Major Retailers Planning for After-Hurricane Sales

Few retailers have in place plans as firm as these retailers do for when a storm hits.

Like its competitors — Wal-Mart and Lowe’s — Home Depot’s corporate eye was squarely on Hurricane Sandy a week ago, when the company’s supply-chain managers and merchants began preparing for the advancing storm by moving high-demand goods like generators from stores outside the storm’s path — California and Texas — to stores and distribution centers in its path.

The search also began for more vendors that could supply goods that would be heavily in demand, like plywood and bleach, by storm-struck customers from the Carolinas to Maine.

“We’re attempting to find goods anywhere and everywhere and move them toward New York and New Jersey. We’re making phone calls, and finding anything we can get our hands on to get them to people in the area,” said Doug Spiron, the company’s emergency response captain.

While meeting the needs of customers is a strong motivator, there is no denying that there is money to be made in a catastrophic storm’s advance and aftermath. Late fall is generally quiet for home supply retailers, but bad weather can increase sales.

Last year, for instance, Home Depot’s revenue jumped as a result of preparation and response to Hurricane Irene.

Several analysts said that both Lowe’s and Home Depot received a financial boost from Hurricane Irene.

Some 441 Home Depot locations from North Carolina to Bangor, Me., are expected to be in areas that will sustain storm-force winds, Mr. Spiron said. And those stores need to be ready for the onslaught of customers whose numbers are bound to rise.

As of 5 p.m. Monday, 55 of Home Depot’s 2,200 stores — those directly in the storm’s path — were closed. The company expected to reopen them as soon as possible. “As we close, those days are going to be tough — that’s a big hole when you’re not ringing cash registers,” Mr. Spiron said. Once the storm passes, though, “there’s a lot of business being done. It’s a big deal in terms of the amount of goods we’re going to move through.”

Wal-Mart Stores, the nation’s largest retailer, has been operating disaster distribution centers since 2001 that are always stocked with basics like water, propane and ready-to-eat meals, the company said. As a specific disaster approaches, Wal-Mart moves in other supplies, like mosquito repellent for a Gulf Coast incident, said Dianna Gee, a spokeswoman.

Starting last Tuesday, Wal-Mart moved Hurricane Sandy-related supplies like blankets, shovels and generators to its 10 disaster distribution centers, Ms. Gee said.

A spokeswoman for Lowe’s, Stacey C. Lentz, said the company sent more than 400 truckloads of generators and water to stores in the last four days, and more than 200 truckloads of emergency supplies to regional distribution centers. Four distribution centers near the storm’s path were still taking deliveries on Monday.

Ms. Lentz said that products needed for storm preparation, like water, extension cords and utility pumps, were selling well in the Northeast, as were snow-related products like ice melt and snow shovels.

As soon as the worst of the hurricane passes, Lowe’s and Home Depot are poised to send employees from stores outside the storm zone to help out in those inside it.

“Local staff may not be able to get back in,” Mr. Spiron said, but the company “will bus in associates from different areas of the country and put them up in a hotel.”

On Friday, about 350 people from Home Depot moved into a command center at its Atlanta headquarters, four fourth-floor conference rooms outfitted with TVs tuned to the Weather Channel and local newscasts and provided with Internet and phone lines. Representatives from truck companies joined supply chain executives to find “every truck they can get their hands on. Some stuff like plywood goes on a flatbed, stuff like ice you end up with a refrigerated truck,” Mr. Spiron said.

Before the storm, Home Depot tried to get items like water, batteries, flashlights and plywood needed for boarding up windows into stores, Mr. Spiron said — “all the things you know the customer’s going to want in quantities before the storm hits.”

At the same time, he said, the company has to plan for the aftermath. “After the storm’s moved through, you’ve got flooding, water damage, trees are down, ” he said. Then, customers want things like kerosene heaters, cleanup supplies and bleach, and the company has been moving those goods east, to stores when possible and to distribution centers. Once Home Depot assesses the damage in each location — from power failures to flooding to roof damage — it can further narrow down what supplies to send where.

Home Depot had a similar response in place for Hurricane Irene, Mr. Spiron said, but “this one has the potential to go way beyond that.”

Article source: http://www.nytimes.com/2012/10/30/business/major-retailers-planning-for-after-hurricane-sales.html?partner=rss&emc=rss