7-Eleven To Put Y2K on the Shelf
Washington Post
Stores to promote items to prepare for emergencies
Sometime in December, 7-Eleven employees plan to remove the promotional signs for
Colombian coffee from stores and replace them with banners that go something like this:
Y2K Ready -- 4U!
Inside, customers will find shelves bulging with extra quantities of bottled water, canned
tuna, candles, flashlights and videos that explain how to prepare for power outages and
other emergencies that may erupt when the year 2000 begins.
Virtually alone among major retailers, 7-Eleven Inc. is preparing to cash in on
consumers' fears about possible computer failures linked to the beginning of the new
century.
''We started out several months ago thinking about the Y2K problem,'' said James W.
Keyes, chief operating officer of 7-Eleven Inc. ''We've gone from that to realizing this
may be the single biggest opportunity we've ever had. It has gone from a Y2K problem
to a Y2K opportunity.''
The preparations don't stop with essential consumables, going into the stores beginning
in November. In case there's a run on champagne by fin de siecle partyers, the
nation's biggest chain of convenience stores will have its own private label of bubbly on
hand. And if consumers rush the gas pumps, the retailer says it will have gasoline tanker
trucks on standby.
Whether 7-Eleven is remembered as the retailer that boldly cashed in on Y2K fears and
revelry -- or got stuck with millions of unsold rolls of toilet paper and $6.99 bottles of
champagne -- has yet to be determined.
Such is the problem of predicting behavior in December, when the year 2000
phenomenon meets the hectic holiday shopping period, creating the potential for a crush
of last-minute buying and possibly the biggest headache ever for the nation's retailers.
''I think it's going to be ugly,'' said Cathy Hotka, vice president for information
technology at the National Retail Federation. ''The message we've had for consumers:
Please buy some stuff, but buy it now.''
Jammed lines
Business and government leaders have warned that consumers jamming gasoline pumps
and checkout lines, and hoarding food and medicines, could create more problems than
any technological failures from year 2000 computer breakdowns. So the biggest retail
chains are treading carefully, quietly boosting inventories of such items as batteries while
telling customers to keep cool.
''Retailers and manufacturers do not want to be perceived as fanning the flames of
customer panic,'' Hotka said. ''So far, there has been no panic. But retailers know if
they tamper with customers' buying models, they could end up with a wacky buying
season.''
In fact, Wal-Mart Stores Inc., Home Depot Inc. and other large retailers don't want
consumers snapping up generators, tents or anything else that might be returned after
Jan. 1, Hotka said.
But 7-Eleven executives say they have little to lose. If widespread power failures occur,
the retailer trumps its competitors. If customers overreact, 7-Eleven isn't overly worried
because few people return convenience-store items.
Retail analysts say the chain runs the risk that first-quarter sales next year will slump if
nothing happens and its stores are overstocked. But 7-Eleven officials say they're
confident consumer demand will be strong enough to absorb any excess inventories after
Jan. 1 before it suffers losses.
''If we're really clever, we have a shot at 50 million people coming through our doors''
between midnight of New Year's Eve and midnight New Year's Day, said Keyes. ''It
has the potential to be our biggest selling day.''
Most big retailers are selling year 2000 memorabilia and party supplies but remain
tight-lipped about how they'll prepare for possible customer hoarding. None is actively
marketing the year 2000 event the way 7-Eleven executives plan to do it, Hotka said.
''They've got the field to themselves.''
Robert F. Dyer, a marketing professor at George Washington University, called
7-Eleven's approach ''questionable'' and wondered whether its Y2K banners might be
too provoking.
''The implication is, get ready for a problem,'' Dyer said.
But Hotka said it's a ''smart'' campaign that doesn't cross the line.
In fact, some analysts believe 7-Eleven may be setting a good example for an industry
that generally has kept quiet about Y2K preparations.
Going to the fringes
''If the mainstream does not participate in the debate, people who want information are
forced to go to the fringes,'' said David Kessler, executive administrator for the Center
for Millennial Studies at Boston University. ''If these organizations are smart, what
they'll do is put out a statement in plain English about their stance.''
By detailing its plans, 7-Eleven hopes to draw more people into its 18,500
company-owned and franchised convenience stores beginning this November.
Christmas Day is its busiest of the year, and 7-Eleven expects record-breaking sales this
New Year's Eve.
This December, the company expects to sell twice as much bottled water as it does in the
current peak month, July, and 1.1 million battery units, compared with 750,000 in
December 1998.
Stores will be asked to stock four shelves of bottled water in various sizes, plus extra
logs, batteries, flashlights, first-aid kits, ice chests and chlorine bleach. About 25 percent
more grocery items will be ordered. Four times as many newspapers will be carried on
New Year's Eve and Day, because many people will want souvenirs.
The company is stocking up on coffee, which its outlets will offer free all night. And all
stores will have cellular phones, in case of power outages. Headquarters staff will be
working at a command center -- the champagne on ice just a few feet away.
''We're hoping everything is peaceful and calm as can be,'' Keyes said. ''We'll have
twice the reason to celebrate.''
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