Big-Box Retailers Spring Into Action
By SHELLY BANJO
Retail chains seized on the selling opportunity created by Sandy this week as consumers with flooded homes and damaged roofs flocked to stores to begin what will likely be weeks of cleanup in the aftermath of the powerful storm.Shoppers lined up at some Home Depot Inc., Wal-Mart Stores Inc. and Lowe's Cos. stores on Wednesday, snagging necessities such as chain saws for clearing fallen trees and sump pumps to remove water or sewage from basements. Demand was particularly strong for generators, which can run as much as $1,500, from hundreds of thousands of people who are expected to remain without power through the weekend and perhaps longer.
Big-box retailers are accustomed to leveraging their transportation and supply-chain networks to respond quickly to natural disasters. They said they were ready after Sandy to serve the swaths of people looking to rebuild their homes and return to everyday life.
Home Depot stationed hundreds of trailer trucks filled with supplies along the storm's path; Wal-Mart's Sam's Club warehouse club unit sent 7,000 generators into Northeast stores. Lowe's said it asked some suppliers to bypass their warehouses and send items directly to stores instead.
Retailers monitored the storm through emergency operations centers at their headquarters last week, using global-positioning systems to reroute storm supplies to thousands of stores along the East Coast.
Even though customers emptied shelves of pre-storm supplies of food, water and generators as the storm set in on Monday, employees worked through the night to get supplies back on the shelves for Tuesday morning.
At Sam's Club, employees from as far as Pittsburgh came to New Jersey stores to get them up and running by 7 a.m. on Tuesday. Still, as of Wednesday about 35 Wal-Mart stores remained closed, from about 300 that had shut down at the storm's peak. Only two stores each remained closed at Lowe's and Home Depot.
Hundreds of people gathered Wednesday at a Sam's Club in Secaucus, N.J., near sites of severe flooding. The store waived its membership requirements and opened to the public.
Years of disaster response means Wal-Mart knows to stock up on Pop-Tarts and muffins, as well as hot rotisserie chicken and pizza. The manager set up tables with power outlets so that people without electricity can charge phones and computers.
"From 10 this morning hasn't been an empty plug or seat over there," said the Sam's Club manager, John Donnelly, pointing to the charging stations.
Thousands of truck drivers, perhaps the most important cog in Wal-Mart's supply chain, spent the past few days crisscrossing the Northeast to get food, water and other supplies from massive distribution centers into super centers.
"We kick into emergency mode," said Wal-Mart driver Rich Appel, 50 years old, who was parked outside of a Wal-Mart in northeast Maryland on Wednesday in the middle of a 14-hour shift. "There's loads of rain, store managers are anxious asking us when their next shipment of water is coming in." "But we know it's up to us to get water and other supplies to the stores and customers as fast as possible."
To speed up delivery, Home Depot this year for the first time pre-loaded trucks of supplies and asked truck drivers to spend the night in rest stops, parking lots, and hotels inside the storm's path.
During last year's storms, it had positioned supplies are warehouses miles away from affected stores.
In addition to power tools, chain saws and tarps, Home Depot manager Tom Wolfe in Garwood, N.J., said gas grills were top-selling items, so people can make hot meals. He said he even delivered a few himself for people who couldn't transport them.
While retailers will enjoy a sales boost from customers stocking up on storm supplies, it will likely be washed away by losses from store closures, as well as from consumers who will shift some holiday spending to storm cleanup, analysts say.
In August 2011, after hurricane Irene hit, sales at stores open at least a year at Home Depot Inc. rose to 5.2% from the same period the year before.
The storm's timing at the end of Wal-Mart Stores Inc.'s fiscal third quarter might also skew sales numbers at the retailer when it reports earnings Nov. 15, pulling pre-storm sales into the third quarter and pushing the impact of post-storm closures in the fourth quarter, said Stifel Nicolaus retail analyst David Schick.
Write to Shelly Banjo at Shelly.Banjo@wsj.com
A version of this article appeared November 1,
2012, on page B8 in the U.S. edition of The Wall Street Journal, with
the headline: Big-Box Retailers Spring Into Action.
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