporters on a national level. The Save Market Basket Facebook page alone has 90,838 likes and the protests that were held often had more than 5,000 attendees. I don’t think anyone could be happier about Arthur T’s return to power than the employees that almost sacrificed their jobs. On their Facebook page they wrote,

“We Are Market Basket and WE ARE BACK!!….. Tonight we raise a glass to Artie T and each other as we have achieved the most improbable of upsets. Tomorrow we go to work and never, in the history of people going to work, will so many people be so happy to punch the clock…. Please understand that we will be working around the clock to get every department in every store back   up to speed and once we do, we will be better than ever!”

Demonstrations like this are not common in the United States for any cause, especially for a grocery store. If the ice bucket challenge isn’t a good enough reminder, this proves that when enough people believe in a cause, and have social media to help spread the word, amazing things can be accomplished.

What will be interesting to see in the upcoming months is how Market Basket plans on turning its profits around. Sure, people believed in the cause and protested, but will the customers that simply didn’t want to shop at an empty store return? So far an influx of people, new and old have returned to shop. This is partially because loyal shoppers are excited to return to their favorite store, and partially because other people are curious want to see what all the fuss was about. While stores are packed now, it will be interesting to see if the customer rate will remain high. Market Basket has always boasted its low prices, and customers never questioned it. The problem is that now customers that would have never had a second thought about shopping anywhere else have had to shop at other low priced stores and have discovered that some stores have even lower prices. Arthur T has announced that 2-6 stores will be opening within the next year, depending on the success rate. The company acquired millions of dollars of debt, not just from the six weeks of protests, but also the debt obtained to acquire the company. It will be interesting to see what else Arthur T has up his sleeve in order to make Market Basket profitable again.

According to the Chain Store Guide’s 2014 Grocery Industry Market Share Report, there are a total of 570 grocery stores in the Boston CBSA alone. These stores include low cost and discount retailers such as Walmart and Costco, and supermarkets such as Trader Joe’s and Shaw’s Star Market. There is no question that these stores, and the others in the area, have profited from the six weeks of extra customers and will have tried to make a good impression to keep many of them coming back. Before the protests Market Basket controlled 21.6% of the grocery market, the highest percentage of any chain, the second being Stop & Shop with 21.3%, and the third being Shaw’s Star Market with 12.1%.

It is without question a great thing that the customers and employees got what they wanted and Arthur T regained control of the company. Now we just have to wait and see what Market Basket does to turn itself around and if it can remain in control of the market. If nothing else, it is a great example for all owners of grocery stores to see what to do or not to do when running a company, and shows employees the real power they have.

Boston CBSA Market Share of Top Grocery Stores

CBSA: Boston-Cambridge-Newton, MA-NH
Counties:Essex, Middlesex, Norfolk, Plymouth, Suffolk – MA; Rockingham, Strafford – NH

*Source: Chain Store Guide 2014 Grocery Industry Market Share Report