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Big Oil and Me

June 4, 2010

I have been debating for a week over what I should blog about this week. I finally made up my mind and got half way through the blog when I got a phone call from an outdoor specialty retailer on the Gulf Coast in Florida. His question to me and his state of mind made me stop writing in mid sentence and convinced my I had to say something about what the BP oil spill has done to the Gulf Coast.

I have been undecided about blogging about this because I have a feeling retailers across the country are tired of hearing about the catastrophes we have been dealing with down here. Between Hurricanes Ivan, Katrina, Rita, and Gustav, I am afraid you might think we are beginning to sound like whiney-hinnies. If so, perhaps you should read a little further and you might understand the state of mind of many retailers down here.

I have lived in Louisiana all of my life. Oil is the largest industry in our state followed closely by tourism and seafood. I cannot remember a worse day of oil industry news than April 20, 2010 when the Deepwater Horizon drilling rig exploded. The news of the explosion and resulting deaths of eleven brave people devastated everyone here. We all know someone who works in the oil industry. The death of eleven people brought home how hazardous this job is for our loved ones. Even as the unnecessary deaths captured our attention, BP was minimizing the size of the spill saying it was a few hundred barrels a day at the most.

As the days progressed, we all watched in amazement, then horror, as the reported size of the spill grew from a few hundred barrels to thousands of barrels a day. To show you how badly informed we were, I remember talking to a vendor up north about a week after the disaster. He asked me how we were coping with the oil spill. I told him I wasn't worried at all. After all, the rig was 23 miles off shore. How much oil could get to us from that far off? Pollyanna call home, your village is missing an idiot!

Over the past weeks, the spill has captured everyone's attention and had become the main headline for every media source. There isn't a day that goes by that a customer doesn't mention it to one of us. President Obama has made two trips here with another scheduled this week. Last night there was an article on NPR, in which three people in the seafood industry, a processor, a distribution, and a restaurateur, were interviewed. The seafood processor said he was doing about 25% of the business he did before the spill. The distributor said he was selling two cases of oysters per customer when he should have been selling 40. The restaurateur said the price of available oysters had gone from $0.22 each to $0.65 each. The worse part of it for him was no matter what the price of oysters, his customers were afraid to eat any seafood from Louisiana! Did I mention that seafood production and distribution is one of the largest industries in our state?

The outdoor specialty retailer who called me from the Florida Gulf Coast this morning had one question, "How has the spill affected my business?' And from the fear I could sense in his voice, I knew his business was being affected badly. He called me because he was trying to get a gauge of how his business was going to be affected. Badly, I think. Just this morning, Sam Champion and "Good Morning, America" broadcasted from Pensacola Beach. It was the same beach where I took an extended Memorial Day Vacation four days ago. During my stay, the beach and water were pristine. This morning, Sam was on picking up tar balls the size of a golf ball from a beach that had been clean as a whistle the night before.

My daughter, who will be visiting from Australia later this month called last night to ask me whether she would be able to visit Orange Beach, Alabama while she was here. She already had reservations at a condo; but, didn't want to go if her children weren't going to be able to go to the beach. Well, it looks like she is going to have to cancel her reservations. She represents several thousands of dollars that Orange Beach retailers won't see this year. Did I mention to you that tourism is one of the largest industries in our state?

Between hurricanes, bad economic times, and now the largest oil spill in the history of drilling, the Gulf Coast is in a mess. Florida retailers who had to deal with the housing crisis were just starting to recover. Many will have to shut their doors if tourists abandon them this summer. As I write this blog, BP has just finished placing a "top hat" on the "riser" (note: three weeks ago I thought a "top hat" was something Fred Astaire wore in the movies and a "riser" was something the members of a glee club stood on while performing). Let's hope it works not only my fellow retailers in the southeast but for our industry as a whole.

Yours in confused retailing, Bruce