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Demoulas Super Markets: Growing Despite Squabbles

July 15, 2013

Athansios “Arthur” Demoulas and his wife Efrosine opened a “mom and pop” grocery store in Lowell, Massachusetts in 1917. These Greek-Americans had a specialty in their store which was fresh lamb, processed at a slaughterhouse behind their home. The store managed to survive during the Great Depression even though they allowed customers to buy on credit during those hard times. Their business was almost foreclosed as a consequence but they managed to pull through.

Two of their children Mike and George were also involved in the business. The two bought the business from their parents in 1954. What followed was a period of great expansion for the business.

The brothers were very close and promised to look after each other’s family if one of them lived longer than the other. The business would also be divided equally between the two families.  George unexpectedly died in 1971. Mike continued to run the business until the side of George’s family brought lawsuits starting in 1990 alleging that Mike was defrauding them of their share of the business transferring it to another store chain named Market Basket which was only owned by Mike.

It is estimated the lawyers earn a good deal of money for the lawsuits that were filed and tried in court. One law firm was said to have earned $13 million. Even the clerk of court was lured to job interviews in different places with the sole intention of seeing if the judge was biased to a contesting party.

After a long and costly battle the heirs of George Demoulas was awarded 51 percent of the company. Today through the Market Basket chain, Demoulas Supermarkets operates around 70 grocery stores in Massachusetts and New Hampshire. It had revenue of $3.5 billion in 2011 and continues to grow.

It’s not the only thing continuing though, now the heirs of Mike have been trying to oust CEO Arthur Demoulas son of George Demoulas through board room maneuverings.

 

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