HOUSTON (CN) — The secret society of toilet paper hoarders has retreated to their dank lavatories leaving rolls a plenty at Texas grocery stores. And business is booming for the Texas chain H-E-B thanks to a pandemic plan 15 years in the making.
Run on eggs? H-E-B struck deals with beer distributors to help deliver eggs to its stores.
Meat flying off the shelves? H-E-B ramped up its packing plants to 24/7 and pared its selection down from hundreds of different cuts to the top 50 sellers.
Nelly Medina works in the deli at an H-E-B in the Houston suburb League City. She said that due to the coronavirus, the company set up a hotline so employees, whom it calls “partners,” can call and speak to someone on its medical board if they feel sick or paranoid about the virus.
“Right now H-E-B is feeding all the partners. They get fed every single day. Chick Fil-A, Popeye’s, Domino’s Pizza, Pizza Hut, a lot of stuff,” Medina said.
“You don’t feel like everybody is panicked. I mean, I feel like we’re not in an emergency, we’re in a party time over here. Because all the time we’re eating. It’s a place we’re going to work, but at the same time we enjoy the time we’re there.”
Ranked No. 11 on Forbes’ 2019 list of America’s largest private companies, with total revenue topping $20 billion, San Antonio-based H-E-B has more than 116,000 employees at 350-plus stores in Texas and northeast Mexico.
Medina said workers at her store trail behind customers with disinfectants and wipe down every surface they touch, while “social distancing partners” remind people to keep their space.
“They always watch. Say you forgot and you get close to somebody. They go tell you, ‘Hey, hey, hey, remember,’” she said.
That was not the case at a 127,000-square-foot H-E-B in Houston Tuesday afternoon, where shoppers moved freely within touching distance of each other in the produce section and throughout the store.
They appeared oblivious to all the warning signs: The masked faces in the crowd, the white footprints in red squares on the floor telling them where to stand in checkout lanes and the man’s voice on the PA system saying something about the coronavirus.
H-E-B higher-ups said they started planning for a pandemic in 2005, when the H5N1 bird flu killed 43 people in Asia.
“In 2009, we actually used that plan in response to H1N1, when the swine flu came to fruition in Cibolo, [Texas] and refined it, made it more of an influenza plan. We’ve continued to revise it,” H-E-B emergency preparedness director Justen Noakes told Texas Monthly magazine.
But H-E-B is not unique in that respect. All large grocers plan for the worst, said Purdue University operations management professor Ananth Iyer.
“This is because grocers have been asked to deal with recalls of lettuce, beef during mad cow, etc., various other food items for several years. This means they need to rapidly identify and destroy specific items and guard against them impacting the grocery supply chain,” he said in an email.
Lora Cecere, CEO of Supply Chain Insights, was at her home in Philadelphia on Monday.
“I got the virus. I’ve been home and I’m on the mend,” she said in a telephone interview, the background noise sounding like she was making dinner.
Cecere said she likes H-E-B because it does a lot of innovative things, but it does not accommodate manufacturers who like to have data about how much of their product is on store shelves.
Unlike Walmart and Target, which freely share it, Cecere said, H-E-B charges for the data. So Procter & Gamble, maker of Charmin toilet paper, for instance, is left in the dark about how much is selling at H-E-B’s stores.
She said the data is critical for manufacturers.
“Because demand patterns are shifting, what we’re buying now is really different from what we used to buy. You know, we’re home, we’re cooking. You probably haven’t used this much flour in a long time, right?”
Cecere has been relying on the grocery delivery service Instacart with disappointing results.
She said 40% of the items she’s ordered on Instacart had been delivered short because the app does not update grocers’ inventory in real time. She said Walmart’s online delivery service has the same problems.
“So we’ve got a long way to go on rethinking these processes,” she said.
Cecere said she had a friend go shopping for her and he told her that all the grocers were handling the pandemic differently: At Target they were wiping down shopping carts and credit card pads, but there were no protective enclosures around cashiers; at Giant, a northeastern grocery chain, there were enclosures around cashiers; Walmart had no protection for cashiers.
“So we don’t have consistent guidelines from the CDC [Centers for Disease Control and Prevention] about what’s a safe shopping environment in this area. Every retailer is kind of doing his own thing the best he can,” she said.
Lisa Anderson, president of the business management firm LMA Consulting, said she’s impressed by how fast grocers responded to the increased demand caused by shoppers hoarding products with fears governments would impose quarantines to fight the coronavirus.
“They caught on quickly and started limiting the number of purchases within a category per person and started stocking the shelves throughout the day. By taking these two actions, the out-of-stock situation improved significantly and rapidly,” she said in an email.
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