Recently, the American Red Cross urged consumers to stock up on nonperishable grocery items and bottled water in anticipation of year-2000 computer crashes, but most retailers don't think that's necessary.
The ARC is concerned that computer malfunctions could affect general services, as well as warehouse deliveries to supermarkets, leaving people without food or water.
"As far as stocking up is concerned, we're asking people to have at least a week's supply," said Sheila Auster, a spokeswoman for the American Red Cross of Greater New York. "If a power shortage lasts for more than a month, the ARC and other organizations will set up arrangements for supplies."
On the ARC Web site, www.redcross.com, Y2K Preparedness information lists nonperishable foods, water and common prescription and nonprescription medications as the items that people should stock up on. Supplies should last several days to a week. The ARC also insists that people check with the manufacturers of home appliances to see if their electrical equipment will be affected.
Most supermarket chains, however, don't think that such precautions are necessary. Spartan Stores, Grand Rapids, Mich., expects to be in business Jan. 1. A spokesman for the chain said that there is no need to worry.
"We've been doing something for three years now and we're doing everything necessary to work with the systems," said Jim Swoboda, director of strategic business development at Spartan. "I believe most of the industry is ready."
Swoboda said he expects that the general public will not panic. "If [some computer systems] fail, people will find manual ways to get around the problem. We [at Spartan] feel we're in good shape and that everything will work."
Auster of the ARC agreed that people shouldn't panic, or start stocking up now. "We're not recommending that you stock up for a year's worth of supplies, but just several days to a week," Auster said. "We don't know what exactly will happen, if anything at all, but it is good to be prepared."
A recent survey done by the Grocery Manufacturers of America, Washington, found that 75% of members have updated their systems to be Y2K-compliant, while 95% said they will be ready Jan. 1, 2000. Of the 130 corporate GMA members, 84 participated in the survey.
Barbara Berr, an advertising manager for Lund Food Holdings, Edina, Minn., said the chain plans to address the stockpiling issue as the millennium gets closer. Lund is not urging customers to stock up on nonperishables and bottled water. "We've had an internal task force on Y2K for the last two years," said Berr. "We're confident in getting supplies and continuing operations."
According to Berr, the most dangerous areas for Lund were the operating and the supply chain systems, which are currently being updated.
"When the time gets closer, we will put out a customer communication letter that will go into bagged groceries." Berr said the letter is meant to put people's minds' at ease and let them know Lund has taken the necessary steps to ensure that stores will continue to function. "There will always be alarmists," she said, "but we're anticipating no problems."
Big Y Foods, Springfield, Mass., is also not urging customers to stock up and will treat the New Year like "just another day."
"We haven't seen anyone stocking up on products and we're not urging it," said Claire D'Amour, vice president of corporate affairs. "The fear issue has just not surfaced."
Hy-Vee, West Des Moines, Iowa, will be prepared, according to Ruth Mitchell, public relations. "We recognize that a certain percentage of people will feel comfortable stocking up, but we're not encouraging it," said Mitchell. "We will have enough stock on hand to take care of those people."
Giant Food, Landover, Md., has been actively working on the Y2K problem since 1996, said Barry Scher, vice president of public affairs.
"We're taking the necessary steps so that our systems and hardware are Y2K-compliant, and all hardware will be compliant by June of 1999," said Scher. Scher also added that supplier systems will be adapted by September 1999.
Harris Teeter, Charlotte, N.C., recently put out a company news release that said if computers malfunction, the chain will continue operations without computers.
"If our vendors tell us that they are not going to be compliant by the year 2000, we will make other arrangements to continue to use them as a supplier or find alternative resources to ensure we are able to continue to provide our customers with high quality products," the release stated.
The statement also assured the public that Harris Teeter will be ready Jan. 1, 2000. "Customers of Harris Teeter can rest assured that we'll be able to continue to provide to our stores," the news release said.
Other businesses that are part of the food-retailing industry -- for example, suppliers and distributors -- may also be affected by Y2K. Tom Agan, a principal with Princeton, N.J.-based Kurt Salmon & Associates, told SN that smaller brand companies that do not keep large inventories could experience Y2K fallout. However, he doesn't anticipate problems with major-brand companies, which will have enough products in stock to meet demand, should consumers begin to get nervous and start stockpiling.
"Retailers have already begun going forward in pushing the inventory, and I haven't heard of anyone stockpiling," said Agan. "There's a lot going on in the background; retailers have been planning for this.
"I don't agree with what the American Red Cross and other organizations have done, in telling people to stockpile," Agan continued. "If organizations like the ARC talked to retailers, they wouldn't need to issue these preparation [warnings]."
The industry as a whole said it believes it is ready, despite the fears of service organizations. Timothy M. Hammonds, president of the Food Marketing Institute, Washington, and Michael W. Wright, chief executive officer of Minneapolis-based Supervalu, recently testified before a Senate panel that the food industry is prepared for the New Year.
As reported by SN, Hammonds, Wright and other industry insiders testified before the Special Committee on the Year-2000 Technology Problem to let Washington know that the Y2K situation is under control.
According to Michael H. Heschel, Kroger's executive vice president for information systems and services, who also testified at the hearing, the Cincinnati-based retailer has budgeted about $30 million to work on Y2K issues. The chain has been working on the problem since 1995. Moreover, the company has about 35 to 36 days of inventory in distribution centers and stores.