A major local vendor says it has canceled its business with Market Basket after several issues receiving payments from the embattled grocery chain’s current management.
Many vendors have struggled in light of the ongoing conflict that has slowed business to a near halt at Market Basket. But seafood vendor Boston Sword & Tuna has received payments to cover some of its losses on seafood sales during the dispute.
According to CEO Tim Malley, Boston Sword & Tuna provides Market Basket with 30,000 pounds of salmon per week, as well as upwards of 25,000 pounds of other seafood items. The company has done business with Market Basket for about 10 years, he says.
The sale and stocking at Market Basket of perishable items (including seafood) have been affected since July 18, when employee protests resulted in the slowing and stoppage of many deliveries. The effect of that action on vendors has been previously reported by The Boston Globe.
Malley says payments from Market Basket to Boston Sword & Tuna have been erratic since then, at one point falling behind by two weeks. That prompted the vendor to send a letter threatening legal action. A quick response from co-CEO Felicia Thornton followed, and attempted to reassure the vendor.
The missed payment was not the “final straw,” according to Malley.
On Friday, Market Basket sent an overpayment of more than $400,000 to Boston Sword & Tuna. It was the receipt of that check that Malley says made him question the direction of the company’s current management.
Malley told Boston.com in a statement:
There could only be two answers to these accumulating mistakes and self-destructive strategies. One was that the CEOs were way over their heads. How many mistakes like this were being made? How would the shareholders from either side of the feuding family feel knowing that mistakes of this magnitude were being made? The only other explanation seemed to be a deliberate attempt to sabotage the future of the company.
Malley says Friday’s overpayment was the second such instance under co-CEOs Thornton and James Gooch, though the first time they were only overpaid by $88,000.
Malley told Boston.com that despite his recent concerns, he wanted to give current management a chance. He says the co-CEOs have been professional and respectful, but thinks they were “dealt a bad hand” by the Market Basket board of directors. But the recent actions and the summer’s worker and customer protests related to the firing of former CEO Arthur T. Demoulas have caused him and his business partner to take their business to other grocery chains.
“Going public with these facts has been a very difficult decision for us. We have enjoyed a business relationship with Market Basket, its former owners and buyers, which many in business never get to experience,” Malley told Boston.com in his statement. “We think the time has nearly run out for saving this great institution and all those who depend on it.”
Michael Scola, Malley’s partner and the president of Boston Sword & Tuna, shares the same concerns about the company’s current leadership. “Their strategies are failing and only the return of the former management team would save the company,” he said.
A Market Basket spokesperson offered the following comment in response to the decision by Boston Sword & Tuna to pull its business:
Market Basket's leadership has been working directly with Michael Scola to find a solution that works for his company, Boston Sword and Tuna. We do understand the problems that the shutdown of the warehouse and distribution system have caused Market Basket vendors, Mr. Scola and countless others who are caught in the middle of this situation.
The spokesperson released a second statement later in the day, placing the blame for vendor issues on employees who walked off the job.
When a distribution network set up over decades is shut down in one day it is naive to assume any company would not suffer. The longtime employees that ran Market Basket's buying and distribution system walked out on their jobs, their customers and their vendors on July 18. That is precisely the reason Market Basket's stores have had only limited perishable items in stock since. We do understand the problems that the shutdown of the distribution system has caused Market Basket's vendors who are caught in the middle of this situation. We have been diligently working with vendors to limit the damage the walkout has caused.