Market Basket workers divided about discount program's impact on staffing
Shoppers drive in and out of Market Basket on Elm Street in Manchester at sunset on Tuesday. (/Union Leader)
"The additional 4-percent off promotion is a reward for our loyal customers and an investment towards a long-term growth strategy to attract new customers, increase sales and continue to strengthen and build Market Basket's brand identity," management said in the release.
The Boston Globe editorialized on Jan. 28 that the promotion would amount to $400 in annual savings for a family of four. "At a time when many grocery chains are boosting margins with prepared foods and higher-priced organic brands, Market Basket's concern for the average family is striking," the Globe wrote.
The board has distanced itself from the program, referring all questions to management.
When Susan Miller, a part-time employee at Market Basket in the Nashua area, sent an email to director Ronald G. Weiner, asking how the company was covering the 4-percent discount, he replied, "Management did not consult me or the board prior to announcing the promotion and has not informed us how management plans to cover the costs of the promotion. Please ask management directly."
The discount program may eventually prove to be a "wedge issue," dividing the grocery store rank-and-file that up to now have been united in their support for incumbent management. They have been virtually unanimous in viewing the struggle for control of the company as a clear case of "good guy" (Arthur T. Demoulas) versus "bad guy" (Arthur S. Demoulas).
In letters to the attorneys general in New Hampshire and Massachusetts, and to the Department of Labor in Concord., Miller has pressed the issue as a question of fairness, while acknowledging there is little likelihood of intervention by any federal or state agency.
On the Market Basket social media sites, most posts are in support of management's decision to launch the promotion.
Robert Long, a full-time grocery clerk in Hudson, wrote on Feb. 2, "Taking 4 percent off each customer's order is definitely going to lure more customers in which will result in larger profits down the road. Clearly he (Arthur T.) knows what he is doing. He knows how to keep a business growing.
Creating an advantage
John Dumais, president and CEO of the N.H. Grocers Association, said the Market Basket promotion is just another sign of a highly competitive business that has seen the demise of 12 large grocery stores in New Hampshire in just the past year.
Market Basket, Shaws and Hannaford are all members of the NH Grocers Association.
The average profit margin in the grocery store business for large chains is in the 1-percent range, Dumais said, so not many could cut prices by 4 percent without affecting profit unless there was some cost-cutting elsewhere.
Market Basket may be in a unique position to offer the discount because, unlike many grocers, it has paid cash for new stores, owns and does not lease most of its properties, has a small upper management group and until recently had no debt.
Not all Market Basket employees feel like they are among the winners in the promotion, but Dumais said they are not alone in having hours cut back.
"This is a difficult time of year, so if the sales aren't there, you have to trim your cost any way you can."
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