KATRINA DECIMATES REGION, LEAVES OPERATORS IN LIMBO

Elliot Zwiebach

NEW ORLEANS -- Hurricane Katrina left a residue of destruction and uncertainty last week for food retailers here and in Mississippi.

"This was our version of the tsunami," Jay Campbell Jr., president and chief executive officer of Associated Grocers, Baton Rouge, La., told SN. "The devastation is immense."

He said it may take several days until AG officials can assess the full impact of Katrina, which left New Orleans virtually underwater and washed away buildings and highways throughout the region. But Campbell told SN he believes the destruction may affect up to 50 or 60 of AG's 250 members with stores in low-lying coastal areas -- retailers that account for roughly 25% of the cooperative's $473 million volume.

"Some of those stores are in areas that are still under martial law," Campbell said last week, "and at this point, no one can return to their homes or businesses to see how much damage there is. But based on sketchy reports, we know some stores have been leveled to their foundations, while others have different degrees of damage, including some that have lost their roofs or are filled with water."

Access was also a major issue for other retailers trying to assess the degree of damage to their stores.

Winn-Dixie Stores, Jacksonville, Fla., said 43 of its 54 stores along the Gulf Coast remained closed last week, including 36 here; four in Biloxi-Gulfport, Miss., and three in Hattiesburg, Miss., "although we haven't been able to assess the degree of damage at all the stores that remain closed because of access problems," a spokeswoman told SN.

A&P, which operates 28 Sav-A-Center stores in Louisiana and Mississippi, said 26 remained closed at midweek, including six here. A spokeswoman for the Montvale, N.J.-based company said the chain has not been able to fully assess their condition because of access issues.

Wal-Mart Stores, Bentonville, Ark., told SN it was uncertain about the condition of a supercenter and Sam's Club in Gulfport, Miss., and a supercenter in Biloxi, Miss., "although we hear the stores in Gulfport are in fairly good shape," spokeswoman Sharon Weber told SN. She also said Wal-Mart had not yet been able to assess the loss from looting at a couple of supercenters in the central business district here.

According to newspaper reports, looters carted off merchandise from several retail stores that had been shuttered by the storm, including Winn-Dixie, Sav-A-Center and Wal-Mart locations.

After an evacuation of New Orleans was ordered last week, reports said it may be months before power is fully restored and residents are permitted back into the city, leaving the impression that many businesses that survived the storm may not be able to reopen for some time.

Estimates last week indicated that the storm may have caused $25 billion in damages to homes and businesses, outpacing the $21 billion in damages caused by Hurricane Andrew in 1992.

SOME AREAS SPARED

For Gulf Coast operators in some inland areas, however, it was business as usual by midweek, with retailers telling SN they had reopened stores that were shut down for a day or two when the storm hit. While most said they were operating at full power, a few still required in-store generators. Some also reported minor damage, including leaky roofs, and there was some product loss resulting from power outages.

Retailers said demand was heavy for water and ice as consumers dealt with high humidity and power outages at their homes; other high-demand items included bread, lunch meats, toilet paper, candles and batteries, they said.

Many area distribution centers were in full operation, including facilities operated by A&P, Albertsons, Associated Grocers, Publix, Supervalu, Wal-Mart and Winn-Dixie -- though waters were continuing to rise in some areas late last week.

Albertsons told SN it was forced to close 12 of its 17 stores in Louisiana early Sunday morning in anticipation of the storm, Danielle Killpack, a chain spokeswoman, told SN.

Eleven of the 12 had reopened by Tuesday. "We lost fluid milk, dairy items, ice cream, and fresh meat and seafood," Killpack said.

Before it turned west toward the Gulf Coast early last week, Hurricane Katrina hit land in South Florida.

Most retailers there reported "very brisk" business prior to the storm. "After this area experienced four hurricanes in succession last year, we understand what happens in hurricane season, so we have plans in place," Shane McEntarffer, a spokesman for Albertsons' Florida stores, told SN.

Albertsons closed its 21 stores in South Florida the day Katrina initially hit land and reopened the following morning.

Associated Grocers of Florida, based in Miami, said only about 10 member stores lost power, with some unable to reopen until last Monday or Tuesday. AG also lost power at its perishables distribution center for seven hours but kept all doors closed and did not lose any product, Cal Miller, president and CEO, told SN.

Winn-Dixie shut down its Miami-area stores "out of safety concerns and in response to orders by civil authorities," spokesman Dennis Wortham told SN, but all reopened within a day.

As Katrina moved west along the Gulf Coast, Winn-Dixie closed more than 50 locations in Louisiana, Alabama and Mississippi. The company said only about 11 of those had reopened by midweek while the company continued to try to assess the damage to the other 43.

Publix Super Markets, Lakeland, Fla., closed 150 stores in the Miami area, but reopened them several hours later. Publix closed its 11 stores in the Florida Panhandle early Monday, but all reopened later the same day.

Wal-Mart said it closed 125 stores along the Gulf Coast last week, including units of Wal-Mart and Sam's and two distribution centers; 51 stores remained closed late last week, including some that were inaccessible.

Whole Foods Market, Austin, Texas, said it closed its three Louisiana stores in New Orleans, Metairie and Baton Rouge. Only the latter store reopened.

The company said it expects a fourth-quarter sales loss of $5 million to $6 million -- which analysts said could amount of 1 cent per share in earnings -- from the temporary shutdown of five stores in Florida and the two stores that remain closed in Louisiana.

Retailers Launch Relief Efforts

The food industry rallied to help victims of Hurricane Katrina last week, with several companies making donations to or collecting donations for the American Red Cross.

Those offering consumers a way to help included the following:

- Bi-Lo/Bruno's, Mauldin, S.C., launched a donation program that enables customers and associates to use special scan cards to donate $1 or more to relief efforts by the ARC. Bi-Lo said it would match up to $25,000 in funds collected. The company also said it is sending trailer loads of water to Montgomery and Mobile, Ala.

- Food Lion, the Salisbury, N.C.-based division of Delhaize Group, Brussels, Belgium, which is asking customers to make donations at the checkstand. The chain said it is pooling resources with employees to purchase and transport a truckload of bottled water to those in need.

- Food For All, Falls Church, Va. -- a program of the Food Industry Crusade Against Hunger -- said retailers can order hurricane-related point-of-purchase cards for display at supermarket checkstands so customers can donate funds to those affected by the hurricane.

- Jax Markets, Anaheim, Calif., is paying for a truckload of water and 5-pound bags of rice to be distributed to those in need by Associated Grocers, Baton Rouge, La. "People there need the food and water, and this was the only way I wanted to handle a donation," owner Bill MacAloney told SN.

- Kroger Co., Cincinnati, said it will accept customer donations for the ARC through September. The company also said it will offer associates a way to help and match their donations, up to $300,000, through The Kroger Co. Foundation, The Ralphs/Food 4 Less Foundation and The Fred Meyer Foundation.

- Price Chopper Supermarkets, Schenectady, N.Y., activated a "Your Help Counts" campaign that allows customers to remove $1 "pin-up" tags from an ARC display and have it scanned as many times as they wish to raise money for people affected by the hurricane. Price Chopper said it will match all donations up to $50,000.

- Publix Super Markets, Lakeland, Fla., established a program to help the ARC Disaster Relief Fund by enabling customers and employees to add whatever funds they designate to their grocery totals to help those affected by Katrina and other storms during the hurricane season.

- Spartan Stores, Grand Rapids, Mich., will offer a program through Sept. 17 at its corporate-owned Family Fare, Glen's and Pharm stores that allows customers to donate $1 for the Salvation Army relief effort by purchasing scan cards. Spartan said it will also donate $5,000 and bottled water to aid in the relief effort.

- Stater Bros. Markets, Colton, Calif., was scheduled to partner with two Southern California television stations to accept monetary donations for the ARC last Thursday and Friday on the parking lots at four store locations.

- Stew Leonard's, Norwalk, Conn., will collect donations for the ARC Disaster Relief Fund through the Wishing Wells outside its three stores, through lock boxes at each location for larger donations of cash or checks and through employee contributions. In addition, the Stew Leonard family said it will donate $10,000.

- Wal-Mart Stores, Bentonville, Ark., said it will accept customer donations nationwide at all stores and credit card contributions through walmart.com. The company also said it will donate $1 million to the Salvation Army for relief assistance to provide meals for victims and emergency and rescue personnel.

- Whole Foods Market, Austin, Texas, is asking customers to add donations to their purchases that will be earmarked for the American Red Cross Disaster Relief Fund. The company said it will make a matching donation of up to $1 million.

- Winn-Dixie Stores, Jacksonville, Fla., implemented its "Neighbors Helping Neighbors" program at all stores to assist the ARC Disaster Relief Fund to benefit hurricane victims. Under the program, customers can make donations by telling checkstand cashiers how much they want to add to their total bill. According to Terry Derreberry, director of communications and neighborhood marketing, "Our neighbors face a long and difficult recovery process, and we want to do everything we can to help them."