Inside the Story of How H-E-B Planned for the Pandemic

This is an in-depth story about how preparedness for large scale crisis, and specifically pandemics, works. This is an excerpt from the full article. Click on the link to read the full story.

From The Texas Monthly By Dan Solomon and Paula Forbes

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. READ THE FULL STORY HERE. 

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.

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.

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.

READ THE REST OF THE STORY HERE

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