The grocer started
communicating with Chinese counterparts in January and was running tabletop
simulations a few weeks later. (But nothing prepared it for the rush on toilet
paper.)
DAN SOLOMON AND PAULA FORBES MAR 26,
2020
Texas Monthly is providing unlimited access to all coronavirus
stories. Read our coverage for
stories on and analysis of the virus’s impact on Texas. To keep up with major
news affecting the state, sign up for The State of Texas newsletter here.
The
coronavirus pandemic has transformed the country in just a handful of weeks. As
Americans focus on the essentials—feeding our families and ensuring we have the
necessary supplies to keep our households clean and safe—grocery stores and
pharmacies have demonstrated just how crucial they are to a functioning
society.
We’ve
seen chains struggle with the challenges the current crisis presents. Some
stores are instituting policies limiting the numbers of shoppers allowed in at
a time, creating long waits to enter. Perhaps even worse, other stores are not,
leaving their shops a free-for-all without adequate social distancing measures.
Staples like flour and yeast, to say nothing of hand sanitizer and toilet paper,
are proving difficult to find on shelves. Supply chains are taxed. And the
conditions faced by employees vary wildly by chain, with stores
developing new (sometimes controversial) policies around sick leave for the workers who have proved themselves
essential, and often doing so on the fly.
San
Antonio-based H-E-B has been a steady presence amid the crisis. The company
began limiting the amounts of certain products customers were able to purchase
in early March; extended its sick leave policy and implemented social
distancing measures quickly; limited its hours to keep up with the needs of its
stockers; added a coronavirus hotline for employees in need of assistance or
information; and gave employees a $2 an hour raise on March 16, as those
workers, many of whom are interacting with the public daily during this
pandemic, began agitating for hazard pay.
This
isn’t the first time H-E-B has done a good job of managing a disaster—it played an important role in
helping the Gulf Coast recover from Hurricane Harvey in the immediate aftermath
of the storm—which led us to ask: How did a regional supermarket chain develop
systems that allow it to stay ahead of a crisis as big as this one? We spoke
with nearly a dozen employees, executives, and customers to better
understand—in their words—how H-E-B has taken on its unique role in shaping its
business around the needs of Texans in the midst of trying circumstances.
Before the Outbreak
Justen
Noakes, director of emergency preparedness, H-E-B: Just
a little bit of history: we have been working on our pandemic and influenza
plan for quite a while now, since 2005, when we had the threat of H5N1 overseas
in China. That’s when we first developed what our plan looked like, [as well
as] some of our requirements and business implications. In 2009, we actually
used that plan in response to H1N1, when the swine flu came to fruition in Cibolo, and refined it, made
it more of an influenza plan. We’ve continued to revise it, and it’s been a
part of our preparedness plan at H-E-B ever since.
Craig
Boyan, president, H-E-B: Justen leads our emergency preparedness with a group of
folks, and that is a full-time, year-round position. We are constantly in a
year-round state of preparedness for different emergencies. We keep emergency
supplies at almost every warehouse and have water and other supplies staged and
ready to go and kept in storage to make sure that we are ready to [react
quickly] when a crisis emerges, whether it be a hurricane or a pandemic. We
take being a strong emergency responder in Texas, to take care of Texas communities,
very seriously.
On January
15, Wuhan’s Municipal Health Commission announced that the novel coronavirus
was spreading via human-to-human transmission.
Justen
Noakes: So when did we start looking at the coronavirus? Probably
the second week in January, when it started popping up in China as an issue.
We’ve got interests in the global sourcing world, and we started getting
reports on how it was impacting things in China, so we started watching it
closely at that point. We decided to take a harder look at how to implement the
plan we developed in 2009 into a tabletop exercise. On February 2, we dusted it
off and compared the plan we had versus what we were seeing in China, and
started working on step one pretty heavily.
Craig
Boyan: Starting in January, we’ve been in close contact with
several retailers and suppliers around the world. As this has started to
emerge, we’ve been in close contact with retailers in China, starting with what
happened in Wuhan in the early couple of months, and what kind of lessons they
learned. Over the last couple of months, [we’ve been] in close contact with
some of our Italian retailers and suppliers, understanding how things have
evolved in Italy and now in Spain, talking to those countries that are ahead of
us in the curve. We’ve been in daily contact, understanding the pace and the
change and the need for product, and how things have progressed in each of
those countries.
Justen
Noakes: We modeled what had been taking place in China from a
transmission perspective, as well as impact. As the number of illnesses and the
number of deaths were increasing, obviously the Chinese government was taking
some steps to protect their citizens, so we basically mirrored what that might
look like. We also took an approach to what we saw during H1N1 in 2009, and
later got on top of it. Our example was if we were to get an outbreak,
specifically in the Houston area, how would we manage that, and how would we
respond with our current resources, as well as what resource opportunities would
we have.
Craig
Boyan: Chinese retailers have sent some pretty thorough information
about what happened in the early days of the outbreak: how did that affect
grocery and retail, how did that affect employees and how people were
addressing sanitization and social distancing, how quarantine has affected the
supply chain, how shopping behavior changed as the virus progressed, how did
companies work to serve communities with total lockdowns, and what action steps
those businesses wish they had done early in the cycle to get ahead of it.
Preparing Employees
Justen
Noakes: One of the biggest things we’ve looked at is what are the
impacts to their employees? How they dealing with the health of their
employees? We’re very interested in what’s happening in the supply chain world,
and the products that are being affected. How are they running their stores
when they’re impacted by absenteeism? We’re trying to get answers so we can get
ahead of this and really understand how the overall operations of their
companies are being impacted.
On
February 12, the first coronavirus case was found in Texas. Over the next
month, certain products started becoming scarce, and on March 14, H-E-B
announced it would be reducing store hours to 8 a.m.–8 p.m.
Justen
Noakes: Going to eight-to-eight has been in our playbook all along,
but I think what drove it for us was trying to ensure that we had enough
product on our shelves to take care of our customers. That’s really what we
needed—we needed a little bit of extra time to stock all the groceries that
were coming in.
Tina
James, chief people officer, H-E-B: [Our partners] have
responded exceptionally well. Our volume is up tremendously in our stores, and
[as far as] our culture, we are incredibly dedicated and engaged. I have been
amazed and humbled by how positive their spirit is, and how great they feel to
be serving our customers. That said, it’s fairly exhausting work, and the
volume has been so substantial that we’ve cut our hours back.
Michael
Leas, stock controller, store number 351, Edna: My
overnight crew, they’re just coming in, and it seems like they’re ready. They
just ask me what I need them to do. I haven’t had very many complaints from the
guys or anything. It’s been really nice. You can tell that they understand it’s
not our fault; this is just something that’s happening.
Craig
Boyan: We’re not in a super glamorous job. We have a lot of
hard-working people doing hard jobs. But there’s a strong sense of pride at
H-E-B. We describe ourselves as a purpose-driven company, and we’re at our best
amid times of crisis. There’s a great sense among H-E-B partners that they’re
doing what’s needed to take care of Texans, and that keeps the morale very
high.
Tina
James: For example, when we saw what was happening with the volume,
we asked at corporate if people wanted to volunteer to take shifts in the
stores and at the warehouses. We immediately had hundreds—800 corporate folks
volunteered for 350, 400 shifts in our stores and warehouses, to be able to
help out and give some relief to our stores.
Stephanie
Lowe, customer: I met Alma, who has been with H-E-B for 21 years, if I recall, and
works in the store’s bookkeeping department. She had answered the “all hands on
deck” call and was working checkout for the first time in years and she was so
excited. She kept saying how much fun she was having being back at checkout and
took great delight in looking up the codes to ring up produce. It was such a
positive interaction in the midst of organized chaos, and I have thought about
it throughout the week at work when things have been stressful.
Command Central
Justen
Noakes: We activated our Emergency Operations Center in San Antonio
on March 4 [the EOC is run out of H-E-B’s new 1.6 million-square-foot
super-regional warehouse]. The driving factor behind that is when we see even a
potential upswing in customer activity due to one of these events. The
Emergency Operations Center at H-E-B is a collection of the most impacted areas
of the company, and the leaders in those areas are brought together to make
streamlined decisions and collaborate together on a daily basis. That’s almost
every area of the company, so we’ve got a lot going on in our emergency
operations center right now. It’s very busy.
Dya
Campos, director of government and public affairs, H-E-B: Even
in the EOC right now, we’re practicing social distancing here. We’re all very
far away from each other, and we’re very careful around each other, and taking
precautions to take care of each other.
Tina
James: There’s so much product coming through the super-regional
headquarters where the EOC is that we’re having two hot meals delivered every
day, for the partners who work here. We also have set up an essential store for
them within the warehouse, because it’s difficult for them to get to a store
during the new hours, so they’re able to pick up canned items, toilet paper, peanut
butter, and water.
Trying to Keep Up
Craig
Boyan: When a hurricane happens, it’s in an isolated part of the country.
We’re quite good at pulling product from around the rest of the country and
feeding it to Texas. That is much more difficult in a pandemic, where every
area of the country is under real stress. So our suppliers, where we’re getting
paper towels from, our wipes, our hand sanitizer, are getting hit from all
retailers, and we are seeing much higher levels of out-of-stock [goods] as a
result. We’re working really hard to be creative in how we source product when
the supply chain is under real pressure.
In
early March, retailers around the country started seeing shortages of common
household products, and H-E-B began limiting quantities that customers could
purchase on a single trip.
Justen
Noakes: What we really started seeing first was runs on N95 masks. I
think people were sending the masks back home to their families, and it started
exponentially increasing at that point, particularly around cleaning supplies,
disinfectant, things of that nature. But I don’t think anybody saw the toilet
paper rush coming.
Craig
Boyan: We did not see runs on toilet paper as one of the first things to
go out of stock. That was something we still kind of have a hard time
understanding.
Michael
Leas: When we get to work, it’s been empty in the stores, certain
sections, like the paper aisle, water, just a bunch of stuff. Bread is just
completely blown out, so it’s been kind of weird. They changed our hours too.
So we’re coming in a couple of hours earlier and staying a little bit later
now, at night … My store is a tiny little store. It’s got nine aisles. So it’s
like a big Walgreens.
Craig
Boyan: We have a number of Texas companies that are pitching in and doing
great work. I can give you a few examples: Labatt is a food distributor here in
Texas. Their primary customers are schools, institutions, and restaurants.
Obviously those businesses are under real pressure, and many of them are
shutting down. So we have been partnering with Labatt to deliver rotisserie
chickens, deli lunch meats, and a variety of products.
Blair
Labatt, president, Labatt Food Service: We just sort of
bolted onto H-E-B’s need in the conventional grocery supply with our trucks and
drivers, because obviously our core restaurant business is very adversely
affected by the crisis, so it’s really worked out well for us.
Craig
Boyan: We’re partnering with the beer distributors in Texas, for
the first time ever, to deliver eggs to our stores. We’re seeing these types of
businesses coming together in a powerful way to support each other, and it’s a
wonderful thing.
Michael
Leas: There have been some nights where the paper [aisle] is out and
just didn’t really get restocked. But then there’s nights where it gets
completely jam-packed with products. It almost feels like we’re coming into an
empty store, and we’re completely filling it up every night. You will have a
little bit of of holes here and there throughout the store, but it’s just not
that bad.
Craig
Boyan: We’ve been working very hard right now to deliver meat and
poultry and eggs to our stores. We’re accelerating opening a new warehouse in
Houston that was due a few months later. We’re taking some of our warehouses in
the state and transitioning them over to serving just meat, because we’re
seeing such significant demand for meat, poultry, and eggs. We’re still having
a real hard time sourcing eggs. We had big loads in the last few days, and
they’ve been scooped up as soon as they hit the shelves, so we’re working very
hard with egg suppliers to see where we can get additional eggs. But our meat
plant is running 24/7—we have our own meat plants here. They normally don’t go
24/7, but we’ve focused them down to serving the top fifty items out of our
meat plants; they normally carry several hundreds. [Focusing on top items]
means fewer changeover delays, and it allows us to ship significantly more
meat. We’re seeing those kinds of moves across the board as we look to ramp up
volume in a rapid way.
Zak
Houram, customer: Nothing was super out of stock when I was there last. The staff is
super friendly and upbeat, with all things considered. One store [a Central
Market] is in Southlake and the other is in Fort Worth, off of Hulen. The Hulen
store was considerably better stocked, but Southlake is still better compared
to the Targets and Krogers and Tom Thumbs I’ve been to.
The Great Unknowns
Justen
Noakes: We’re here to take care of our partners, take care of our
customers, take care of our community. So I think that that’s really our number
one focus, and what we’re really trying to do is to meet those objectives—but I
will tell you that the challenge of it is the longevity. With a hurricane, you
can see the wind coming, you can see the rain. You can see an end in sight.
We’ve been having conversations about how this equates to Harvey, and although
the need is very similar … there is not really a clear end in sight on when we
think we will be out of this. On a twice-daily basis, we’re monitoring trends
in Europe and China, so we can forecast an estimate on when we think we’ll be
out of this. But unlike a hurricane, we just can’t see it.
Tina
James: When we have a hurricane, we often know fairly quickly which
of our partners have been impacted. At this point, we can only project from a
personal impact statement, so at this point, we don’t know.
On
March 11, President Trump gave a prime-time address about the response to the
virus. That same evening, the NBA announced that it would be suspending its
season, and actors Tom Hanks and Rita Wilson announced they had both contracted
COVID-19.
Craig
Boyan: We’ve had several different spikes, but one of the most
significant was [around March 11], when we saw a second furious wave of buying.
I don’t know if it was the announcement that the NBA had shut, or one of the
presidential news conferences, or Tom Hanks, but we saw a major spike that day.
And we’ve seen increased spikes since.
Michael
Leas: The cleaning aisle has been insane lately. The canned aisle
has been insane. Sugar is one thing that’s been out of stock a lot lately, but
it feels like they started concentrating on that too. There’s certain things,
water, definitely water. We’re getting trucks with just water, which is not
normal.
On
March 16, local officials ordered bars and restaurant dining rooms in Houston
and Dallas to close; Austin officials made the same decision the following
day.
Justen
Noakes: I would say rural and urban stores are very consistent, as
far as the increase. What we are seeing is a little difference as far as the
timing goes. I think that’s directly related to confirmation of cases. You’re
also seeing local governments come in and issue quarantines like closing
restaurants and bars, and I think that really fuels some of the purchasing and
shopping, and as that goes from town to town, and as cases increase in other
towns, that’s what’s driving it for a lot of our shoppers.
Michael
Leas: We’ve had a lot of extra help from people that aren’t
stockers, a lot of day crew, the cart pushers or the baggers. They’ve been
coming in early in the morning to help us stock the shelves. These trucks have
been massive. Our heaviest aisle during the holidays is a canned aisle, and
you’ll get maybe about three cases. That’s a pretty heavy night for our little
store. Last night we had over seven hundred cases on that [aisle]. Some of
these aisles have been two, three times heavier than they normally are.
Let’s talk about how NO
STORE DOES MORE THAN @HEB.
Jessica
Elizarraras, customer and bride: Our wedding was
supposed to take place on April 5, [but] it didn’t make sense for us to try and
have this party. So we scheduled everyone—the officiant, co-maids of honor—for
Sunday at 4 p.m. and scrambled for a photographer. But I didn’t think of
flowers. By Saturday, we didn’t feel comfortable running around San Antonio
finding flowers. So I emailed the H-E-B Blooms department at 5:59 p.m. and
received an answer almost immediately. [H-E-B corporate designer] Andy Hopper
called us on Sunday morning, went to the wholesaler, found a few goodies and
whipped up this amazing bouquet. We picked it up at the Lincoln Heights H-E-B,
and he even included a boutonniere for TJ, which I didn’t even think to order
(bridezilla, much?)! Given the circumstances, I didn’t think they could spare
anyone. They truly made our day. A bride needs a bouquet and I ended up with a
gorgeous one because they cared enough to make it happen, COVID-19 or not.
Lessons Learned
Craig
Boyan: Any experience, you learn from and you continue to get
better. The way we focus on pushing our business is to try to adapt as quickly
as humanly possible, as we talk about the daily adjusting of our supply chain
and our store operations.
Justen
Noakes: The most important lesson for us is to listen to what’s
going on in our stores. When we started seeing the N95 masks and the
sanitizers, we took that as a good sign that our customers were concerned about
what was going on, and that’s what really spurred us to activate our program.
That’s the biggest one—to make sure that we’re really paying attention to what
our customer does, and to actually respond to it. As we continue to maneuver
our supply chain and support our stores during COVID-19, we’ll bring some
lessons learned and tools out of that into hurricane season.
Dya
Campos: One thing we learned from Hurricane Harvey is that our
customers want to hear from us. They want to hear our perspective, they want to
know what we’re doing, what we’re thinking, how we’re helping our communities.
Bernice
Calderon, customer: Whoever is managing their crisis communication is on top of it.
And all of their staff has been just as friendly as ever. I did a quick grocery
trip on Saturday, and my favorite H-E-B employee told me she missed me cause
she hadn’t seen me and “Que dios la bendiga.” I mean!
Tina
James: It’s not lost on us that we are offering an essential public
function, and it’s not lost on our partners, either. And they continue to come
to work with a very positive attitude, and continue to serve above and beyond
even their normal hours. That never ceases to amaze me. We are very fortunate
in that H-E-B has a chief medical officer as well as a medical board, so we
have resources at our fingertips to offer up medical advice and guidance to our
partners. So we play a unique role in our partners’ lives that allows them to
have some comfort and calm so they can turn around and take care of our
customers.
Blair
Labatt: It’s inspiring to see people rally around and meet a crisis. It’s
uplifting to see people cooperate, and energizing to see that all happen. The
whole process has been one huge unified response.
Y’all remember when
Titanic was sinking and the band was still playing?
Here’s H-E-B version of it while people are freaking out over the corona virus
Schertz, TX
Here’s H-E-B version of it while people are freaking out over the corona virus
Schertz, TX
Dya
Campos: A customer sent mariachis in appreciation! We feel a lot of
that.
Craig
Boyan: The spirit of Texans and their treating H-E-B partners with
the respect and pride that they do makes us feel fantastic. I drove by a church
the other day in San Antonio that had a sign out front that said ‘Thank an
H-E-B checker.” We’ve seen an outpouring of support for our partners and truck
drivers that gives us a great sense of pride.
https://www.texasmonthly.com/food/heb-prepared-coronavirus-pandemic/
No comments:
Post a Comment