By Mariko Sanchanta
Toru Noda, the chief executive officer of Wal-Mart Japan Holdings, was on a flight back to Narita airport from Orlando, Fla.—fresh from Wal-Mart's annual manager's meeting—when the captain made an announcement 30 minutes before landing: There had been a massive earthquake and their flight was being rerouted to Hokkaido, the country's northernmost island.
The 50-year-old Mr. Noda was terrified. His wife and two children were in Tokyo when the quake hit. "It was only later that I realized it was up north," he said, dark circles under his eyes from exhaustion. After the plane landed at Chitose Airport in Hokkaido, Mr. Noda and his fellow passengers were stuck on the tarmac for nearly five hours with no phone reception. When they were finally allowed to deplane they spend the night at a hotel.
With all the Wal-Mart Stores Inc. managers at the Orlando meeting, there were no senior executives on the ground in Japan when the quake happened. Wal-Mart was facing a dire situation: 24 of its 414 Seiyu stores—as Wal-Mart's Japanese chain is called—were in the Sendai and Fukushima area in northern Japan, close to the epicenter. Stores were trashed as goods fell off shelves during the temblor. A massive power outage ensued. Two stores suffered extensive quake damage. Close to 2,000 employees worked in the stricken region and were unaccounted for.
On Saturday morning, the day after the quake, Mr. Noda rushed to get on the first flight to Haneda Airport, in Tokyo. From there, he grabbed a cab and headed straight to Wal-Mart's offices, located in a squat concrete block in Akabane, northern Tokyo. Mr. Noda immediately oversaw a 1 p.m. meeting with two dozen team leaders. For the next 48 hours, he and his team essentially lived in the office: The office couch became his bed for two nights. He didn't speak to his family until Saturday night.
Meanwhile, shelves were bare at its stores in the Tokyo area on the Saturday as people rushed to buy essentials: milk, bread, rice. "I went into the Seiyu store in Chofu [in western Tokyo] on the Saturday after the quake and the shelves were empty," said Yumiko Yoshioka, a housewife and the mother of two young children.
"The supply chain across all of Japan was interrupted. You had panic buying going on in Tokyo, where there was no earthquake. The shelves were stripped bare," said Scott Price, the president and chief executive officer of Wal-Mart Asia. "I've never seen anything like it in my life. We were facing a huge challenge."
As the world's largest retailer, with more than 8,300 stores in 15 countries, Wal-Mart has become adept at responding to natural disasters—sometimes more quickly than governments, most notably during Hurricane Katrina, the costliest natural disaster in U.S. history. The retailer coordinates emergency response operations from its headquarters in Bentonville, where a team of experts that includes a meteorologist sizes up potential threats and works with local and national governments and aid groups on contingency plans.
Wal-Mart's stores in the Sendai and Fukushima regions sold out of inventory within two days of the quake. Wal-Mart set up supply trucks to ferry more goods to the north, but there was a huge problem: procuring gasoline, given the shortages nationwide. "We had to come up with some extremely creative ways of getting fuel," said Mr. Price. Eventually, someone at Wal-Mart in Japan learned a multinational had decided to close operations in Japan, enabling Wal-Mart to buy its existing gasoline supply.
Meanwhile, by Sunday morning, Wal-Mart realized that relief supplies weren't getting to survivors and that it had to act. Mr. Price, who joined Wal-Mart in 2009 after a long career with DHL, got in touch with some former colleagues at the delivery company. They managed to secure a plane, filling it with 10 tons of water, flashlights, batteries, some food items, and packed it by Tuesday, March 15. It landed on Wednesday afternoon, March 16, at Narita. The same day, the US Air Force helped deliver some of the water to the affected region.
By Friday, March 18, Wal-Mart had confirmed that 1,885 employees out of 1,889 in the quake-hit region were safe. But two days later, it received word that Kimino Sasaki, a worker at one if its factories in Sendai, had died in the tsunami. The following day, Wal-Mart was able to confirm the safety of the remaining workers.
"Japan has lost a lot of lives. It is a huge, huge issue for a long time to come," said Mr. Noda, who is fluent in English. "This event has definitely brought people closer together in Japan."
It will take weeks, if not months, for Wal-Mart and other retailers to get operations back to normal. The U.S. retailer had just turned a corner in Japan, after reporting losses for seven straight years after having entered the market in 2002. With its 414 stores, Japan represents Wal-Mart's biggest investment in Asia.
On Wednesday, a week and a half after the quake, many shelves at its store in Akabane were empty: no milk, no yogurt, though there was bread and rice. The latest food-related scare in Tokyo, high levels of iodine in tap water, have led to a run on bottled water.
"The issue now is demand and supply," says Mr. Noda. "We receive less. Dairy and natto [fermented soy beans] will remain an issue for a while."
But the retailer's top management is sanguine that some good will come out of this catastrophe. "I know [Japan] will come out of this stronger," says Mr. Price, who has lived in Japan and is married to a Japanese woman. "I hope the government sees this as an opportunity to right some wrongs and to invest wisely and to put their effort behind things to change the country for good. I think it will."
