Wal-Marts Response to Hurricane Katrina

Introduction
The Wal-Mart chain of stores and discount outlets was started by founder Sam Walton in 1962
with the opening of the first Wal-Mart store in Rogers, Arkansas. Over the next forty-five years,
Wal-Mart ballooned into the global powerhouse that exists today, boasting thousands of stores
throughout the world. World-wide, Wal-Mart employs over 1.9 million people.
Damage from the storm
Wal-Mart maintained hundreds of stores along in the Gulf Coast region when Katrina struck in
2005. These stores, which employed hundreds of people each, together provided over thirty-four
thousand jobs in the Gulf Coast area. Because of the sheer geographic span of the hurricanes
effects throughout the gulf coast, the event represented the single largest disaster the company
has ever endured in its decades of operation. Combined with Hurricanes Rita and Wilma, which
followed soon after, Wal-Mart calculated that the company sustained $40 million in losses due to
structure damages, business interruption, and looting.
At the height of the hurricane Wal-Mart oversaw the closure of 126 stores and two of its major
distribution centers. Of these facilities, over half lost power, and many were flooded. In total,
89 stores reported having sustained wind or water damage. Most were reopened within days or
weeks, though a handful required significant repair lasting several months.
Because of the run on emergency supplies in the affected areas, and in some cases because of
a breakdown in security, several of Wal-Marts stores were looted by hurricane victims. This
was most significant in New Orleans, where the company maintained 12 stores. Wal-Mart
elected to do nothing to prevent the looting in recognition that many (but not all) of the looters
were simply looking for needed recovery supplies.
Wal-Marts Pre-Disaster Response
Wal-Marts response to Hurricane Katrina began well before the storm made landfall on the Gulf
Coast. Because of the corporations massive size and worldwide reach, Wal-Mart maintains its
own 24-hour emergency operations center (EOC) staffed by up to ten employees during normal,
non-disaster situations (for the purpose of handling smaller scale events such as product failures,
injuries, fires, accidents, and other routine events). This center, which tracks storms with special
meteorological equipment and software maintained at the EOC, began its official response to
Katrina when it was upgraded from a tropical storm to a hurricane on August 24th.
On that first early day of the storms progression, Wal-Marts Business Continuity Director,
Jason Jackson, began managing the businesses response operations from the Wal-Mart EOC.
Over the course of the next few days, as Katrina made its pass over southern Florida and
continued on towards the heavily-populated Gulf Coast region, Jackson was joined by 50 WalMart managers and support personnel (ranging from trucking experts to loss-prevention

specialists) to reflect the seriousness of the response requirements. Wal-Mart CEO H. Lee Scott,
Jr., also began participating in the response by means of twice-daily conference calls, which
allowed him to help guide the companys response.
The companys Emergency Operations Team began their preparations for the storm in earnest by
initiating the movement of storm-readiness supplies and cleanup materials to Wal-Mart stores
and SAMS CLUBs both within and around the areas expected to be most severely affected. On
the Sunday before the storm made landfall on the Gulf Coast, Mr. Jackson also initiated delivery
of a variety of emergency supplies, from generators to dry ice to bottled water, to designated
staging areas so that company stores would be able to reopen quickly if predictions for disaster
were correct. Wal-Mart also considered the emergency supply needs of the customers which
differ significantly from normal shopping needs and which can be a vital factor in the ability to
recover and began pre-loading trucks at its various distribution centers with these items for
delivery to the most needed locations once those locations were known.

Wal-Marts Response during and after the Hurricane Made Landfall

One of Wal-Mart corporations greatest business process strengths, which it also used
extensively throughout the response to Hurricanes Katrina, Rita, and Wilma, is its vast system of
information management. This system, which was designed to ensure that the companys
nationwide inventory of products was accounted for and shifted in real time to reflect actual
demand, allowed the company to quickly locate and transport the most needed products to the
affected areas from its range of stores and warehouses. These pre-stock movements, which
included food, water, generators, and other appropriate relief and recovery supplies, began as
soon as the predicted track of Katrina was known to ensure that the products were in place before
travel to the affected sites became difficult or impossible.
During smaller hurricanes, Wal-Mart has provided disaster-related shipments averaging between
200 and 400 containers of goods, both for the purposes of sale and relief. Before, during, and
following Katrina, however, Wal-Mart shipped 2,500 containers to the region (in the first two
and a half weeks alone in comparison, Wal-Mart delivered a total of 517 containers in response
to the less destructive Hurricane Rita.) To assist the affected communities, Wal-Mart also
provided its drivers and trucks in special instances to acquire and transport relief supplies, water,
food and clothing donated by outside community members and organizations.
To ensure that all stores were able to benefit from this information network even those that
were in areas where communication failures were widespread - Wal-Mart set up satellite links
that provided reliable phone and Internet service. These connections permitted those stores to
stay connected to headquarters, allowing even those stores in areas that experienced several
weeks of power loss to keep key equipment and supplies in stock.
As the hurricane struck, many of the stores in the affected area lost contact with the companys
computerized inventory system. To accommodate this breakdown, the EOC staff began fielding
phone calls from stores about what they needed. A replenishment team was established to
reorder essential products on demand. By August 30th, hundreds of Wal-Mart deliveries (some
lead by police escort) were on their way to stores throughout the Gulf Coast region to address the
specific needs of those stores that had lost power (with supplies such as generators and dry ice).
On August 31st at 8 a.m., as New Orleans began to flood, Wal-Mart CEO H. Lee Scott Jr. called
an emergency meeting of the companys top officials and informed them about the response he
wanted to see, stating that he did not want a "measured response" to the hurricane. Over the next
few days, Wal-Mart's philanthropic response to Katrina would include $18 million in cash
donations, 100 truckloads of free merchandise, food for 100,000 meals and job security for all of
its displaced employees.
Relief and Recovery In-Kind and Cash Assistance
Wal-Mart provided over $3.5 million in hurricane relief and recovery assistance in the form of
products from its inventory and other products it acquired for use by victims. Much of this relief

assistance was delivered by Wal-Mart to established distribution points, staffed by local

emergency officials, the Salvation Army, the American Red Cross, or other organizations, and
included ice, water, and food.
With the protection and assistance of police escorts, Wal-Mart truck drivers delivered loads of
ice and water into New Orleans. Elsewhere, convoys of trucks carried critical supplies to
affected areas, with the makeup of the cargo dependant upon the needs of each destination, and
coordinated with National Guard distribution systems. To distribute those supplies, Wal-Mart
sent hundreds of associates (the term Wal-Mart uses for employees) to each location. In many
of the locations where trucks were sent, Wal-Mart provided the first relief assistance at mass care
staging sites, command centers and shelters. Recognizing the informational needs of disaster
victims, Wal-Mart also shipped 150 Internet-ready computers to shelters throughout the Gulf
Coast.
Wal-Marts disaster response and recovery efforts in the affected Gulf Coast regions were
focused in those areas where it could most effectively provide assistance. On September 1st,
for example, Wal-Mart began drawing up plans to establish mini-Wal-Mart stores in areas
impacted by the hurricane where access to needed recovery items did not exist. While these
stores charged customers for their purchases, many products (including clothing, diapers, baby
wipes, food, formula, toothbrushes, bedding and water) were given out free of charge to those
with a demonstrated need.
In Waveland, Mississippi, a mobile pharmacy was established when the Wal-Mart store located
there could not open because of damages sustained. Only three weeks after the storm had passed,
Wal-Mart established a 16,000 square foot tent store in Waveland. This facility, opened on
September 23rd, 2005, included large quantities of disaster-specific items. It also included a
Connection Center for victims to initiate cell phone service, a Kodak digital kiosk to help with
the search for missing persons, and a Tire Lube Express Center which helped manage the high
demand for tire repairs. The tent store, known as Wal-Mart Express, was reopened on
November 17 as a new concept store designed to meet the special needs of disaster-impacted
areas (see Appendix 2 for more information on the Wal-Mart Express concept.)
Wal-Mart also donated the use of more than 25 of their facilities that were vacant at the time.
These facilities, dispersed throughout the affected states, were used by emergency services as
evacuee shelters, supply depots and food pantries. One particular facility was used as a tent
city for utility crews, while another was transformed into an emergency dialysis clinic. In all
of these donated facilities, Wal-Mart provided all of the utilities (e.g., electricity, telephone,
heat, water, garbage removal) free of charge.
In the Houston area, Wal-Mart donated approximately $129,000 in merchandise to provide for
the mass-care needs of evacuees located at the Houston Astrodome. A donation center was set

up, staffed by two managers and 45 store employees, to distribute five truckloads of
merchandise, which included:

Poster boards, index cards, mops, trash bags, etc.

Beds for storm victims and volunteers
A computer and fax machine
A TV, VCR and childrens movies
Two members of Wal-Marts local management team and 45 associate volunteers who
were deployed to assist the Red Cross

Wal-Mart also delivered two truck loads of merchandise to the George R. Brown Convention
Center, which included:

Diapers
Formula
Undergarments
Sleeping bags
Baby beds
Office supplies (for doctors to use for storm victim triage)
20 pallet jacks (donated for use in moving donated goods)

Nationwide, Wal-Mart pharmacies filled prescriptions, free of charge, to evacuees with

emergency pharmaceutical needs, even if they did not have a copy of their prescription. Free
check cashing was also offered in 126 stores located in the hurricane-disaster area for the first
two-week after the hurricane hit, which included government, payroll and insurance checks and
computer-generated checks.
Other assistance provided to the affected communities included:

$20,000 in cash donations were given to assist various animal shelters and organizations
taking in lost animals in hurricane impacted areas
70 pallets of clothing were donated and shipped to World Vision's Gifts In Kind
Warehouse in Dallas to help evacuees
Donation centers were set up by Wal-Mart employees in various shelters to help arriving
evacuees in need of personal health and beauty products, clothing, diapers, wipes, tooth
brushes, as well as food and water (all products donated by Wal-Mart)
Wal-Mart partnered with CBS News' The Early Show and United Way of America to
sponsor "Wishes for Kids," a holiday toy drive, which allowed customers to purchase
items for the youngest children impacted by Hurricanes Katrina and Rita - more than
90,060 toys/books were purchased in this effort

Wal-Mart partnered with Clear Channel Radio and The Salvation Army to support "Gulf
Coast: Bicycles or Bust," a drive with the goal of raising money to purchase 100,000
bicycles for Gulf Coast children in communities impacted by Hurricanes Katrina and Rita

Wal-Mart Financial Assistance

Wal-Mart provided financial assistance to the communities that were affected by the storm,
and to their own employees in the affected areas, through the companys Wal-Mart
Foundation. Even before the Hurricane arrived, Wal-Mart announced that it would be
providing a cash contribution of $1 million to The Salvation Army to assist them in providing
pre-disaster support for whatever disaster relief assistance would be necessary. At that time,
the Salvation Army was in the midst of preparing to serve 400,000 meals per day to victims
and first responders through the use of 72 mobile canteens and two 54-foot mobile kitchens.
The Salvation Army was also deploying its comfort stations (which are facilities where
residents can wash their clothes or take a shower) and emergency response command stations
for
officers
to
direct
the
response
efforts.
On September 1st, just two days after the hurricane struck, Wal-Mart committed to a $15 million
donation to the hurricane relief fundraising effort led by Presidents Bush and Clinton. This large
donation was said to have helped jump start their efforts. These initial donations were followed
by subsequent donations of $1 million each to the American Red Cross and the Texas
Governors Relief Fund. In total, Wal-Mart contributed $18 million to the relief effort through
these channels.

Wal-Mart also encouraged the general public to contribute financially to the emergency relief
efforts by donating via its 3,800 stores and SAMS CLUBS and through its Web sites. Through
this effort, Wal-Mart raised an additional $8.5 million in public contributions made directly by
customers and employees. This money was administered directly to various relief and rebuilding
efforts as needs were determined by the Wal-Mart foundation. Wal-Marts cash funding to
support more directed relief and recovery efforts in the communities where Wal-Mart operated
was provided through distribution of this collected money. Examples of community-based
recipient organizations of Wal-Mart grants funded from the customer and employee emergency
relief fund, and the amount they received, include:

Cash donations totaling $20,000 to assist various animal shelters and organizations that
cared for lost animals in hurricane-impacted areas
Greater New Orleans, Inc., New Orleans - $50,000
Shiloh Missionary Baptist Church, Baton Rouge - $50,000
Cameron Parish Police Jury, Jennings - $100,000
Northshore Pelican Foundation, Covington - $100,000
Project Rebuild Plaquemines, Belle Chasse - $100,000

St. Bernard Parish Hurricane Relief Fund, St. Bernard Parish - $100,000
Thomas Jefferson Relief Fund, Marrero - $250,000
United Way Lake Charles, Lake Charles - $250,000
Americas New Orleans Fund, New Orleans - $500,000
Baton Rouge Area Foundation, Baton Rouge - $500,000
Louisiana Disaster Recovery Foundation, Inc., Baton Rouge - $500,000

Assistance to Employees
In the immediate aftermath of the hurricane, more than more than 34,000 Wal-Mart employees
were affected, either directly (because of injury or property damage) or indirectly (e.g., store
closings, loss of childcare services). Wal-Mart used the greatly up-scaled Emergency Operations
Center to establish an emergency information telephone line, which allowed the company to
make contact with almost 98% of their employees in order to verify safety and status.
To help more than 20,000 employees that were more significantly impacted by the hurricane,
Wal-Mart provided $14.5 million in cash grants. Under the employee assistance program that
was established, any displaced Wal-Mart employee was eligible for up to $1,000 from the
Associate Disaster Relief Fund if their homes were flooded or destroyed. The funding was
provided for the purpose of helping the employees to acquire basic necessities such as food,
shelter, clothing, etc.
Wal-Mart also provided employees with a quick injection of cash by providing them with their
salaries for the first three days after the hurricane, whether or not they were scheduled to work.
Any employees who were displaced by the storm were offered employment at any one WalMarts line of stores located close to their new location. Approximately 2,400 employees took
advantage of this offer, with some relocating as far away as California and Nevada (with the
majority choosing to relocate as close to home as possible).

Other relief and recovery efforts provided to employees include:

Medical and dental premiums were waived by the company during the initial pay period
for hourly employees in affected areas
Wal-Mart employees (including management) visited the Houston Astrodome and at the
George R. Brown Convention Center, waving signs and posting notices, in order to locate
fellow employees who had been evacuated to these mass-care shelters

The Online Emergency Registry

Using its acclaimed system of information and communications technology, Wal-Mart provided
customers and employees with an online emergency registry. A special web-based service was
established to help customers, employees, and the general public to access information and relief

services in the aftermath of Hurricane Katrina. Customers and employees were invited to email,
post and search for messages regarding family and friends. The service was also located on
every one of Wal-Marts many websites (including walmart.com, samsclub.com,
walmartstores.com, walmartfacts.com, and walmartfoundation.org). More than 50,000 people
accessed the message board in the weeks following the storm, and over 2.1 million people
viewed the site.
Wal-Mart expanded the reach and efficacy of the emergency information website by establishing
a missing persons board. In order to help family and friends locate victims, and to help victims
relay information to those searching for them, Wal-Mart provided a website where photos could
be uploaded, stored, and searched for free. Users who did not have internet access or the
appropriate scanning equipment at home or elsewhere were given free access through the use of
in-store photo processing kiosks. Wal-Mart also offered to take and post photographs of any
person who wanted to do so for needs related to reuniting families. Any of these photographs
could be accompanied by contact information to allow people who had seen or knew the
whereabouts of victims to pass on that information.
Another online and store-based service offered to employees, customers and the general public
was the online gift registry. Victims were invited to visit any of Wal-Marts various stores
and create a registered list of the items they wanted or needed to facilitate their recovery.
Friends, relatives, or strangers could search this registry and provide these desired items
directly to the victims. Wal-Mart provided this service via use of special hiring center kiosks,
connection center kiosks, and existing gift registry computers located at most of their stores.
The service was also located on Wal-Marts many websites. Within the first week, over 1,300
people had registered for recovery items they needed. Another related registry started by WalMart, called Wished for Kids, allowed customers to donate toys to child victims of Katrina,
Rita, and Wilma.