As news reports continue to emerge in the wake of Hurricane Matthew, it has become evident that the lessons learned from Hurricane Katrina came in handy for retailers and business owners everywhere. This 2005 article examines the response by loss prevention professionals in the aftermath of Hurricane Katrina and serves as an important reminder for retailers to develop their own business continuity and disaster recovery plans.
At the height of the devastation along the U.S. Gulf Coast from Hurricanes Katrina and Rita, Walmart closed 281 facilities. Family Dollar closed 60 stores. Winn-Dixie 125 stores. Dollar General had roughly 500 stores closed without power, damaged, or destroyed.
The ultimate financial, physical, and psychological impact on retailers is difficult to measure. No one has kept accurate count of the total number of stores closed, damaged, or destroyed. Counting small mom-and-pop retailers, the numbers must be in the tens of thousands.
The number of retail employees impacted, whether they evacuated, were displaced, or, unfortunately, lost to the storms, is equally as unknown, but would certainly be in the hundreds of thousands. Walmart alone had 97,000 employees affected.
What did retailers, and loss prevention departments in particular, do in preparation for these disasters? How did we as an industry respond to the events in the hours, days, and weeks following?
Preparing for Disruption
It is no accident that Walmart had a strong, measured response in the aftermath of Katrina. Numerous local and state government and law enforcement officials credit the company with providing the first relief efforts in the devastated region, days before Federal Emergency Management Agency (FEMA) and Red Cross relief operations began.
“Walmart was a lifesaver here in the city of Kenner,” said Phil Capitano, mayor of the New Orleans suburb at the time of the disaster recovery. “They mobilized and brought food and water when others couldn’t or didn’t know how to get through. They provided anything we asked for when FEMA or no other federal or private organization did. We are deeply grateful.” [See sidebar.]
The preparation for Hurricane Katrina began several years prior when Walmart put together a business continuity and disaster recovery organization tasked with responding to events that disrupt their business and put their employees or customers in harm’s way.
Emergency Operations Center. “Because Walmart has such an expansive operation, just about anything that happens somewhere in the world impacts Walmart or our customers in some way,” said Ken Senser, then vice president of global security, aviation, and travel for Walmart.
After 20+ years in government security with the Central Intelligence Agency and Federal Bureau of Investigation, Senser joined Walmart in 2003 to manage home office asset protection, corporate investigations, executive protection, camera and alarm technology, business continuity, and the emergency operations center (EOC).
When Senser joined the company, the EOC had been in place for a short time as a small initiative aimed at responding to natural disasters. In the past two years, the EOC has focused on “global readiness” as a focal point for collecting and assessing information related to potential threats and developing crises.
Located in Walmart’s Bentonville, Arkansas, headquarters, the EOC could be compared to a mini-NASA flight control center. A command desk is at the center of the activity, in charge of coordinating all the business components involved in the disaster recovery and response. Individual desks with phones and computers are manned by representatives of those business units, such as transportation, facilities, product replenishment, human resources, and loss prevention. The desks are surrounded by screens displaying up-to-the-minute information, such as listing of facilities closed, news reports, the weather channel, and maps of the impacted area.
“It can be a busy and dynamic environment when we’re in the midst of a major crisis like Katrina or Rita,” said Senser. “But the fact that we can bring together and co-locate all the necessary pieces to manage through a crisis, gives us better, quicker communication and a more unified vision so that we can implement whatever must be done more effectively.”
Preparations for Katrina. The EOC had been monitoring the tropical depression that became Hurricane Katrina well before it became a threat to the U.S. mainland. When it passed into the Gulf of Mexico and projections were targeting the Gulf Coast region centered around New Orleans, the EOC went into a heightened state of readiness to begin coordinating the company’s disaster recovery preparations.
One of the initial concerns was anticipating the security needs of the stores in the Louisiana, Mississippi, and Alabama region as customers began to react to the increasingly dire predictions broadcast by the media. The task of store security and safety fell on the field loss prevention organization headed by J.P. Suarez, then senior vice president of loss prevention and risk control.
“In the days before Katrina hit, we had a fairly significant contingent of people working to make sure that the stores in the affected area were able to operate safely,” said Suarez. “Tensions were running high. You had people hoarding merchandise, fights breaking out in the gas lines. We needed to make sure our associates and our customers were safe and people weren’t panicking.”
The field loss prevention personnel also provided guidance to the store operations staff as facilities shut down before the storm hit and associates were instructed to evacuate. In-store LP associates were often the last Walmart employees to leave after they “buttoned down” the store to prevent potential wind and water damage. As Katrina came closer to landfall, at the corporate level the EOC went to their third and highest readiness level, with personnel manning the center around the clock. Hundreds of trucks carrying generators and emergency supplies were staged just outside the projected path of the storm.
Preparations by Other Retailers. Other retailers were making similar disaster recovery preparations. Several days before landfall, The Home Depot activated its crisis management command center at its Atlanta Store Support Center staffed by representatives of all company functions and mobilized their hurricane response teams.
According to Mike Lamb, former senior director of loss prevention for The Home Depot stores, each of its 17 regional LP managers appointed a “hurricane LP captain.” This person was supported by four to six crew members to make up regional response teams who are on 24-hour standby as storms approach.
Each team was provided with hurricane kits that include a binder of essential operations information, provisions, and equipment necessary for operating in disaster recovery areas, even including The Home Depot emergency disaster decals that can be displayed on vehicles to identify the team to law enforcement and relief operators.
Jerry Snider, then director of asset protection at Dollar General, knew that securing housing for his response team would be near impossible given the huge evacuations. “We rented two 30-foot RVs,” explained Snider, “so we not only had a place to live, but could go deeper into the affected area because we had the ability to be mobile.” The Home Depot also used recreational vehicles for their teams.
Tim Shipman, former director of loss prevention for Food Lion, a major grocery chain whose stores are based throughout the hurricane-prone southeastern United States, used a software program called Hurritrack to collect tracking and severity data to make decisions about “where we need to stage supplies or generators so we can be in the best position to get our stores up and running afterwards.”
Disaster Recovery in The Aftermath of Katrina
As soon as Katrina’s winds and rain subsided to the point where it was safe to enter the affected areas, loss prevention professionals moved into secure facilities, assess damage, and determine what was needed to reopen stores. Walmart had approximately 120 in-store and regional LP personnel on the ground throughout the three-state disaster recovery area. Some arrived at affected stores within the first few hours after Katrina made landfall. In areas where there was severe flooding, it took several days to arrive on the scene.
“Because we had the flooding, we simply couldn’t get to those facilities and it became an evacuation effort,” said Suarez. “But in those stores that were closed or damaged somewhat, but were still functional, we started the process of getting generators hooked up, cleaning up the inside of the store, securing the facility, and putting together a timeline on when we could open it back up to serve the population.”
The Need for Power. In many instances, the biggest need was power, as electricity was knocked out throughout the region. In Walmart’s case, many of the tractor-trailers staged in the area were huge, mobile generators. The trailers could be backed up to the store and hooked into the electrical system to restore power to the facility.
The Home Depot’s disaster recovery preparations also included a focus on restoring power, since their stores traditionally play an important role in individual and community efforts to repair damage and rebuild after storms. Within a week after Katrina, The Home Depot had reopened all but two of its 33 stores.
In other cases, like with Dollar General, retailers came to the rescue thanks to the networking efforts of the LP executives at the industry’s two leading associations—Rhett Asher, former vice president of retail operations and loss prevention at Retail Industry Leaders Association (RILA) and Joe LaRocca, then vice president of loss prevention at National Retail Federation (NRF).
As it turns out, the automotive parts and service retailer Pep Boys stocks a large number of generators during hurricane season. When the scope of the disaster recovery became apparent and few Pep Boys locations were affected, Sam Rowell went to his buyer group to lobby for price discounts and shipping priority for other retailers. The company agreed.
“We wanted to help the retailers who were hardest hit get their stores powered up to help them with their business recovery so people didn’t lose too much,” said Rowell, vice president of loss prevention at Pep Boys. “So I called Rhett to spread the word that we would ship direct to DCs or wherever it was needed on a Pep Boys truck in order to get them there quickly.”
One of the first calls Asher received was from Dollar General’s Snider who, with 500 stores affected, had a need for generators that even the traditional suppliers, like The Home Depot and Lowe’s, could not satisfy. So, with the help of a fellow LP executive, Snider was able to secure additional generators to assist in the disaster recovery.
Health Concerns. With the flooding came an acute lack of clean drinking water and sanitation. Especially in the New Orleans area, safety and health concerns quickly became paramount. Walmart’s EOC set up a separate security war room to focus on evaluating the security and safety situation on the ground and how best to respond.
To ensure that their employees in the region were protected against possible disease outbreaks, immunization centers were quickly set up in Bentonville and Boutee. The company flew in nurses to man the immunization centers and be available for other health matters given most hospitals and medical clinics were shut down in the area.
Obtaining medicine and filling prescriptions was a significant issue to both those who remained in the impact areas as well as for evacuees. In addition to working to get their stores reopened, CVS/pharmacy loss prevention professionals helped put the company’s mobile pharmacies in strategic locations.
Nancy Berard, a former loss prevention project coordinator at CVS’ Woonsocket, Rhode Island, headquarters, worked the problem of serving the pharmacy needs of the New Orleans evacuees who ended up at the Houston Astrodome. She used her connections to get permission to set up a CVS mobile pharmacy inside the evacuee center. CVS was the only retailer actually inside the Astrodome, where they filled over 20,000 prescriptions at no charge.
Safety and Law Enforcement. Walmart personnel did not respond to looting. “We didn’t want to put our people in jeopardy,” said Suarez, “so we left the looting prevention to law enforcement.” In fact, because of the crisis in New Orleans proper, Walmart did not dispatch loss prevention and risk professionals into the city until after the city was secured by the National Guard.
Throughout the disaster recovery region, the needs of law enforcement were a top priority of Walmart. Even before their stores were open to the public, Walmart’s loss prevention organization kept in close contact with local law enforcement to coordinate efforts and provide support. “We were making sure that law enforcement had whatever they needed–water, supplies, equipment,” said Suarez.
Helping law enforcement was not only the policy voiced by corporate management; local Walmart employees who were cut off from headquarters gave National Guardsmen and local police officers everything from food and clothing to ammunition for their weapons. In Marrero, Louisiana, Walmart employees even let police officers who had lost their homes sleep in the store.
The safety of employees and customers was also a concern of The Home Depot. In their disaster recovery planning, they had negotiated with two national security personnel service providers to pre-determine the costs and logistics for deploying security officers to help secure facilities and ensure safe operations. They also used armed security personnel to escort personnel and merchandise into the devastated areas.
Tracking Down Employees. The evacuation of hundreds of thousands of people both before and after the storm spread retail employees throughout the country. As was widely reported, sometimes family members were separated from loved ones and had no idea where they ended up. Making contact with these displaced individuals became an important disaster recovery goal in the days and weeks after Katrina.
Walmart’s information technology group set up websites and reprogrammed hiring kiosks and other computers in stores to allow displaced employees and customers to post messages and look for family members. The company also gave 150 notebook computers to Red Cross centers for posting messages.
A Walmart employee in Chalmette, Louisiana, who stayed behind while his wife and children left to stay with family, eventually was evacuated to the Dallas Reunion Center evacuee center. His wife went to a local Walmart, where she posted a message for her husband. When he reached Dallas, he accessed the message on one of the laptops.
The company also set up a special call center in Bentonville to give employees another means of contacting the company. In the first month following Katrina, the call center fielded more than 28,000 calls.
“We have a standing promise to the associates who are dislocated from their original stores that if they need work, they can walk into any Walmart in the community that they end up in and we will put them to work,” said Suarez. One Walmart family somehow ended up in Alaska, where the displaced associate walked into a local store and began work that day. Over 600 stores around the country took in displaced employees.
Disaster Recovery Lessons Learned from Katrina
“As we do postmortems on yet another hurricane, we think we’re getting better and better at providing the level of service that our stores truly want,” said Lamb. “Our teams did a phenomenal job of providing support to the total business, whether it was getting a store open or assisting the customers as they came in or packing down products so we were in stock. It really transcended a guy standing at the door to stop a drill from going out.”
A part of Walmart culture is a process they call “correction of errors.” After a major event like Hurricane Katrina, the company debriefs all functions of the company to document specific disaster recovery learnings in order to have a better response in the next event.
“Our correction of errors process helps us actively figure out how we get better,” said Walmart’s Suarez. “Our response to Rita was better because we’ve learned some things even in the few short weeks following Katrina.”
Central Point of Communications. When discussing lessons learned, retailers agree that having a centralized point of communications, like Walmart’s emergency operations center and The Home Depot’s crisis command center, are essential to coordinating the company’s disaster recovery and response efforts.
“By coordinating our efforts through the EOC, our response is better, it’s more coordinated, it’s more efficient, and it’s more effective,” said Suarez.
Even with companies that don’t have a dedicated center with full-time staff like Walmart, designating a corporate response team charged with coordinating the efforts of all parts of the corporation is valuable. The team should be responsible for formalizing the company’s disaster recovery and business continuity plan and periodically practicing the plan using “tabletop exercises.”
By formalizing the plan and involving all operating units of the company, you gain the commitment and buy in from the entire company so different parts of the organization are not working against one another. This is especially important in large organizations with multiple brands.
Sharing Information. Apart from good communications internally, sharing information among companies can make a difference not only for the individual retailers, but the retail industry as a whole. Disaster recovery and business response should not be considered a corporate secret.
Disasters such as Hurricane Katrina or September 11 have a profound effect on both the human community as well as the business economy. It is advantageous to every company to minimize the negative impact of a natural or manmade disaster.
Both Asher and LaRocca facilitated this industry information sharing because they sit on the Department of Homeland Security’s (DHS) coordinating council. The council was set up after 9/11 in order to draft a national infrastructure protection plan for commercial facilities in U.S. and facilitate communications between the private sector and the government.
As part of that process, the associations set up DHS committees of their members as well as designated chief security officers (CSOs) within each company. Designating CSOs as single points of contact within each company was required because some of the information shared by the DHS is restricted.
Shortly after Katrina hit, this network of CSOs became important. “As soon as it hit, I started getting calls,” said Asher. “What are you hearing from other people? How are other retailers trying to get in touch with their employees? Where are the relief centers?”
As Asher and LaRocca turned to DHS for answers, it became obvious that daily communications were needed. Twice-daily conference calls were established between retailers and representatives of DHS, FEMA, and the Red Cross. Other information was disseminated via email blasts sent to association members and nonmembers alike. This process not only helped the disaster recovery efforts by allowing retailers get questions answered quickly, but also helped retailers help one another with offers for generators, water, and other necessities.
Several retailers praised the associations for their assistance. “I thought their role was significant,” said Pep Boys’ Rowell. “It made the process so much easier had we not had that line of communication. I think it was really a time when retailers pulled together as a group regardless of what association you were with or what company you were with to make sure that everyone reaped the benefit of getting back up to speed as quickly as possible.”
Communicating with Employees. The large numbers and extended duration of the evacuation made communicating with employees a significant issue. As mentioned above, Walmart set up special websites and provided access to computer systems to help employees contact the company.
In an effort to improve their disaster recovery communication with employees after Katrina, Limited Brands modified their third-party incident-reporting system to help them receive information from the associates of their many brands.
The modification was made in time for Hurricane Rita and successfully allowed employees who were displaced by that hurricane to let the company know they could not report to work, where they wanted to receive their checks, and other important messages.
In terms of communicating with loss prevention response teams deployed in the disaster recovery areas where phone communications were impacted, The Home Depot tested use of satellite phones to communicate between their forward command site set up in Baton Rouge and their teams working in the field. According to Lamb, the satellite phones proved helpful.
Securing Data. With Katrina, Walmart lost some hard drives that contained store-specific information that may not have been backed up on the company network. This meant that certain associate and business data that was critical for the individual store’s business was damaged, lost, or inaccessible for a period of time.
Already with Hurricane Rita, the company pulled hard drives and took them to a safe area. Had any stores been wiped out, they would simply go into another location, plug in the hard drive, and access the data there.
If the store survived without physical damage, as was the case with Rita, once the store is secured and power is restored, they reinstalled the hard drive and the store’s systems were up and running immediately. This allowed them to respond to customer and associate needs and supplier questions right away, because the data was not compromised at all.
Wearing Multiple Hats. When Jerry Snider and his Dollar General response team went into the region to help reopen stores, “We assumed the store’s operations people would be ready to get started as soon as we had the store ready to go. We didn’t think about people losing their homes or family members.” The effect they encountered was similar to post-shock syndrome, where individuals’ emotions were elevated and their decision-making capabilities were not as sharp as normal.
“It dawned on us that this person had just lived through a category four hurricane,” said Snider. “Maybe we need to come in and make the decisions for them. In that way, we can be more helpful.”
This required Snider’s loss prevention organization to assume a number of disaster recovery responsibilities beyond traditional LP. After securing the facilities, assets, and money, they had to handle salvage operations and find contractors, such as roofers, electricians, and even people to cut down trees: not your normal loss prevention duties.
The LP professionals were happy to handle the extra duties and successfully reopened the stores, but Snider intends to train his team on that aspect of disaster recovery, so they can be better prepared in the future.
SIDEBAR: “He Saved the City”: One LP Agent’s Experience in Katrina
In 2005, Trent Ward was an in-store loss prevention agent at the Walmart Supercenter in Kenner, Louisiana, a suburb of New Orleans near the airport. Ward remained in Kenner during Hurricane Katrina and ended up playing a significant role in the disaster recovery after the storm. Here is his story in his own words as told to LP Magazine five weeks after the storm.
Before the storm, my LP partner at the store, Robbie Beatty, and I were buttoning down the store, everything from making sure the doors were locked to shrink wrapping the air-conditioning doors on the roof so they wouldn’t fly open and let water in the store. We also took compacted cardboard bales and barricaded the front doors and garden center doors. We double stacked them where you couldn’t get into the store. They acted as a visual deterrent and stopped debris from blowing in.
We finished Sunday morning, so I went home and packed to leave. When I reached the interstate, it was wall-to-wall traffic. So I called a friend at the Radisson Hotel and got a room on the seventh floor.
Around 2:00 or 3:00 in the morning, it started getting bad. My room was on the south side of the building. At this point, the wind was blowing 150 miles per hour from the north and the glass and window air conditioning units on that side started blowing in. A woman with two young children from across the hall started beating on my door frantically. So I put them in my bed and went downstairs to see if there was anything I could do.
The hotel was full, but fortunately the water didn’t come inside. It came right up to the doorway. The water outside the hotel on Veterans Highway was six feet deep.
In the lobby, I happened to run into Keith Conley, who is with the mayor’s office. I asked him if there was any way I could help. About an hour later, I got a call through the hotel switchboard saying the mayor wanted to see me.
At this point, it’s about two hours after the hurricane-force winds had passed. There’s still wind and rain. They sent a National Guard truck to pick me up. That was the only way you could travel in the flooded streets.
When the truck arrived, Tim Walker, who manages code enforcement for city, was in the truck. He and I had never met, but we became partners for the next several days. I was his link to Walmart, and he was my link to the city.
The message from the mayor was the first thing needed was water. Well, the last word I got from the company was I couldn’t go into the store without authorization. So, I had to make a decision, either I go into the store or maybe somebody dies. I did what I had to do. I didn’t know what the company would do at that time.
So we headed to the store, which is about three miles away. It took four hours because of all the debris in the water, trees and telephone poles. I’m in the back of the truck telling the National Guard driver, “When I tell you to stop, you stop. When I tell you to turn, you turn.” There was a canal running down the middle of the road we were on that you couldn’t see. The driver wasn’t familiar with the area and didn’t know that. If he’d made the wrong turn, we would have ended up in the canal.
We got to about ten blocks from the store when it became impassable. We had to find another way to the store. As we turned around, I heard someone hollering for help from the Chateau Living Center about a block away. We couldn’t get to him, so at this point…I’m not thinking. When you’re in this kind of situation, you just react…so I just dove into the water.
It turns out the retirement center residents were supposed to be evacuated, but the buses didn’t show up. About 100 residents and staff were in the building without any drinkable water. They asked if I could help, and I told them we could.
When I got back to the truck, I noticed a police unit was backed up to a Sav-A-Center store across the street. So we went over there and explained the situation to the police officer. It turns out the first water I got was not from Walmart, but from the Sav-A-Center. We wrote everything down that we took as accurately as we could and left it for the store owners. It felt good that we were able to get water to those people.
We finally made it to the Walmart store by going through neighborhoods and actually driving through a golf course. I didn’t have keys to get in, so I took a forklift around back to the grocery door where vendors bring in merchandise. I stuck the forks under the bottom of the door and slowly lifted until the door popped open. Anytime I came into the store, I entered and exited there because across the street there was a drug store in a strip center that was being looted. So we got water loaded and went back to city hall.
I eventually got back to my hotel room sometime the next morning. I only got a couple hours of sleep before they picked me up again. They would tell me, “This is needed here, and this is needed there.” There were several evacuation centers in Kenner—700 people in one and 300 in another—with no food or water. We went back to the store, this time with two trucks, to get bread and peanut butter, stuff like that, for sandwiches.
We started getting sporadic reports of looting. We had heard reports from New Orleans that things had just gone crazy. Then my concern was, what if looters get into the store and get hold of the weapons. So we went back to the store on the third day and took all the weapons and ammunition out. We took them to city hall and stored them in a kind of walk-in safe type room.
For nine days, this scenario was repeated over and over. When something was needed, I’d go back to the store, and we’d take what was needed. I would write down the UPCs and keep as accurate an inventory as I could.
From a company perspective, I thought I was alone in the world. Nobody from Walmart knew where I was. On the fourth day, the mayor of Kenner, Phil Capitano, somehow was able to get on the radio and talked about what was going on. Our regional vice president, Ronny Hayes, had somehow gotten into the area and heard the radio. He called the mayor who told him, “I’ve got one of your guys here. He saved the city.” That’s how the company found out that somebody from Walmart was here.
When I met Ronny, I told him what I had done. I didn’t know how he would react. He looked at me and told me, “Don’t worry about the decisions you’ve made. You’ve done the right thing.”The first trucks to come into the New Orleans area with any relief efforts were Walmart trucks. Ronny called me from across the river on Highway 90 and told me to meet him there. We went with a couple of patrol units to escort fifteen trucks into the city. It was the best sight you’ve ever seen.
We took four trucks to Kenner. We pulled into a parking lot near the center of Kenner and set up the first relief center. FEMA is still using that site today. When people saw those first trucks coming in, they came from everywhere. It was like a parade.
“Trent brought us our first lifeline of food and water from the Walmart store. He did an awesome job, considering at the time he didn’t know if he was going to be fired or what was going to happen to him. But he saw the need, stepped up to the plate, and had a great deal of courage in helping people. He became part of our city hall team, volunteering literally hundreds of man hours to our efforts to save our community.” – Phil Capitano, Mayor of Kenner, Louisiana
The company had delivered a huge Caterpillar generator on the Friday before the storm, but somebody had to install it. About a week and a half after the storm, a crew showed up to hook up the generator. They punched a hole in the back wall and installed the cables to get us up and running until normal power was restored.
We reopened the store two or three weeks after the storm. We were the only store in the New Orleans area open.
Our associates are scattered to the wind. We usually have about 300 associates working the store. We only have 87; many of them are from other stores in the area that are closed. Because of the number of associates, we’re only open 8:00 to 3:30 daily. We’re doing the best we can.
This has been a difficult experience. The city made me out as some kind of hero, but I just did what I had to do and fortunately had the resources to do it. I would hope that anybody would have made the same decisions.
This article was originally published in 2005 and was updated October 10, 2016.