Big retailers plan for hurricane season with military precision

Dwayne Hobbs loads pallets of spring water at a Publix warehouse in Lakeland. Publix is stockpiling about 25 million bottles in nine warehouses.

LARA CERRI | Times

Dwayne Hobbs loads pallets of spring water at a Publix warehouse in Lakeland. Publix is stockpiling about 25 million bottles in nine warehouses.

Florida's mass retailers treat hurricane readiness with the logistical precision of a military operation.

The biggest — including Home Depot, Wal-Mart and Publix — even have their own war rooms.

With the start of hurricane season, the retailers are well into a massive inventory buildup to meet demand that instantly triples for water, nonperishable foods, flashlights, beer (but not wine) and drive-through fast food when a big storm is coming.

Each Wal-Mart Supercenter gets an extra three trucks of hurricane-related supplies to stockpile in a back room until its needed, then replenished daily. Home Depot is poised to triple the half-inch plywood stock in stores and has 80 truckloads of hurricane goods waiting to be deployed to trouble spots. Publix Super Markets Inc. built its inventory of store label spring water to around 25 million bottles in nine warehouses, as well as enough nonperishable foods, lamp oil, candles, pet food and yes, even deli fried chicken, to keep up with demand that spikes at the first hurricane alert.

This year, big Florida retailers will try some new tactics. Far more supermarkets, discount stores and gas stations employ generators to keep stores open in power outages and speed recovery. Home Depot will try out its new 600,000-square-foot rapid deployment center in Valdosta, Ga. Wal-Mart will send disaster vans to damaged stores that offer satellite feeds for card transactions, inventory tracking and live video to decisionmakers in Bentonville, Ark. The vans even restore cell and wi-fi service.

"Today hurricane readiness has become a true competitive edge for retailers that can demonstrate their superior logistics to shoppers," said Neil Z. Stern, principal with McMillan & Dolittle, a Chicago retail think tank. "What can be more powerful than being the first store to open after a disaster, a place to rely on in times of most need? If you can open when a competitor isn't, people remember for years."

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Florida retailer interest in hurricane performance started with Home Depot in 1992, when it was accused of price-gouging in the plywood-buying panic before Hurricane Andrew. In fact, customers had cleaned out all the chain's of cheap plywood, leaving stragglers to pay triple for what was left: cabinet-quality plywood.

Today, Home Depot's planning has shifted to a global disaster war room in Atlanta. That enables executives to make and communicate decisions to the field in seconds, stockpile hurricane-related goods at strategically located warehouses, dispatch them just before a storm is forecast to hit, then divert shipments en route to stores in greatest need.

The precision often allows retailers to be up and running before government aid arrives.

In 2005, New Orleans civic leaders compared the arrival of relief supplies on convoys of Wal-Mart trucks to the cavalry coming to their rescue days before the federal government got there. They also lauded Winn-Dixie as the first grocer to reopen in the flooded city.

"We had stores reopen — at least the ones not underwater — even before we could get to them from outside," said Shawn Sloan, vice president of operations for Jacksonville-based Winn-Dixie.

During the busy 2004 hurricane season, Florida's state emergency planners realized they should start tracking what retail chains do during storm recovery. Part of it was to avoid the embarrassment of handing out free water, ice and food in storm-ravaged areas in parking lots at Publix stores that were already up and running in Punta Gorda and Miami.

"Depending on the severity of the storm, we could not pull it off without the job done by the retailers," said Chuck Hagan, chief of logistics for the Florida Department of Emergency Management, which keeps enough food and water on hand at its new statewide distribution center in Orlando to handle 1.6 million people for one day. It all heads to the front lines where stores cannot open.

"Since Katrina, there has been a sea change among government agencies to make what retailers do part of their overall emergency plan," said Brian Koon, director of emergency management at Wal-Mart in Bentonville, Ark. "Now we finally have a seat at the table. Retailers get merchandise to customers every day. It's only logical we're best at it in times of need."

Ask retailers why they go to the expense and they say the same thing: It's not to sell more.

"It's good business, and it's about being there for the customer," said Shannon Patten, spokeswoman for Publix.

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Retailer disaster planning even touched off an arms race in Florida's hurricane alley. Witness the proliferation of generators among retailers.

Home Depots in the path of the 2004 hurricanes remained up and running during long, widespread power outages, thanks to massive generators at each store. Publix spent $175 million installing permanent generators powerful enough to run 647 of the 700 Florida stores for days. Winn-Dixie made the same upgrade at 80 of its coastal Florida stores and plans to do the rest of its 520 stores by 2014. Wal-Mart positions dozens of mobile generators at the edge of storm warning areas for deployment and has standing deals to rent more. It is weighing installing permanent ones.

About 1,400 gas stations near evacuation routes in populated areas are now wired for mobile generators to pump gas if the power fails, thanks to a state law passed in 2007.

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Even with all the planning, retailers must be nimble as storms approach.

Relatively mild Tropical Storm Fay, in 2008, gave stores fits as it made landfall four times in Florida and caused widespread flooding. It was the first storm ever to affect every Winn-Dixie in Florida.

Retailers not only must respond to demands of hard-hit locations, but move supplies where displaced evacuees go.

"We had to transfer the same goods to different parts of the state two or three times to stay ahead of Fay," said David Hawkins, Home Depot vice president for Florida.

Nature also complicates the best laid recovery plans. Wal-Mart owns the nation's biggest truck fleet, but it does not move if winds top 40 miles per hour. Roads become impassable, and there is no reason to open stores in evacuated areas. Gas stations may have generators, but they cannot get more gas if storms close Florida ports.

Last year Gustav hit Galveston and Houston with ferocity.

"We knew what Gustav would do to Houston, but never expected it would make us deal with the worst power outage in Kentucky history, too," said Wal-Mart's Koon. "We deal with volcanoes, blizzards and earthquakes, but our biggest challenge is hurricanes."

Mark Albright can be reached at albright@sptimes.com or (727) 893-8252.

Big retailers plan for hurricane season with military precision 06/05/09 [Last modified: Friday, June 5, 2009 7:23pm]

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