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Mar 01, 2006

Housewares Report: Hurricanes & Retail Business

PrintHousewares Report: Hurricanes & Retail Business  

By Jack Eikenberg

You might think that hurricanes are bad for business. We all know that they are potentially bad for one’s health, particularly if you are near the storm’s center with raging, roaring winds of 100-125 miles per hour.

South Florida has been smashed four times in 14 months and its economy could be devastated. Should you be able to fly over the state, huge areas of damage remain apparent. What you will also see though, is a beehive of resilient activity with aggressive rebuilding, trucked merchandise flowing into and out of stores as quick as they can be warehoused, and people going to work as ever before.

The first wave of snowbirds have added to traffic and retail shopping, but their concern is the condition of the golf courses and restaurant availability. Another wave of service workers are coming to the area to help cut down damaged trees, work on the never-ending road expansions, maintain the new golf courses, and staff the Wal-Marts and small businesses that are emerging to accommodate growth. All this without regard to pressures put on hospitals and schools.

But what does this have to do with home retail? Those who live here and those who have second homes here literally clean out Home Depot and Lowe’s for generators, storm shutters, gasoline containers, large funnels, tape, hammers, nails and nail guns, wall boarding materials, chain saws, and on and on. A one-time purchase for many, sure, but a purchase.

The same thing occurs at grocery and chain stores where water, ice, batteries, canned goods, portable TVs and radios, insect repellents, portable lighting like lanterns and battery lamps, towels, and camping equipment are swept off the shelves.

Fast food demand skyrockets. Protected by their own generators for cooking and freezer units, McDonalds and Burger King build inventories and stay open round the clock. At least the fries and coffee are hot.

Home stores and hardware compete with the big boxes for some items but propane-operated grills, hibachi coal stoves, candles, sterno heater sets, and insulated coolers to protect meats until power returns are in demand.

Hotels and restaurants that were open filled quickly with repair workers and those who had to vacate their homes — all plus business.

Things Happen
Stores also lose their power. Employees have home damage and can’t come to work or have no way to get there. Power goes down and electronic transfer payments cease. Therefore, a need for plenty of cash arises, placing severe strain on local banks to provide it. Some gas stations actually did not know how to handle cash. Without electricity, they could not pump anyway.

Money comes out of savings for those who have savings. Others move to community shelters and rely on government to provide sustenance. New Orleans was the prime example of that situation. Florida was superbly organized from bottom up and top down. People were in place to do their job, as were supplies, shelters, and food. Consequently, Floridians returned to work quicker, were better protected, and government actually served well.

Hurricanes have good and bad qualities. They do not just materialize, as do earthquakes and tornados. They are a long time coming. This provides valuable preparation time, but is a form of Chinese water torture as they can delay, threaten, swerve, hit or miss, destroy, or leave.

Consumers and property owners invest money out of fear and in self-reliance. Storm shutters are installed, windows are better secured and strengthened, building codes are modified to meet stricter standards, and county and city officials beef up their Public Works Departments and lay in supplies in anticipation.

Is Florida still a great place to live or retire to? I'm writing this column on a beautiful early November day with sunny blue skies, full golf courses, most all retailers back in operation, and busy shoppers. I expect a similar picture when you read this in February. If it was not for a collection of blue tarps covering unpatched roofing holes and skeletons of pruned trees still alive, you might not know Katrina and Wilma stopped by to enjoy the Florida sunshine.

My northern-based friends concede the weather advantage but claim they’d prefer a little snow and cold to Wilma, playing golf only six to seven months a year on the home course, and snowbirding when roads freeze over in January. Bring your money baby. We need to pay for all our damage with bed and restaurant taxes, property tax without many services required, and impact fee charges for new construction.

I have attempted to depict a positive business situation out of serious and tragic circumstances. While some retailers have clearly prospered, families have lost their homes, businesses have been harmed, homes have been beaten up, insured homes have large deductibles, insurance premiums will soar, property is destroyed, and lives lost. Just as the Gulf Coast is bouncing back, so is South Florida.

John M. "Jack" EIkenberg is managing director of Eikenberg Management Services, a boutique consulting group that specializes in housewares and home strategic planning and operational improvement. E-mail is JMEmgmt@aol.com, phone 239-498-0040, fax 239-948-3297.







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