I'm the manager of a grocery and drug combination store which is part of
one of the top five grocery chains in the country. The store is on track
to
do about $40 million this year, well above the industry average and close
to the top of my division. We employ over 200 people, most of them full
time. Each week we strive to satisfy over 50,000 customers. I hope this
establishes my credentials. For perhaps obvious reasons, I'd rather not
say
where or with whom.
The closing months of 1999 should be interesting. I expect to see a great
deal of panic buying, particularly in the last few weeks of December.
That's not difficult to foresee. How well our supply network, both company
warehouses and local vendors, can keep pace with the increased demand
remains to be seen.
In any typical week, we're out of stock on somewhere around 2% of the SKUs.
Some grocery stores are higher, few are lower. By 12/1/1999, I would expect
that figure to rise to 40%. By the end of the month, I would not be
surprised to see out-of-stocks at 75%, and whatever remains will be the
slower-moving items. Keep in mind, too, that that could mean three to four
times my typical sales for that week, which is already the best or second
best of the year. That means extremely crowded aisles and extremely long
lines. Beware.
On 01/01/2000, we will be at the mercy of our electricity and
telecommunications providers. Should the electricity fail, our backup
generators should last us around six hours. During that time, power is
routed to only the registers (minus the POS [Point of Sale] scanning
system), the pharmacy computer system, and a few lights scattered around
the store. Freezers are down, HVAC is down, all other electrical systems
are down.
After six hours we are completely in the dark. The next time you are at
your local grocery store, take note of the lighting. Most stores, mine
included, have a lot of glass at the front end of the store and nowhere
else. If the store were to go black, the back half of the store as well
as
the side perimeters are virtually unnegotiable without a flashlight.
The registers would be completely useless. Imagine how long the lines would
be if we had to run around getting price checks on every single item,
hand-write receipts, manually calculate sales tax and total, etc. Some
problems could be alleviated somewhat: hand-ticket the merchandise
(extremely time-consuming and virtually impossible given our present
payroll constraints), ignore the sales tax, etc. We would become something
like a really big, really empty, really dark, and possibly really cold
indoor farmers' market. Not a pretty picture. In all honesty, I would lock
the doors. So would my competitor down the street (who doesn't even have
six hours of backup power). So would everyone else in town, from the
7-11 to Wal-Mart.
This is not idle conjecture, by the way. Perhaps some electricity providers
will be ready by the big day, but my local electric company began its
remediation efforts earlier this year. I have little confidence that they
will make it. The loss of electricity is a very real threat.
And that's just electricity. Even if electricity were to work, disruptions
elsewhere could close me as well. Should the phones not work, we would not
be able to transmit orders to our warehouse. Should transportation
difficulties arise, we might be unable to restock even if we were able to
place orders. Should there be civil unrest, well, I'm not going to place
my life at risk to stop the spikey-hairs.
I would love to be the hero and keep my store open and feed everyone who
needs food. I like selling food. But I can foresee many difficulties in
achieving that. Quite frankly, at this point, such a task seems
improbable.
We can live without The Gap. We can live without science fiction
booksellers. But should my store, and my industry, have to lock its doors
for an extended period of time, many will suffer. I welcome all comments
and will attempt to answer any questions.
Best wishes, Matt
c/o David Tresemer <asc@dimensional.com>