Whole Foods Rebuilds, Publix Prepares

Discussion
Mar 16, 2006
George Anderson

By George Anderson


Six weeks after announcing the reopening of a store in New Orleans, Whole Foods Market is ready for the grand reopening of another Louisiana location damaged by Hurricane Katrina.


The natural foods grocer said it is reopening it 50,000-square-foot store in the Big Easy suburb of Metairie. The company reopened its 30,000-square-foot unit in New Orleans’ uptown section on Feb. 1.


In other hurricane related news from earlier in the week, Publix announced it was investing $100 million to have backup generators installed at each of its Florida locations by 2007.


“This is something our communities are asking for,” said Bill Fauerbach, vice president of retail operations for Publix’s Miami division. “Publix being open for business after a hurricane is often the first sign that things are getting back to normal in our community.”


Publix said it lost more than $60 million in food that had to be thrown away after a series of hurricanes hit Florida in 2004. The company has not yet tallied its 2005 losses due to hurricane damage, although it did say it had to dispose of more than 1,200 truckloads of food after Hurricane Wilma. That figure, reports the Miami Herald, was the largest single loss from any storm in the company’s history. 


Moderator’s Comment: How is the retail community in affected areas progressing in coming back from the hurricanes
of 2005? What lessons have been learned to minimize the impact of future natural disasters?

George Anderson – Moderator

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9 Comments on "Whole Foods Rebuilds, Publix Prepares"


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Len Lewis
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Len Lewis
14 years 11 months ago

The first thing is proper preparation. How many retailers — regardless of geography — have a disaster preparedness manual and a designated disaster team at the company which meets regularly to update it. Don’t let it collect dust on someone’s bookshelf!

Then, start doing “what if” scenarios. The military has been doing it for years. I think a disciplined military approach to disaster preparedness is essential.

David Livingston
Guest
14 years 11 months ago

Some natural disasters have such great magnitude that it is impossible to prepare for. In New Orleans, looting probably did more damage than the hurricane. Unless you can hire the National Guard to park in front of your store, there isn’t much a retailer can do.

All the retailers I have been dealing with in the area are reporting fantastic sales increases. Even Winn-Dixie is getting a shot in the arm. With a shift in the population and the destruction of many competitors, those who survived are getting a big windfall.

Bernice Hurst
Guest
14 years 11 months ago

I read recently that some stores are re-opening in different areas, citing shifting demographics as their reason and pointing out that they would be offering increased employment opportunities. If this is so, it possibly makes sense but the other reports appearing in UK papers and on the BBC indicate that there are certain areas being neglected in spite of former residents’ preferences. Obviously I understand retailers wanting to go where they think the money is but it does raise questions, in my mind at least, about cause and effect.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
14 years 11 months ago

Get a grip. It wasn’t looting, David, and it wasn’t lack of military-style preparedness, Len. Hurricane-hit supermarkets were most affected by broken windows, aisles doubling as wading pools, absent or deceased employees, and lack of electricity. The chains gambled – like all other businesses, residents, and Homeland Security – and lost. In the future they can: 1.) Install bullet-proof glass, 2.) Hook up waterproof, remote-controlled generators, 3.) Build all stores on stilts and, 4.) Financially support all levee-improvement programs.

Or, get out of town.

Where’s the mystery here?

Craig Sundstrom
Guest
14 years 11 months ago

I’d have to agree with Michael – more or less: for a large, national chain, disaster losses can be rationalized/insured just like any other cost of doing business; and I don’t think it’s even a matter of “gambling” and losing, it’s just a question of whether the prevention costs more than the expected losses ( $100 million of generators vs. $60 million in lost food [???])

For local/regional chains, and even more for a single-location business, the issue is more complex: how much money – if any – do you divert from day-to-day operations and improvements to prepare for something that may or may not happen: you might come out ahead of your competitor if disaster hits – indeed, they may not even survive – or you may go out of business spending for something that never materializes.

Jerry Gelsomino
Guest
14 years 11 months ago

I’m not sure what we can learn from these natural disasters. Some things you can’t prepare for. The storms were so devastating that few systems could have withstood the strain. However, I do believe every business should have a disaster plan just in case. How will we keep running even though your headquarters is destroyed; regular employees can’t get to the store; shipments stopped? As is often the case, the companies that are the most honest with customers, and do everything the can to help, survive the best and the longest.

One concern, however, as it relates to the crimes that were committed in the areas of question – I hope the same thing that LA experienced after the last riots won’t re-occur in Louisiana. At that time, retailers refused to re-open in those areas which were hit by looters, arsonists, etc., until the Mayor and Governor stepped in to force them to re-open. The honest citizens in the neighborhood don’t deserve that.

Jim ODonnell
Guest
Jim ODonnell
14 years 11 months ago

Unfortunately, most companies only react to a crisis rather than spend a little time and money on “Emergency Preparedness”. Our company markets Satellite Phone systems so we have some first hand experience with many companies short-sightedness with preparing for a crisis. Typically, satellite phone are the only means of communication when cell towers are either down or overloaded. The telecom managers in these companies understand this, but are unable to convince the senior management team to invest in sat phones today, so they can have them readily available in a crisis. They usually wait until a hurricane is imminent to try and do a short term rental. By then, it is too late because no phones are available, and the ones that are available can’t be shipped to the disaster area until many days later. As a result, business disruption occurs and much revenue is lost! A little strategic planning today, along with a small investment can facilitate “Business Continuance” during an emergency.

Mark Lilien
Guest
14 years 11 months ago
Every location in the world has environmental risks. Earthquakes, tornadoes, floods, hurricanes, blizzards, droughts, fires are all anticipated in their respective areas. Even though the schedule isn’t known precisely in advance, the incidents have all happened before, and are all expected to repeat from time to time. Lack of planning is inexcusable. Years ago, I built a huge warehouse on an earthquake fault. We used the best expert we could find who knew how to design earthquake tolerant buildings. We equipped the building with earthquake tolerant racks and equipment. We created a beautiful pool and fountain that doubled as our fire tank. We installed standby generators and pumps. We bought the right insurance policies. In short, the problem was recognized and dealt with without waiting for proof of the inevitable. No supermarket chain should be surprised that power becomes unreliable during extreme weather conditions. No one living on a flood plain should be shocked when the flood arrives. It isn’t a surprise when the blizzard comes to New York City. These things happened before and… Read more »
John Lansdale
Guest
John Lansdale
14 years 11 months ago

Location dependent businesses such as retailers should always be considering the re-building problem. What portion of their asset base is in goods vs location (customers and employees) vs construction vs stored knowledge good-sill, etc.? Assets don’t just sit; they age.

The re-building investment should be the same as the original.

Of course many assets will already exist, but others may not. For example, it’s not likely the exact same customers, with the exact same financial situation and desire for your businesses product, will rebuild where they did before.

Thinking about New Orleans this way makes one realize how unimportant inventory and its protection are when compared to a positive community attitude.

In the press of time, most businesses forget their original purpose and consider disaster an insurance/security matter – something to throw a little cost at. Takes a real disaster to make them think.

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