Retail Disaster Planning: Learning Lessons from the 2005 Hurricanes

Two national companies learn about contingency responses in the wake of Hurricane Katrina


Putting a trailer online wasn't as simple as putting cash in the register. This particular drugstore chain runs its IT system via satellite connectivity, so it had to treat the trailers as though they were new store locations and put up satellites to get the system up and running again.

Over at the Mattress Firm, Rita forced the company to completely revise its contingency plans. The corporate headquarters in Houston also houses the company's servers, which are crucial for the real-time POS information necessary to run the business effectively.

The CFO and directors of operations, sales, IT and LP contemplated the chance that the storm could knock out all connectivity. They formulated a back-up plan to implement manual sales and daily inventory at every location so that business interruption would be minimized. They also decided that the executive staff would temporarily relocate to the Dallas regional office if they could not work out of Houston.

Lessons Learned

What the drugstore company took from its experiences with the recent natural disasters was the reinforcement of an idea they held before the storms: that the employees come first.

"Make sure you take care of your employees," says the national drugstore chain's LP director. "Know where they are and that they're safe. The employees and the customers come before the business."

Mattress Firm, likewise, learned lessons from Katrina that it applied to Rita and then again Wilma. The company, which had four stores in the New Orleans area, recognized that a contingency plan to protect employees and assets must take into account the worst-case scenario.

As a result, Edwards says, "The lines of communication were way more open after Katrina, and we had a better plan."

By the time Wilma threatened the Florida locations, Mattress Firm executives could do the planning almost by rote. They conferenced by phone to fine-tune their strategies for coping with the storm and issued evacuation plans.

Looking Forward

Mattress Firm is now expanding its planning to encompass tactics for dealing with a man-made disaster, should something like 9/11 affect its stores. Edwards says that if the business prepares for the worst-case scenario, everyone will know what to do, even if the situation is minor.

"Making the plan is the most important part," he says. "You have to make sure everyone is on the same page and that they all agree with the contingency plan."

He adds that after recognizing the magnitude of the threat that a disaster can pose to the chain's lifeblood-its POS system-he has developed a new appreciation for the IT side of the business.

"I've never really been interested in the IT side," Edwards admits. "But it has become very important on my list of things to learn as the director of LP."

About the author: Liz Martinez is the author of "The Retail Manager's Guide to Crime and Loss Prevention: Protecting Your Business from Theft, Fraud and Violence" (2004, Looseleaf Law), and is a retail security/loss prevention consultant and an instructor at Interboro Institute in New York City. Liz can be reached through her website at www.retailmanagersguide.com or via email at liz@retailmanagersguide.com.