RETAILERS GIRD FOR LATE '99 Y2K-INSPIRED BUYING SURGE

DENISE POWER

CHICAGO -- From the heart of Texas to England's high streets, retailers are preparing for fourth-quarter surges in demand with contingency planning tactics that include consumer-education campaigns, practice drills and heightened levels of collaboration with supply-chain partners.

The expected spike in consumer demand is widely attributed to stockpiling consumers are likely to do because of uncertainties related to the year-2000 issue. In addition, the traditional holiday season and once-in-a-millennium New Year's Eve parties will drive consumer buying to new levels, said executives from H.E. Butt Grocery Co., San Antonio, and J. Sainsbury, London, who spoke at the Food Marketing Institute's convention here.

"And then there are the three Y2K disaster movies being screened in the autumn. We need that like a hole in the head," said Trefor Hales, director of retail systems and innovation at J. Sainsbury.

Both Hales and Gavin Nichols of H-E-B expressed particular concern about the popular media and Internet playing to the public's fears about the year-2000 computer problem and the panic buying it will drive.

"We expect an unbelievably high demand," said Nichols, director of information services, resource services and process management at H-E-B. "We are looking at public reactions to news reports, dire warnings that are seen on the Internet and general skepticism that could cause panic buying and hoarding, which, in turn, could cause a self-fulfilling prophecy."

To ease consumer fears and ready themselves should dramatic spikes hit the supply chain, retailers are launching a series of initiatives. Among them:

Communication With Consumers: H-E-B has posted year-2000 posters in its stores, printed brochures for customers and is educating staffers about the realities of the situation so they can respond to shoppers' questions.

Collaboration With Supply-Chain Partners -- and Competitors: Sainsbury's Hales described the development of an industry extranet, www.selfcheck.org, through which trading partners can share information about their year-2000 remediation and compliance status. Among the retail participants are Sainsbury, Safeway, Tesco, Asda and Marks & Spencer.

Practice Drills: H-E-B will put some of its contingency plans into action through announced and perhaps unannounced drills. In late June, the chain will participate in a year-2000 practice exercise in cooperation with the city of San Antonio.