WEBVTT 1 00:00:00.520 --> 00:00:06.919 It's nice side with WBS video all right. 2 00:00:07.200 --> 00:00:11.119 I think all of us of a certain vintage will 3 00:00:11.160 --> 00:00:16.039 well remember the big battle over market Basket. The future 4 00:00:16.120 --> 00:00:20.120 of market Basket, I think the best grocery chain in 5 00:00:20.199 --> 00:00:22.920 New England. That's a point of view. 6 00:00:22.960 --> 00:00:23.519 I think that we have. 7 00:00:23.600 --> 00:00:25.839 We're blessed with some really good grocery change. I think 8 00:00:26.440 --> 00:00:32.039 Roach Brothers great local chain. I'm not as enamored with 9 00:00:32.200 --> 00:00:38.560 the chains from that are owned by big corporate interests 10 00:00:39.079 --> 00:00:41.920 from around the country, and I think most of you 11 00:00:42.000 --> 00:00:44.960 know that, But for me, it's Market Basket and Roach Brothers. 12 00:00:44.960 --> 00:00:47.920 In market Basket certainly, I think is the odds on 13 00:00:48.000 --> 00:00:49.920 favorite of most of my listeners. But it was ten 14 00:00:50.000 --> 00:00:53.159 years ago when the Market Basket broke out into a 15 00:00:53.200 --> 00:00:55.679 civil war between a couple of cousins who were fighting 16 00:00:55.679 --> 00:00:59.960 for support of Market Basket, and it was pretty dramatic. 17 00:01:00.159 --> 00:01:02.880 I mean, it wasn't, as I said earlier, the Hatfields 18 00:01:02.960 --> 00:01:05.680 versus the McCoy's. It was a demulus against the Demulis 19 00:01:06.159 --> 00:01:14.560 and the membership, the employees, the customer base. They all 20 00:01:14.640 --> 00:01:19.359 sided with the ultimate winner, Arthur Demulis. 21 00:01:20.519 --> 00:01:23.560 But it was a struggle. 22 00:01:23.560 --> 00:01:28.680 And we're delighted to be joined tonight by professor at 23 00:01:28.719 --> 00:01:31.359 the MIT School Sloan of Management, which is one of 24 00:01:31.400 --> 00:01:36.120 the great business schools in the country, Professor Thomas Cocon 25 00:01:36.879 --> 00:01:39.120 And again, I'm trying as best I can to give 26 00:01:39.159 --> 00:01:42.040 you but the proper pronunciation of that name. And if 27 00:01:42.040 --> 00:01:46.159 I'm getting anywhere close, let me know. Okay, how are you, Professor? 28 00:01:47.599 --> 00:01:50.239 I'm good, Dan, And if my mother was still with us, 29 00:01:50.239 --> 00:01:51.560 she'd be proud of you. 30 00:01:51.560 --> 00:01:56.159 You got it right, Thank you. You did. You did 31 00:01:56.200 --> 00:01:57.439 a thesis on this. 32 00:01:57.599 --> 00:02:00.159 You authored a case study, if you will, not on 33 00:02:00.200 --> 00:02:02.799 a thesis, but your co author a case study about 34 00:02:03.040 --> 00:02:06.239 the protests. Were you in the area at the time. 35 00:02:06.280 --> 00:02:08.759 Did you watch it unfold or is there something that 36 00:02:08.840 --> 00:02:15.319 you came to after the event this pitched battle in 37 00:02:15.360 --> 00:02:17.159 the summer of twenty fourteen. 38 00:02:18.319 --> 00:02:22.039 Oh, we were in the area. And in fact, if 39 00:02:22.080 --> 00:02:25.439 you ask my wife about it, what did we do 40 00:02:25.520 --> 00:02:28.759 in the summer of twenty fourteen, she'll just roll her 41 00:02:28.759 --> 00:02:33.280 eyes and say market basket. It wasn't her favorite experience, 42 00:02:33.360 --> 00:02:37.319 but it took up very much of our summer, and 43 00:02:39.000 --> 00:02:45.280 rightfully so, because there was such a unique, unprecedented event 44 00:02:45.439 --> 00:02:49.960 and development, and so interesting from the standpoint of someone 45 00:02:50.159 --> 00:02:56.039 like me who studied labor management relations since the nineteen 46 00:02:56.080 --> 00:02:58.680 seventies when I first started in this field, and this 47 00:02:58.759 --> 00:03:06.240 was something I had never encountered. A group of managers, executives, clerks, 48 00:03:06.240 --> 00:03:11.400 warehouse workers, truck drivers all walking out together in a 49 00:03:11.439 --> 00:03:15.439 non union setting. Uh. I had to think a lot 50 00:03:15.479 --> 00:03:18.719 about how to how to interpret this at the beginning 51 00:03:19.199 --> 00:03:21.879 and whether this, uh, whether this could. 52 00:03:21.800 --> 00:03:28.759 Last now it unfolded before your eyes. The business school, generally, 53 00:03:29.680 --> 00:03:32.240 I don't I don't think you have classes during the summer. 54 00:03:32.280 --> 00:03:35.639 I think it's a fall, winter, spring, and normally you 55 00:03:35.680 --> 00:03:38.919 get a chance to relax during the summer. When did 56 00:03:38.960 --> 00:03:42.199 you when did this first? Were you aware of this 57 00:03:42.319 --> 00:03:46.560 and attentive to it as it was bubbling up? And 58 00:03:46.680 --> 00:03:49.759 the fight, the the proxy fight that was going on 59 00:03:49.919 --> 00:03:54.759 in June which led to the to the to the nastiness. 60 00:03:54.159 --> 00:03:56.520 Of late June and July. 61 00:03:58.159 --> 00:04:01.599 Well, actually I didn't know anything about it until I 62 00:04:01.639 --> 00:04:07.280 got a call from an NPR reporter asking me what 63 00:04:07.400 --> 00:04:09.520 do I think about this? And I said about what, 64 00:04:10.080 --> 00:04:12.319 we have a nice little place up here in New 65 00:04:12.319 --> 00:04:15.879 Hampshire on a nice little lake, and I was, you know, 66 00:04:15.960 --> 00:04:19.399 minding my own business here and not paying attention to 67 00:04:19.399 --> 00:04:22.560 too many events. But this would have been about three 68 00:04:22.639 --> 00:04:27.000 days into it, and this reporter said, well, you better, 69 00:04:27.199 --> 00:04:29.800 you better check this out because I think you'll find 70 00:04:29.800 --> 00:04:31.560 it interesting. And then I want to call you back, 71 00:04:32.160 --> 00:04:34.600 and so I did. And so I was about three 72 00:04:34.680 --> 00:04:38.480 days into it when I first encountered it, and once 73 00:04:38.560 --> 00:04:43.040 I started to learn about what was happening and why 74 00:04:43.079 --> 00:04:48.839 it was unfolding, I just got absorbed by it. And 75 00:04:48.839 --> 00:04:52.399 then you know, once, as Dan as you know, once 76 00:04:52.560 --> 00:04:58.279 you speak to a media professional in one setting, whether 77 00:04:58.319 --> 00:05:04.160 it's radio or uh the print or TV, it it 78 00:05:04.600 --> 00:05:08.720 sort of multiplies and you you get more calls. And 79 00:05:08.879 --> 00:05:14.800 so that's where it starts. And were deeper into. 80 00:05:14.600 --> 00:05:17.639 It, I could say that you were sort of like 81 00:05:17.720 --> 00:05:25.720 those green flies professor from Sloan from Sloan talk to us, all, 82 00:05:25.879 --> 00:05:26.639 so let's. 83 00:05:26.399 --> 00:05:26.959 Get up there. 84 00:05:28.360 --> 00:05:31.879 Yeah, now it it had so I got a lot 85 00:05:31.879 --> 00:05:36.600 of media calls. But then as it unfolded, Uh, you know, 86 00:05:36.680 --> 00:05:40.759 I do mediation of labor management disputes, and I have 87 00:05:40.879 --> 00:05:44.079 a lot of experience with that, and I kept thinking, 88 00:05:45.279 --> 00:05:48.199 you a rule number one of a mediator is you 89 00:05:48.240 --> 00:05:53.319 don't intervene. You get asked by the parties to help them, 90 00:05:53.360 --> 00:05:56.319 so you don't butt in. And I was determined not 91 00:05:56.439 --> 00:06:01.120 to butt into anybody's business if I wasn't asked. But 92 00:06:01.240 --> 00:06:06.319 then I started to get discreet calls from some of 93 00:06:06.360 --> 00:06:11.879 the parties and from from others who asked, you know, 94 00:06:11.959 --> 00:06:16.360 what I thought, and how could we get get this resolved? 95 00:06:16.439 --> 00:06:19.000 And so then I started to do a little bit 96 00:06:19.040 --> 00:06:23.839 more work behind the scenes to try to understand it 97 00:06:24.040 --> 00:06:28.560 in more depth and to see how to interpret it. 98 00:06:28.600 --> 00:06:33.600 And then I wrote various pieces, one for the Boston Globe, 99 00:06:34.839 --> 00:06:36.920 actually two, I think it was for the Globe, and 100 00:06:37.240 --> 00:06:42.240 for Cognizanti the National Public Radio, you know, w b 101 00:06:42.360 --> 00:06:49.079 u R print outlet and and other things. 102 00:06:49.160 --> 00:06:52.240 And so they steal all they steal all those fancy 103 00:06:52.360 --> 00:06:54.040 Latin words like cogniscanti. 104 00:06:54.920 --> 00:06:59.519 Yeah, yeah, yeah, yeah, I'll give you a quarter if 105 00:06:59.560 --> 00:07:00.519 you can, right. 106 00:07:01.399 --> 00:07:04.160 I think I could Latin school. I taught me how 107 00:07:04.160 --> 00:07:05.839 to spell Latin words. But that's okay. 108 00:07:05.839 --> 00:07:07.959 Well, so you never. 109 00:07:08.000 --> 00:07:12.160 Entered as an arbitration or as a mediat or anything 110 00:07:12.240 --> 00:07:14.959 like that, but you began to do your homework and 111 00:07:15.000 --> 00:07:19.480 you eventually ended up co authoring a book about this. 112 00:07:20.439 --> 00:07:26.240 It's a case study. Yeah, and at one point I 113 00:07:26.319 --> 00:07:32.720 did write a piece for the Globe editorial page. This 114 00:07:32.959 --> 00:07:38.399 was about maybe three weeks into it, outlining what I 115 00:07:38.480 --> 00:07:42.040 felt needed to happen to get this resolve successfully. And 116 00:07:42.079 --> 00:07:46.120 you could see the the you know, the contours of 117 00:07:46.160 --> 00:07:49.000 what had to happen. The customers weren't going to come 118 00:07:49.040 --> 00:07:52.680 back unless the employees were going to come back. The 119 00:07:52.720 --> 00:07:57.199 employees weren't going to come back unless Arthur T came back. 120 00:07:57.680 --> 00:08:02.439 Arthur T wasn't going to get back unless there was 121 00:08:02.439 --> 00:08:06.199 some kind of a deal for him to have equity 122 00:08:06.279 --> 00:08:09.560 and take over the business. And that could have been 123 00:08:09.560 --> 00:08:12.319 done in a variety of different ways. So it was 124 00:08:12.560 --> 00:08:17.519 it was fairly straightforward to lay that out and and 125 00:08:17.560 --> 00:08:21.040 that's eventually essentially what happened is obviously is you know, 126 00:08:21.920 --> 00:08:27.480 eventually the board relented and sold the business to Arthur T. 127 00:08:28.759 --> 00:08:32.200 But it took a while for that process to play 128 00:08:32.200 --> 00:08:37.440 itself out. And meanwhile, what was so remarkable was that 129 00:08:37.559 --> 00:08:45.000 these employees held together for six weeks. And they held 130 00:08:45.039 --> 00:08:52.039 together largely because they all knew each other. But in addition, 131 00:08:52.159 --> 00:08:55.360 the most important development of this case was it was 132 00:08:55.360 --> 00:08:59.440 the customers. The customers were the source of power that 133 00:09:01.320 --> 00:09:07.039 kept the employees out there and support it at least psychologically. 134 00:09:07.720 --> 00:09:12.720 And finally it was the customers who brought the board 135 00:09:12.840 --> 00:09:16.039 to realize it's the only way we're going to resolve 136 00:09:16.120 --> 00:09:19.679 this is to put Arthur T back in charge in 137 00:09:19.720 --> 00:09:20.440 some fashion. 138 00:09:22.320 --> 00:09:27.519 What that's such a quick and brilliant analysis of how 139 00:09:27.559 --> 00:09:31.159 it actually came to be resolved. I got to take 140 00:09:31.159 --> 00:09:34.519 a break. I want to talk now about how this 141 00:09:34.639 --> 00:09:38.360 company has come back as a result of that six 142 00:09:38.440 --> 00:09:40.080 week into a little There was a lot of debt 143 00:09:40.559 --> 00:09:43.960 that piled up, and we to talk about that. Were 144 00:09:43.960 --> 00:09:46.720 the company is today as where it was ten years ago? 145 00:09:47.080 --> 00:09:50.879 And maybe we'll take some phone calls if you're going 146 00:09:50.960 --> 00:09:52.759 to stay with us until nine thirty. If a couple 147 00:09:52.799 --> 00:09:56.600 of folks would like to talk to a business Sloan 148 00:09:56.840 --> 00:09:58.480 Business School professor at MIT. 149 00:09:58.720 --> 00:10:00.799 They don't get any smarter than than these folks. 150 00:10:01.080 --> 00:10:05.200 Six one seven, four ten thirty, six one seven, nine thirty. 151 00:10:05.240 --> 00:10:06.120 My name is Dan Ray. 152 00:10:06.519 --> 00:10:10.480 After nine thirty, we'll talk about market Basket and we'll 153 00:10:10.519 --> 00:10:12.879 talk about your experience and were you one of those 154 00:10:12.919 --> 00:10:16.120 customers who stayed away? Were you one of those employees? 155 00:10:16.480 --> 00:10:19.919 But right now you can talk with Professor Thomas Cocan 156 00:10:20.519 --> 00:10:25.000 of MIT's Sloan Business School, which is one of the 157 00:10:25.039 --> 00:10:27.919 greatest business schools in the world, as well of course. 158 00:10:27.679 --> 00:10:30.559 As the country. Back on Night's Side right after these messages. 159 00:10:31.240 --> 00:10:34.399 Now back to Dan Ray live from the Window World 160 00:10:34.519 --> 00:10:37.679 Night Side Studios on WBZ News Radio. 161 00:10:38.279 --> 00:10:42.200 We're talking with Sloan Business School professor and MIT professor 162 00:10:42.240 --> 00:10:46.679 Thomas Colcan, and you had this was confusing because it 163 00:10:46.759 --> 00:10:51.399 was an interfamilial feud between two cousins. Arthur T was 164 00:10:52.240 --> 00:10:56.279 the the Demula's cousin that had all the support. Was 165 00:10:56.320 --> 00:10:59.639 that Arthur s was the other side of the aisle, 166 00:10:59.759 --> 00:11:01.320 as it were in this case. 167 00:11:02.440 --> 00:11:03.960 Yes, that's right, that's right. 168 00:11:04.120 --> 00:11:09.440 So what had Arthur T done to have won that 169 00:11:09.799 --> 00:11:14.720 such support not only of his workers, his non union workers, 170 00:11:14.759 --> 00:11:16.080 but also of his customers. 171 00:11:17.480 --> 00:11:21.080 Well, this is another really important to mention to the 172 00:11:21.159 --> 00:11:23.919 story and to the lessons to learn from it, and 173 00:11:23.960 --> 00:11:27.919 that is that Arthur T, over the course of many years, 174 00:11:28.000 --> 00:11:33.960 had demonstrated his commitment to really being responsive to his 175 00:11:34.120 --> 00:11:38.600 employees and his customers, concerned about them on a personal level, 176 00:11:38.960 --> 00:11:43.360 certainly on a professional level, to retain employees. As you know, 177 00:11:43.519 --> 00:11:47.440 when you shop at market Basket, it will each employee 178 00:11:47.480 --> 00:11:53.480 will have a little uh signet, little piece of his 179 00:11:53.679 --> 00:11:56.320 or her uniform that says, I'm Sue, I've been here 180 00:11:56.440 --> 00:11:58.960 twenty seven years or ten years or six months for 181 00:11:59.080 --> 00:12:04.799 that month. And you know, he valued employees and he 182 00:12:04.879 --> 00:12:08.679 knew that employees were key to providing high quality service 183 00:12:09.240 --> 00:12:12.080 to customers, and he held them accountable for doing that. 184 00:12:12.480 --> 00:12:15.559 But he supported them in times of crisis. The stories 185 00:12:15.559 --> 00:12:20.759 that I heard from various people who contacted me during 186 00:12:20.799 --> 00:12:24.559 that period of time about, you know, the things he 187 00:12:25.080 --> 00:12:28.120 did to support people when they lost the loved one 188 00:12:28.240 --> 00:12:31.960 or in a car accident, needed a child, needed a 189 00:12:32.120 --> 00:12:35.799 special care, and he called the parents and said do 190 00:12:35.840 --> 00:12:39.720 we need to move this child to Boston to one 191 00:12:39.759 --> 00:12:42.519 of the hospitals. He didn't say do you need to move? 192 00:12:42.600 --> 00:12:46.000 He said do we need to do it? And that's 193 00:12:46.120 --> 00:12:52.759 just one example of his leadership. And so he ran 194 00:12:52.879 --> 00:12:56.639 the company and was actively involved and worked his way 195 00:12:56.720 --> 00:13:01.080 up over the years from all the different jobs in 196 00:13:01.120 --> 00:13:05.759 the store to the CEO's role. Arthur s really was 197 00:13:05.879 --> 00:13:10.679 interested only for financial reasons. As the story goes, he 198 00:13:10.720 --> 00:13:13.080 worked a little bit there when he was a teenager, 199 00:13:13.679 --> 00:13:19.279 wasn't particularly committed and and really was only interested in 200 00:13:19.360 --> 00:13:23.480 the returns that the business was provided. So that's that's 201 00:13:23.559 --> 00:13:26.559 the basis, UH for the difference. 202 00:13:27.240 --> 00:13:32.840 My producer, excuse my producer told me that during this, uh, 203 00:13:32.919 --> 00:13:37.200 this six week period, and I'm relying upon my producer 204 00:13:37.320 --> 00:13:40.120 has a pretty good memory. He said that that that 205 00:13:40.120 --> 00:13:42.679 that Arthur s or that the people who at that 206 00:13:42.799 --> 00:13:46.240 point were holding full they still ran the company. And 207 00:13:46.360 --> 00:13:49.120 Arthur T was on the outside that they ran a 208 00:13:49.200 --> 00:13:53.159 four percent off your bill sale your entire bill as 209 00:13:53.360 --> 00:13:56.200 as an incentive, an inducement to have customers come back. 210 00:13:57.080 --> 00:14:01.440 And and even that offer, uh was not enough to 211 00:14:01.519 --> 00:14:04.840 lure customers back into the store. I'm again, I hope 212 00:14:04.840 --> 00:14:08.399 my producers correct on this, but is that true? 213 00:14:08.519 --> 00:14:10.440 Yeah? That was one that was one of the things 214 00:14:10.519 --> 00:14:15.480 they did. They hired also two new executives to run 215 00:14:15.519 --> 00:14:19.960 the company, experienced in the in the retail sector, not 216 00:14:21.519 --> 00:14:25.759 incompetent people, but they couldn't build the support needed to 217 00:14:25.759 --> 00:14:32.639 get the employees back. And you can offer four percent 218 00:14:32.720 --> 00:14:34.759 off the bill, but if you don't have anything in 219 00:14:34.799 --> 00:14:38.399 the store to sell, that doesn't do any good. And 220 00:14:38.799 --> 00:14:42.320 it was the coalition between the customers and the employees 221 00:14:42.440 --> 00:14:47.600 that allowed them to be out there for that long 222 00:14:47.639 --> 00:14:50.039 and to be successful in the end, and there was 223 00:14:50.120 --> 00:14:55.799 no financial incentive to bring customers back that was going 224 00:14:55.840 --> 00:14:59.000 to work. Those customers said, you know that's my store. 225 00:14:59.200 --> 00:15:02.360 I know those employees. I see them when I go there. 226 00:15:02.399 --> 00:15:05.080 They greet me, and you know, we ask about each 227 00:15:05.120 --> 00:15:09.840 other's family. You can't you can't incentivize your way out 228 00:15:09.919 --> 00:15:12.480 of that that kind of relationship. 229 00:15:13.879 --> 00:15:17.559 This, I bet you you probably have taught a course 230 00:15:17.600 --> 00:15:18.399 on this in MT. 231 00:15:18.799 --> 00:15:23.559 I suspect yes. In fact, we did a symposium one 232 00:15:23.639 --> 00:15:28.720 evening with a group of people and I brought in 233 00:15:29.600 --> 00:15:33.279 four or five of my colleagues from other parts of 234 00:15:33.320 --> 00:15:37.639 the Sloan School and the Kennedy School who specialized in 235 00:15:37.679 --> 00:15:43.279 different things from corporate governance to finance, to marketing and 236 00:15:43.320 --> 00:15:47.559 so on, for them to be on panels and to 237 00:15:47.600 --> 00:15:50.440 ask them what they thought of this. And it was 238 00:15:51.000 --> 00:15:54.519 really interesting because they obviously weren't as familiar, but they 239 00:15:55.679 --> 00:15:59.840 got it and they understood once they read a little 240 00:15:59.840 --> 00:16:03.919 bit about did their preparation for that evening, why this 241 00:16:04.440 --> 00:16:07.759 uh one was very unique and too, why it could 242 00:16:07.759 --> 00:16:10.679 be successful and and Dan, you know what this this 243 00:16:11.000 --> 00:16:14.639 really signified to me and to them, this is the 244 00:16:14.759 --> 00:16:19.759 kind of company that the American public is so thirsty 245 00:16:20.200 --> 00:16:23.840 for a good company, a company that's good to your customers, 246 00:16:23.840 --> 00:16:27.679 that gives fair prices, low prices, high quality, and good 247 00:16:27.720 --> 00:16:31.039 to its employees. And we just don't see enough of 248 00:16:31.080 --> 00:16:33.720 that across the country. And when we see it, or 249 00:16:33.759 --> 00:16:37.639 when the public sees it, they say, boy, that sounds 250 00:16:37.759 --> 00:16:40.600 right to me, and I ought to support that. So 251 00:16:40.639 --> 00:16:42.440 we need we need to learn from that. 252 00:16:43.120 --> 00:16:46.399 Why are companies, other companies not learning from that? 253 00:16:47.440 --> 00:16:52.360 Because they're they're financial institutions and they're they're they're they're 254 00:16:52.799 --> 00:16:57.360 in the maximize shareholder returns, sometimes short term, sometimes long term, 255 00:16:58.080 --> 00:17:03.080 but they're not There's not enough companies that see themselves 256 00:17:03.279 --> 00:17:08.599 as getting a good return by being a very very 257 00:17:08.680 --> 00:17:13.480 good high what we call high road employer. And we 258 00:17:13.559 --> 00:17:16.079 need more of those. We still need them today. I 259 00:17:16.119 --> 00:17:21.680 still teach when I when I write things I draw 260 00:17:21.720 --> 00:17:24.799 on market basket. I was asked to write something just 261 00:17:24.880 --> 00:17:30.240 this week about it, and so it resonates with the 262 00:17:30.240 --> 00:17:33.920 public and when you see it, you know that you 263 00:17:33.960 --> 00:17:34.880 should support it. 264 00:17:35.200 --> 00:17:36.240 Oh yeah. 265 00:17:36.799 --> 00:17:40.920 Sadly, Oftentimes, in my experience, the best companies of the 266 00:17:40.960 --> 00:17:43.519 companies that go out of business, and a lot of 267 00:17:43.519 --> 00:17:44.359 the bad companies. 268 00:17:44.400 --> 00:17:45.200 Hang on, let me. 269 00:17:45.200 --> 00:17:48.240 Grab a quick phone call for you here, so we'll 270 00:17:48.279 --> 00:17:51.519 get one question from our from our another studio audience, 271 00:17:51.559 --> 00:17:54.440 from our audience at large. I'm going to go to Gary, 272 00:17:55.079 --> 00:17:57.799 who checks in from Wuburn. Gary, you're on with Professor 273 00:17:57.839 --> 00:17:58.920 Thomas Kocher. 274 00:17:59.119 --> 00:18:02.839 Go right ahead, Gary, Yes, Professor, I'm sixty one years 275 00:18:02.880 --> 00:18:05.839 of age. I've said this separate story before. I don't 276 00:18:05.880 --> 00:18:07.200 necessarily have a question. 277 00:18:07.039 --> 00:18:08.359 But you probably know about it. 278 00:18:08.599 --> 00:18:11.599 One of the greatest things that Macabasket ever did. This 279 00:18:11.720 --> 00:18:16.240 is going to sound very unusual, Dan, and it's the truth. 280 00:18:16.519 --> 00:18:20.680 They did one month where all the bread was half 281 00:18:20.799 --> 00:18:24.119 price for the whole month of December during the holidays. 282 00:18:24.160 --> 00:18:27.200 Give it take eight years ago, give it take fifteen 283 00:18:27.279 --> 00:18:29.880 years ago. And I jumped all over it because I'm 284 00:18:29.880 --> 00:18:31.680 a single guy. I have all kinds of friends, and 285 00:18:31.720 --> 00:18:34.559 I distributed to all kinds of families. And I'm sure 286 00:18:34.559 --> 00:18:37.440 you know about it. And I was spending one hundred 287 00:18:37.440 --> 00:18:40.359 dollars a week, four dollars for then cut down the 288 00:18:40.440 --> 00:18:42.680 two and I'm very proud of it. I just wanted 289 00:18:42.720 --> 00:18:44.079 to share that story with you guys. 290 00:18:44.359 --> 00:18:47.759 Continue on, Thank you, Okay. 291 00:18:49.119 --> 00:18:50.960 I was going to tell you that they did that. 292 00:18:51.039 --> 00:18:52.359 Did they do that? Professor? 293 00:18:52.440 --> 00:18:55.880 If you know, not news to me, but I wouldn't 294 00:18:55.920 --> 00:18:57.000 be surprised, gotcha? 295 00:18:57.039 --> 00:19:02.680 Okay, okay, Well again, this is the company that is successful, 296 00:19:03.000 --> 00:19:05.279 as I understand that and helped me out if I'm wrong. 297 00:19:05.319 --> 00:19:06.559 Here is Arthur T. 298 00:19:06.599 --> 00:19:09.240 Still at the helm, Yes he is. 299 00:19:10.279 --> 00:19:14.160 And you know the financial deal that he put together 300 00:19:14.839 --> 00:19:20.119 is also worth coming on because my big fear in 301 00:19:20.400 --> 00:19:23.920 this is, yeah, they might sell it to Arthur T, 302 00:19:24.079 --> 00:19:25.880 but he's got to come up with the finance. He he 303 00:19:25.839 --> 00:19:30.400 doesn't have the dollars in his piggy bank, so he's 304 00:19:30.400 --> 00:19:32.559 got to find he's going to have to go into debt. 305 00:19:32.599 --> 00:19:35.640 And my biggest fear is he'd go with some forgive 306 00:19:35.680 --> 00:19:39.680 me for this word, schlock private equity firm that would 307 00:19:39.759 --> 00:19:42.759 be would put all kinds of constraints on him, start 308 00:19:42.839 --> 00:19:45.799 to put pressure on him to pay that money back 309 00:19:45.880 --> 00:19:52.200 quickly and force them to find ways to cut cut costs. 310 00:19:52.559 --> 00:19:56.680 And and there is there was a private equity component 311 00:19:56.720 --> 00:19:59.960 to it. But the brilliance of that deal was the 312 00:20:00.200 --> 00:20:04.440 it was a consortium of banks that did two things. One, 313 00:20:04.640 --> 00:20:09.240 they understood the business model and why market Basket had 314 00:20:09.319 --> 00:20:11.799 been successful. And that it would take a while to 315 00:20:12.200 --> 00:20:16.839 get back. And two, they understood that Arthur t was 316 00:20:16.920 --> 00:20:19.240 the key to the business model, and they let him 317 00:20:19.319 --> 00:20:22.400 run it rather than put him on a short lease 318 00:20:22.880 --> 00:20:29.039 and require very short term returns. He's still not completely 319 00:20:29.079 --> 00:20:32.519 out of debt, but he's ahead of his payment schedule. 320 00:20:32.559 --> 00:20:38.559 He's close to completing that. And it gave him the 321 00:20:38.599 --> 00:20:43.880 time and the control to go back to his same 322 00:20:44.000 --> 00:20:47.920 management style and rebuild trust with his employees and his 323 00:20:47.960 --> 00:20:54.359 customers and keep all the other systems in place. That 324 00:20:54.720 --> 00:20:59.279 was remarkable. And I worried that the deal itself might 325 00:20:59.319 --> 00:21:01.319 be structured a way that would make it hard for 326 00:21:01.400 --> 00:21:04.519 him to do that. Turns out that he was able 327 00:21:04.880 --> 00:21:08.759 to continue the business model and his leadership style in 328 00:21:08.839 --> 00:21:12.160 the same way. And that's that's remarkable. 329 00:21:12.400 --> 00:21:14.160 Mind setting is there's been in a paydown the day 330 00:21:14.200 --> 00:21:17.519 I think the Globe story said, has been substantially paid down, and. 331 00:21:17.440 --> 00:21:25.960 The yeah, it's it's close and and so uh the 332 00:21:26.000 --> 00:21:31.000 business has come back. Uh and you still see you know, 333 00:21:31.400 --> 00:21:35.200 lots of traffic in the stores. You see low prices 334 00:21:35.200 --> 00:21:38.440 for sure, you see the quality of service. They're not 335 00:21:38.599 --> 00:21:42.359 short staff. There's staff there, and staff of all ages 336 00:21:42.559 --> 00:21:48.039 and nice diverse men and women, people of color, as 337 00:21:48.400 --> 00:21:52.279 as well as people who have been there for a 338 00:21:52.279 --> 00:21:54.880 long time, and then some some teenagers. 339 00:21:55.920 --> 00:21:58.200 Yeah, I mean he is, He's done it all and 340 00:21:58.240 --> 00:22:02.000 it's great that someone like yourself recognizes it and maybe 341 00:22:02.039 --> 00:22:05.240 that model can be followed by some other stores. You know, 342 00:22:05.400 --> 00:22:10.160 just real quickly, what drives me crazy about grocery stores now? Now, 343 00:22:10.200 --> 00:22:13.960 in order to get the break, not market basket. Market 344 00:22:14.000 --> 00:22:16.240 Basket you go in and you know you're always going 345 00:22:16.240 --> 00:22:18.400 to get a low price. But there is other stores, 346 00:22:18.440 --> 00:22:22.400 and one in particular is Shaws, which is owned by Albertson. 347 00:22:22.880 --> 00:22:26.880 They're big on digital coupons, so you have to find 348 00:22:26.920 --> 00:22:31.480 the newspaper then download the coupons, not paper coupons. Downlim 349 00:22:31.640 --> 00:22:36.960 digitally to a very confusing website, and half the time 350 00:22:37.000 --> 00:22:40.240 they work, half the time they don't. But it is 351 00:22:41.039 --> 00:22:43.720 so it is one of the most frustrating stores with 352 00:22:43.759 --> 00:22:46.319 which I've ever dealt with in my life. I don't 353 00:22:46.359 --> 00:22:49.720 know if you've done a study on that, but you 354 00:22:49.799 --> 00:22:53.440 may want to look at this as the antithesis to 355 00:22:52.720 --> 00:22:54.519 the success. 356 00:22:54.079 --> 00:22:55.359 Story of market Basket. 357 00:22:55.640 --> 00:22:59.359 Albertson is going to get bought Shaws, and I think 358 00:22:59.640 --> 00:23:01.200 then in my. 359 00:23:01.279 --> 00:23:12.079 Opinion, see that that that's an example of not valuing 360 00:23:12.160 --> 00:23:20.519 your customers. Just think of the let's say elderly uh, grandmother, 361 00:23:20.880 --> 00:23:28.079 widow or man for that's matter, who doesn't have those 362 00:23:28.119 --> 00:23:31.720 digital skills. They're left out of that process or they're 363 00:23:31.759 --> 00:23:37.519 confused by it. If if if they need help while 364 00:23:37.519 --> 00:23:40.559 they're in the store to try to figure out where 365 00:23:41.799 --> 00:23:46.279 the best price for a particular brand of peanut butter 366 00:23:46.400 --> 00:23:50.319 or wherever it is, the store personnel will help them 367 00:23:50.359 --> 00:23:53.200 find that and they don't have to go to their 368 00:23:54.279 --> 00:23:57.839 their phone because they're not prepared to do that. 369 00:23:58.359 --> 00:23:59.559 And so actually got. 370 00:23:59.400 --> 00:24:02.519 To know your in this case, if it's not on 371 00:24:02.559 --> 00:24:04.759 your phone, you won't get the break that's the point. 372 00:24:06.200 --> 00:24:08.640 And so unless you're able to download it to the phone, 373 00:24:08.680 --> 00:24:11.920 which takes some time, and most people are just you're 374 00:24:11.960 --> 00:24:15.559 flum mixed by that. I'm pretty good digitally, but I 375 00:24:15.599 --> 00:24:17.359 finally give up and I just said to myself, you 376 00:24:17.359 --> 00:24:18.920 know what, I'll go to another store and buy what 377 00:24:18.960 --> 00:24:22.839 I want. They're driving customers away, mark my words. You 378 00:24:22.960 --> 00:24:25.640 see problems for Shaws, and you'll see problems for Albertson's, 379 00:24:25.680 --> 00:24:27.640 I promise you. 380 00:24:27.720 --> 00:24:32.440 Yeah, Kroger are about to try to merge. So then 381 00:24:32.480 --> 00:24:33.680 we've got a. 382 00:24:35.440 --> 00:24:38.079 Bigger problem we'll all have. There'd be one grocery store 383 00:24:38.119 --> 00:24:39.039 in America. That is. 384 00:24:39.279 --> 00:24:41.880 That's the downfall of capitalism as far as as far 385 00:24:41.880 --> 00:24:44.480 as I'm concerned, and I'm a big proponent of capitalism, 386 00:24:44.480 --> 00:24:48.279 but not capitalism that is abusive to its customers. Professor, 387 00:24:48.440 --> 00:24:53.319 thank you so much. Professor Thomas Coachin from the Sloan 388 00:24:53.359 --> 00:24:57.119 School at MIT, the Sloane School of Business Management. I 389 00:24:57.200 --> 00:24:59.279 really appreciate you taking the time tonight. I know that 390 00:24:59.319 --> 00:24:59.720 you're moving. 391 00:25:00.000 --> 00:25:03.240 Thank you, Dan. I really enjoyed it, and let's hope 392 00:25:03.240 --> 00:25:07.839 we can have more market basket like companies grow and 393 00:25:08.079 --> 00:25:09.440 thrive in the United States. 394 00:25:09.559 --> 00:25:13.319 I drive sometimes when i'm back home, fifteen miles just 395 00:25:13.440 --> 00:25:16.799 to go there and experience the atmosphere. I know I'll 396 00:25:16.799 --> 00:25:19.240 save a few bucks, but it's much more open, much 397 00:25:19.240 --> 00:25:22.160 better lit the aisles or wider all. It's just a 398 00:25:22.240 --> 00:25:25.480 much more positive experience. Thanks again, Professor. I look forward 399 00:25:25.480 --> 00:25:27.119 to talking to you again. Thank you so much. 400 00:25:27.720 --> 00:25:30.200 Good Thanks Dan, taking welcome all right. 401 00:25:30.240 --> 00:25:34.200