Market Basket Ends 4% Discount

In January 2014, Demoulas Supermarkets Inc.'s Market Basket chain rolled out a flat 4 percent discount on customers' grocery bills to reward its loyal customers. The program came to end, as scheduled, on Dec. 27, but according to published reports, some shoppers at the New England grocer aren’t too happy about it.

Director of Operations David McLean explained to The Boston Globe that an extension of the popular initiative "wouldn't have been tenable," given rising wholesale prices and the debt incurred by the company after a tumultuous, money-hemorrhaging year in which CEO Arthur T. Demoulas was ousted in a family power struggle and then reinstated after demonstrations of support by associates and customers. Demoulas' subsequent purchase of the 50.5 percent of the company he didn’t own, giving him 100 percent ownership of Market Basket, was completed in December.

McLean admitted to the newspaper that with these factors in play, prices at Market Basket could go up beyond the rise occasioned by the end of the discount program, although the chain would try to absorb them.

As for the shoppers who are dissatisfied that the across-the-board savings have stopped, the e-newsletter "Coupons in the News" noted: "That was the risk Market Basket faced, by offering such a long-standing discount to begin with. After a whole year, many shoppers became so accustomed to their 4 percent savings, that ending the discount essentially amounts to a 4 percent price hike."

At press time, Market Basket had not responded to PG's request for comment.