Slip-and-fall lawsuits are expected to increase dramatically during the next few years as the U.S. baby-boomer population continues to age, according to a study by commercial insurer and property and casualty company CNA. (Older people are not only more likely to experience a slip-and-fall accident, but their injuries tend to be more significant, the study found.) The good news is that retailers can have a direct impact on the ultimate value and outcome of slip-and-fall accidents both before and after an accident happens, according to premises liability and accident prevention expert Dennis Fetzer.
“The impact before a fall happens has to do with having accident-prevention programs in place. There is zero cost for an accident that never happens,” said Fetzer, who heads up Fetzer Consulting, Boise, Idaho, and is a member of the National Floor Safety Institute board of directors. Fetzer retired as VP corporate liability for a nationwide supermarket chain after 20 years of service where he was responsible for all customer accident claims and litigation.
Entrance mats remain a critical weapon in slip-and-fall prevention.
“Entrance mats reduce up to 91% of dirt and moisture, while also reducing floor maintenance,” Fetzer said.
Caution cones, produce mats (where applicable), and floor sweeps and inspections should also be part of a retailer’s accident-prevention program. Store employees should be instructed as to the importance of filling out the logs accurately and on time.
“Sweep logs are legal documents that can be produced as evidence at trial that the store operator was exercising its duty of reasonable care,” he explained. “They can make the difference between a case you are able to defend in court and a case in which you end up having to make a payment.”
A properly maintained floor surface also figures prominently in reducing accidents.
“The floor should be maintained with NFSI (National Floor Safety Institute) approved cleaners and waxes and products that meet ANSI/NFSI B1101.1 wet slip resistant standards,” Fetzer said. “Using products that meet these standards can dramatically reduce slip-and-fall claims.”
POST ACCIDENT: The way a person is spoken to — what is said and what is not said — immediately after a slip-and-fall accident can influence how the incident turns out.
“I know of instances where customers who had fallen in a store were treated so rudely by store associates that it sent them straight to a lawyer,” Fetzer said. “Always treat injured customers with respect, let them know you care about them, and make them comfortable.”
Store associates and managers should never — for whatever reason — falsify or withhold information from claims management, Fetzer advised.
“All accidents need to be reported to claims management immediately,” he said. “It’s crucially important that everyone be fully forthcoming with a slip-and-fall investigation and answer all questions truthfully. The fact is, ultimately, the truth will come out.
Associates should follow all rules and procedures established by claims management for reporting and investigating accidents.
Stores should have clear-cut procedures in place for what to do when an accident occurs, including referring customer questions (about a fall) to claims management.
“For example, a question like ‘Are my bills going to be taken care of?’ should be referred to claims management,” Fetzer added.
Fire safety presents extra challenges to retail locations. Stores are filled with combustibles that aid the spread of fire and smoke. And confusing store layouts impede escape during emergencies. The results can be expensive: loss of revenue from store closures, and worse, loss of life.
Chain Store Age spoke with three leading fire safety experts as to what steps retailers could take to avert fire disasters. Here are their top 10 recommendations.
1. WATCH THE STOCK
One rule that is an absolute among fire codes nationwide is that racks and displays should not put merchandise within 18 ins. of a sprinkler head.
“Any closer than that and you will block the spray pattern, which should cover a diameter of 8 ft.,” said Mike Rose, CEO of Maspeth, N.Y.-based Academy Fire Protection, which serves some 140,000 retail locations nationwide.
Rose also advises store managers to regularly check that sprinkler concealer caps are in place. The caps prevent the heads from clogging, a special risk in clothing stores with lint in the air.
2. GET SMOKE DETECTORS OUT OF CORNERS
Place smoke detectors a minimum of 18 ins. away from corners. Heat rises — which is why these units are on the ceiling in the first place — but heat levels remain consistent in corners and push smoke away, rendering detectors ineffective.
3. CHECK EMERGENCY EXITS
“Badly maintained exits are something that make fire inspectors particularly nervous,“ said Gregory Harrington, a principal of the National Fire Protection Association in Quincy, Mass., which designs model codes for fire departments. “Open the doors. Make sure they are not locked or blocked. Personnel may decide to store boxes in back of a little-used doorway.”
Red “EXIT” signs over emergency exits should be lit 24-7.
4. CHANGE BATTERIES AFTER POWER OUTAGES
If your store loses power for an extended period, you need to check and most likely replace batteries in exit lights and alarms. Batteries are drained completely when power is out for two days. Building fire panels should also be checked since their motherboards could be fried by a current surge when power is restored.
5. MAINTAIN THREE-FOOT AISLES
Another nearly universal fire code standard is that store aisles need to be a minimum of 36 ins. wide. Limit in-aisle displays, which can block an aisle during evacuation.
6. INSPECT THE BACKROOM
Backrooms can be tinder boxes. Too much stock piled too high, oily rags on the floor, empty cardboard boxes and smoking employees all add up to danger. Walk backrooms occasionally with an eye to safety. Secure all flammable liquids in storage cabinets.
7. EXTINGUISHERS, ALL RISE!
All fire extinguishers must be hung on walls, not resting on floors. Although fire codes for checking extinguishers are loosely written, experts say they should be checked monthly.
8. DO BASIC EMPLOYEE TRAINING
Few fire codes require emergency training for store associates, but minimal emergency education can save lives and lawsuits. The basic message: “Get out fast!”
“Extinguishers last 12 to 15 seconds and aren’t going to do much in a big fire, so the main point of training should be to just get everybody out as quickly as possible,” Rose advised.
Employees should be instructed to check dressing rooms for customers while evacuating, and they should know the difference between red pull-boxes that trigger building alarms and red boxes with white stripes that alert the fire department.
9. HOLIDAY CONSIDERATIONS
Decorations hanging from the ceiling can spread fire quickly if ignited. They should be treated with a fire retardant spray. And watch how you manage extra stock, advised Lt. Tony Mancuso, director of the New York City Fire Department’s Fire Safety Education Unit, who performed inspections in the Herald Square retail district.
“We were usually very concerned about stock areas,“ he said. “Are they blocking aisles, and are they storing things in stairwells or near elevators?”
10. MIND THE KIDS
If your store caters to moms and kids, be sure there are no cleaning materials or open electrical sockets to which children might gain access.
“So many people child-proof their homes, but a lot of retailers fail to child-proof their stores,” Rose said.
Al Urbanski is a New York City-based freelance writer.
Growth Strategy: Mergers & Acquisitions
By Stephen Wyss
As retailers eye avenues for growth in 2012, mergers and acquisitions (M&A) will be a key area of interest and activity.
Our recent survey of 100 retail CFOs found that 52% believe most M&A activity in 2012 will be on the strategic side. Opportunities for strategic buyouts — both domestic and international — are ripe, and with many retailers reporting better-than-expected 2011 holiday figures in the U.S. market, some companies may be well-positioned to move forward with acquisitions.
Many domestic retailers recognize that they are overstored in the United States, and the international market presents the best opportunity for growth. As a result, we expect to see a continued focus on international expansion, particularly in the Asian markets, with U.S.-based companies pursuing deal opportunities both foreign and domestic, and foreign companies looking to take advantage of opportunities in the U.S. market. Companies that hold the potential to increase consumer loyalty, improve or establish efficient distribution channels, and provide enhanced global reach will be vied-for acquisition targets.
Strength of brand: Strength of brand will be especially important to M&A deals this year, particularly for strategic buyers. While we saw a lot of private equity buyouts in 2011, and there are indicators that private equity will continue to be very interested in the retail sector, we anticipate an uptick in strategic deals in 2012 as strong retailers look for opportunities to expand market share and enter into new markets.
An ideal target will have an enthusiastic and loyal consumer following and present an opportunity for the acquirer to integrate and synergize existing brands with those that are acquired. While a strong brand identity can pose challenges for integration, retailers recognize the value of a loyal customer base in an economy where consumers are increasingly forced to make choices between brands and limit their spending.
With the U.S. market largely saturated, an attractive target for a strategic buyout will give retailers opportunities to distribute products in new markets, both domestically and internationally. Gaining an international distribution channel is a huge revenue opportunity for domestic retailers, but it’s not the only important channel for growth. Our survey found that more than one-quarter of CFOs (29%) say e-commerce and mobile commerce will be their primary objectives for growth, as these channels offer potential for broadening distribution at a comparatively low risk. Retailers with developed online and mobile infrastructure and advanced technologies will be attractive targets.
Logistics: The economic downturn pushed retailers to be extremely diligent about cutting costs and improving supply chain efficiencies. This continues to be a key strategy to preserve margins and will be a considerable factor in M&A deals.
Retailers will look for acquisition targets that can be easily incorporated into the company logistics infrastructure or that have strong existing logistics capabilities to meet and push forward internal efficiency goals. Thus, a strong target will have robust logistics capabilities and solid vendor and supplier relationships in markets where the acquirer sees a potential for growth.
Risks: Those who have been enjoying the fruits of international expansion will see challenges from the economy in 2012, and there remain substantial risks for those looking to grow internationally.
Some European retailers, such as Next, the U.K.’s second-largest clothing retailer, saw disappointing holiday sales. This global environment represents both an opportunity and a risk for retailers looking to expand internationally, as foreign companies may be more open to strategic deals but international markets remain mercurial.
In addition to unpredictable markets on a global scale, a significant risk for companies looking toward international expansion in 2012 will be valuation. While valuations in the marketplace have stabilized, retailers still face challenges as they aim to get good pricing for acquisitions in the face of a volatile global economy.
Overall, we can expect to see significant changes in the retail landscape during 2012, both domestically and internationally.
Stephen Wyss is a partner in the retail and consumer products practice at BDO USA, LLP.