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KATRINA's IMPACT: Retail Generosity Tops $30 Million

Compassion has poured forth from many in the retailing community in the past week, demonstrating the industry's eagerness to do what it can to help the victims of Hurricane Katrina.

Meanwhile, recognizing the unpredictability of hurricanes, retailers on Florida's east coast were keeping an eye on Tropical Storm Ophelia yesterday. The storm is the latest threat in what has been only the first half of an expectedly rough hurricane season.

Industry-wide Response

The Food Marketing Institute in Washington reported this week that food retailers and wholesalers across America have already donated more than $20 million in financial support alone for Hurricane Katrina relief. They are also giving more than $10 million more in aid by way of goods, including truckloads of food, bottled water, ice, baby formula, diapers, paper towels, cleaning supplies, disinfectant, and personal hygiene items.

Some companies are using their distribution centers near the disaster areas to collect and deliver materials, dedicating trucks, drivers, transportation executives, and other employees to the relief effort.

And retailers are collecting millions more in contributions from customers through fundraising events, auctions, and checkout donations at more than 15,000 stores.

FMI is working with the government and manufacturers to ensure that victims receive relief in the most efficient and expeditious manner possible, according to FMI president and c.e.o. Tim Hammonds.

"We are keeping the Department of Homeland Security and Federal Emergency Preparedness Agency posted on our members' immediate needs in the area," Hammonds said. "We need to ensure that food trucks moving into areas now cordoned off receive their immediate attention."

Some of the latest examples of supermarkets and wholesalers pitching in include:

-- Keene, N.H.-based C&S Wholesale Grocers has donated 400,000 pounds of food and has provided an additional 600,000 pounds of products. The wholesaler has teamed with America's Second Harvest: The Nation's Food Bank Network, the American Red Cross, and FEMA.

C&S said it has been working since last week to contact approximately 100 employees in the area affected by the hurricane. The company's grocery and perishable foods distribution center in New Orleans was evacuated before the hurricane made land.

C&S joined America's Second Harvest and Federal Express in partnering with Oprah Winfrey to facilitate the purchase and distribution of nine truckloads of food and supplies. The effort was part of Winfrey's $1 million donation to help the rescue efforts.

-- Kansas City, Kan.-based Associated Wholesale Grocers said 18 of its independent members in Louisiana and Mississippi experienced prolonged power outages due to the storm. However, power is now restored to all the stores, Steve Dillard, v.p. of corporate sales, told Progressive Grocer. During the power outages, the wholesaler sent refrigerated trucks to its distribution center in South Haven, Miss. to keep perishable product from the affected stores at the proper temperature. The company also sent daily deliveries of other product to serve the stores' immediate needs.

In a cooperative-wide effort, the retail members of Associated Wholesale Grocers, along with their customers, are contributing to relief efforts. AWG is donating product, including water and pallets of canned food, to the American Red Cross to be used locally near its South Haven, Miss. distribution center for refugees staying in local shelters.

-- Asheville, N.C.-based Ingles Markets has teamed up with Hearts With Hands. The retailer supplied trucks and assistance to Hearts With Hands to collect community donations and provide storage. Together, the charity and Ingles have established a network of five collection points at Ingles stores across Buncombe County, with Ingles trucks on hand to collect and store the nonperishable donations until they are sent to the Gulf. An additional Ingles truck is located on the University of North Carolina -Asheville campus as a donation center.

In addition to its work with Hearts With Hands, Ingles has mobilized its stores across six states to provide local charitable organizations with a central location for distribution or donations.

-- Syracuse, N.Y.-based Penn Traffic is teaming up with the American Red Cross to let its shoppers donate to relief funds. Penn Traffic will match with a corporate donation up to $25,000 of the final total of funds raised.

-- Mill Valley, Calif.-based Mollie Stone's Markets, a Bay Area retailer, has established a special system at the registers in all its stores to allow customers to donate to the Red Cross Hurricane Katrina fund. Coinstar machines in Mollie Stone's stores also have a Red Cross donation button. All coins donated through Coinstar machines will not be charged a counting fee, and 100 percent of the donations made through Coinstar will be sent to the Red Cross.

-- Scarborough, Maine-based Hannaford Bros. Co. made a $250,000 donation to the American Red Cross Disaster Relief Fund in conjunction with sister companies Food Lion and Kash n' Karry/Sweetbay, all members of Delhaize America. In addition to the company's donation, Hannaford Supermarkets has established a fund-raising program at each of its 145 stores where customers can donate in any amount they choose at the registers. The program is scheduled to run through Sept. 17.

Dispatch from Baton Rouge

"The needs of the people displaced by the storm continue to grow and accelerate," said Jay Campbell, president and c.e.o. of Associated Grocers in Baton Rouge, La., in an update sent out by the National Grocers Association this week.

NGA noted that the USDA has authorized states to distribute new EBT cards that are pre-loaded with $50 of assistance to all displaced residents before their application for complete benefits has been processed.

Meanwhile, NGA said its Food For All Annual Holiday Program will be made available to all retail members at no charge, and that donations through the program will be directed at the discretion of each participating retail company -- including any of the Hurricane Katrina Relief Programs that are available.

Retailers Take Stock of Impact

Sanford, N.C.-based The Pantry, Inc., which operates stores near the Gulf Coast area, said the direct financial impact of Hurricane Katrina in terms of uninsured property losses or store closings in the affected areas has been minimal. "Our business has been affected more broadly by the nationwide disruption of gasoline supplies, but our contractual fuel supply agreements have enabled us so far to keep our stores relatively well-supplied. Our merchandise business continues to perform well," said president and c.e.o. Peter J. Sodini.

Prior to the hurricane, the company operated eight stores in Louisiana, 53 in Mississippi, and 24 in Alabama, but many of the locations are well inland or not in the direct path of the storm. Three stores were completely destroyed and a fourth was seriously damaged, however. At the peak of the hurricane, 47 stores were closed due to mandatory evacuations or loss of power. Earlier this week, six stores remained closed pending repairs and/or resumption of power. All of the company's stores are insured against losses due to property damage and business interruption, subject to a deductible, which in this case is estimated at less than $1 million.

Bentonville, Ark.-based Wal-Mart said in its latest update that of the 126 facilities that were originally shut down, 14 stores and clubs remain closed. Nine of its facilities have "major damage." The retailer is donating the use of 17 of its vacant facilities to various relief efforts and has provided product free of charge in hard-hit areas. Wal-Mart said it has been in touch with 87 percent of the more than 34,000 associates who were displaced by the hurricane. Displaced associates are eligible for up to $1,000 from Wal-Mart's associate disaster relief fund if their homes were flooded or destroyed. The company has already provided more than $3.6 million in associate relief.

Wal-Mart has also made its gift registry kiosks available for anyone displaced by the hurricane to sign up for items they need. People across the country can donate the items. The retailer said its online Emergency Contact Service has received more than 11,000 postings and more than 1 million hits.

Going Wireless

San Jose, Calif.-based VeriFone Holdings, Inc. said yesterday it donated 500 countertop and wireless payment systems to assist merchants. VeriFone is donating the systems through national credit card processor NOVA Information Systems (NOVA) to facilitate a new federal relief initiative that utilizes direct deposit and government-issued debit cards to distribute payments of $2,000 to impacted families.

"We applaud the U.S. government decision to utilize electronic payment systems as the speediest method of providing assistance to victims," said VeriFone chairman and c.e.o. Douglas G. Bergeron. "In an effort to facilitate use of the payment cards, VeriFone wants to equip merchants who are currently unable to process electronic transactions. Through NOVA, we will make available the best systems suited to individual merchant needs, including fully mobile, battery operated payment devices that utilize the cellular wireless networks."

FEMA said Wednesday it would provide $2,000 in assistance to affected families and distribute via electronic transfer individuals' bank accounts, special FEMA debit cards, or by check that can be delivered directly to individuals through the U.S. Postal Service. The new debit card option will benefit thousands of evacuees who may not have access to direct deposit banking, or are unable to receive checks.
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