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Retailer Readies for Pandemic

By Pamela Babcock  10/20/2009
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NEW YORK—The Macy’s Thanksgiving Day parade may be legendary and predictable—it comes once a year. But behind the scenes, the Cincinnati-based company is gearing up for a decidedly more serious and uncontrollable event: pandemic flu.

“From a basic response perspective and from a business continuity perspective, you’re always taught to plan for the worst,” said David Hosier, senior manager of business resiliency for Macy’s, to attendees at The Conference Board’s Corporate Security, Business Continuity and Crisis Management Conference on Oct. 15, 2009. In Macy’s case, the April World Health Organization’s (WHO) elevation to Phase 6 “could not have come at a worse time.”

The company was in the process of consolidating several divisions. Key stakeholders and managers involved in Macy’s original planning were no longer in the same roles or had left. The company had based its preparedness plans on WHO phases, but quickly learned that the phases “were not effective triggers” and that the company needed to monitor and respond locally, Hosier said.

Nationwide Reach, Local Focus

Macy’s has 167,000 employees working in 850 department stores in 45 states, Guam, Puerto Rico and Washington D.C. The company includes Bloomingdale’s stores, Macy’s stores and support divisions.

Macy’s began planning for a pandemic in 2005. At the time, the company had seven retail divisions and more than 500 stores. Divisions were autonomous.

“It was a challenge to develop consistent policies and procedures,” noted Shirley Ono, manager of business continuity for Macy’s, who is based in San Francisco.

The company formed three groups: Corporate set all emergency policies, while retail stores identified individual issues and came up with the minimum number of employees needed per store. The support division took on the issues of critical employees working from home, call-center social distancing and redirecting merchandise if distribution centers or stores close temporarily, Ono said.

Macy’s piloted Purell Sanitation Stations in key stores, hired an environmental company to analyze store surfaces—including cash registers—and the best way to clean them, and checked with housekeeping vendors “to make sure they had plans [for] a pandemic situation,” Ono said.

The company categorized divisional office employees into critical, non-critical and those who could work from home. The company also offered free flu vaccines to employees. Things Macy’s didn’t do: purchase masks or antiviral medications.

What They Learned

Timing is everything. Hosier said Macy’s timing couldn’t have been worse. Consolidation efforts were due to be completed by May 10, and key policy development leaders had changed. Draft policies had been created, pending finalization. The company also needed to re-educate senior management and reinvented its communication tree due to consolidation.

Create a focused response. Macy’s educated employees about H1N1 and planned for large absences, which did not occur. It discontinued travel to Mexico in April and implemented a return-to-work policy, which required ill employees to work from home for 10 days. Macy’s also implemented absence-tracking companywide.

State and local health departments are valuable but overwhelmed resources. Since WHO levels were not effective triggers, Macy’s has found that state and local health departments can help decide when to activate pandemic plans. But many departments were experiencing layoffs due to the economic downturn, so contacts were no longer available. Others were overwhelmed and couldn’t return calls, Hosier said.

Benchmark and talk to other companies. Retail federations can provide generic information, but if you can get in touch with the right person at another company—even a competitor—“you can get all the answers you want. We’ve reached out to 20 retailers in our silo plus in the grocery and pharmaceutical industries to compare where we are and what kind of triggers we’re going to use,” Hosier said.

What Macy's Recommends

Hosier said the following are key to pandemic planning:

  • Know critical business functions.
  • Identify minimal staffing levels and determine if work can be performed remotely.
  • Have IT infrastructure to support remote work or telecommuting options.
  • Be prepared to track illnesses.
  • Ensure that all relevant HR policies are in place and encourage employees to stay home if ill without fear of losing their job. 
  • Be flexible and adjust plans based on levels of severity.
  • Remind all employees that “good hygiene practices are a must.”

 Pamela Babcock is a freelance writer based in the New York City area.


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