Why are there businesses? Do their customers and employees matter as much, or is it just to enrich their owners?
All of these groups are significant in the United States, but when resources are limited, stockholders and debtholders are the ones who count the most. (Things are different in Germany; employees have voting rights on corporate boards.)
Creating long-term ties with employees.
According to Kevin Griffin, editor-in-chief of The Griffin Report of Food Marketing, some Market Basket staff have worked with the company for 40 years. This is done by Market Basket through internal promotion, with “once-grocery baggers climbing to top roles.”
And compared to competitors, the corporation pays employees more: According to the Globe, full-time clerk earnings start beyond the minimum wage at $12 per hour, with experienced cashiers earning more than $40,000 annually. Bonuses are given four times a year, totaling up to six to eight weeks of compensation.
Each employee receives a 15 percent contribution from the corporation toward a retirement plan, which had assets of $552 million in 2013. In 2012, Market Basket contributed $43 million, according to the Boston Business Journal.
Get a deal on bulk purchases.
According to Griffin, the company establishes long-term connections with suppliers to ensure it can supply low costs. The Globe highlighted that Market Basket, like many other major retailers, leverages its size to negotiate volume discounts.
Keeping prices low.
Market Basket is known for having affordable costs. “I always questioned how low margin products could vary so much in price from company to company,” consumer Nathan Mudhall wrote in an email to me. He singled out Market Basket’s Land O Lakes Butter pricing, $3.79, as being significantly less than that of other supermarkets. No other market comes close to matching them in terms of pricing, selection, service, and cleanliness.
Special offer to join winwin
Minimizing the overhead.
Employee loyalty over the long term appears to increase productivity. According to the Globe, Market Basket had only six workers working as grocery buyers compared to its competitors, or around one-fifth as many as would be present at a chain of a similar size.
The Globe summarised Griffin’s justification: “By the time they reach senior positions, they have been with the company long enough to be deeply experienced across several levels of the company, meaning they’re able to operate more efficiently from a staffing viewpoint. “The low turnover also lowers the recruiting and training expenses.”
Not being in debt.
Market Basket, in contrast to many supermarket chains, is believed to be debt-free, saving it from having to make regular loan payments and allowing it to turn a profit despite charging low rates.