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E and C NEWS

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Highlights of the April 2015 Issue


MacArthur Named Vice Chair, HASC Personnel Subcommittee


• WASHINGTON — On Feb. 12, Rep. Tom C. MacArthur (RN. J.) was named as the vice chairman of the House Armed Services Committee (HASC) Military Personnel Subcommittee. MacArthur was one of six HASC subcommittee vice chairs chosen by HASC Chairman Rep. Mac Thornberry .

“I’m honored to have been named to this leadership role on the Military Personnel Subcommittee,” MacArthur noted. “Caring for the men and women who serve our country is critically important. I look forward to working with the Subcommittee to find ways we can efficiently spend taxpayer dollars to give our armed forces the best possible care, and ensure our readiness to respond to whatever arises. ...

Early Reports: For-Profit Pricing Incompatible with Viable Commissary Benefit


• WASHINGTON — As this issue went to press, two separate publicly available reports, including one released by an organization with a wealth of military experience and expertise, the RAND Corporation, found that raising prices in commissaries is unlikely to succeed as a strategy to recoup system operating costs, and could instead be expected to cause many patrons to abandon commissaries, also resulting in fewer patron trips to other on-base resale systems.

A second report by the Business Executives for National Security (BENS) Military Retirement & Benefits Modernization Task Force (MRBMTF) also found that ceasing to fund annual military commissary appropriations was essentially incompatible with providing at-cost pricing in commissaries for military families and other eligible patrons. ...

DeCA Makes SD Personnel, Category Alignment Changes


• FORT LEE — On March 31, the Defense Commissary Agency (DeCA) announced several Sales Directorate (SD) category manager changes that also impact zone manager and store director leadership roles throughout the agency.

In addition, the agency has also implemented several category alignment updates that reallocate a variety of subcategories among several category managers. ...

Effective April 5, Hector Granado was named category manager, responsible for Pet Food and Household Products. He fills a previously vacant position that had been handled by James Taylor, who recently became the category manager for Frozen Foods. In the interim period preceding Granado’s appointment, Rena Dial, category manager for Paper and Laundry, had taken on the additional Pet Food and Household Products responsibilities on a temporary basis. ...

AAFES Position Paper Identifies Greater, Faster Non-merger Savings


• DALLAS — In a Feb. 9 position paper, the Army and Air Force Exchange Service (AAFES) questioned various assumptions contained within the Military Compensation and Retirement Modernization Commission’s (MCRMC) proposed consolidation of exchanges and commissaries, and recast various concepts from the MCRMC final report with a view toward more rapid and cost-effective savings initiatives.

The position paper focused on the following three main points: that substantial benefits can be achieved without a four-system merger; that the anticipated benefits of consolidation are out of synch with known benchmarks; and that the payback time to recoup the return on merger costs would be inordinate. ...

Read more NEWS ...



• DALLAS — A trio of winners were recently named in the Army & Air Force Exchange Service’s (AAFES) “Proud To Serve” essay contest, and two more winners were named in the “Spend Free Spree” contest. Both competitions were part of the “Because of You” campaign, a year-long effort to recognize and reward servicemembers’ sacrifice and dedication to our country.


Maj. Chris Hormel, USA, who serves with the 18th Military Police Brigade at USAG Bavaria, Grafenwoehr, Germany, won the essay contest’s grand prize, a $10,000 Exchange gift card. ...

Tech Sgt. Nicholas Lakey, USAF, who serves at Aviano AB, Italy, took second place and a $5,000 Exchange gift card in the essay contest. ...


Retired Coast Guard Chief Petty Officer Gregory Woodward claimed the grand prize — a $10,000 Exchange gift card — in the Spend Free Spree contest. ...

In addition, retired Air Force Maj. Gerald Daub received a $2,000 Exchange gift card, the secondplace prize in the Spend Free Spree contest. ...

Read the complete AAFES CONTEST WINNERS ...

Providing ‘The Best Commissary Benefit Possible’


Rogers E. Campbell, Executive Director, Sales, Marketing and Policy Group
Despite some strong headwinds in fiscal 2014, military shoppers have voted with their feet to take advantage of their grocery shopping benefit. Together, commissary patrons produced 89.6 million transactions in fiscal 2014, based on sales of $5.7 billion, and had pushed sales and transactions higher through February of fiscal 2015, versus the same period the previous year.

What’s in store for the commissary in 2015 and beyond? In this exclusive interview with E and C News, Rogers E. Campbell, SES, talks about the recent Sales Directorate (SD) reorganization, the new category management system, hybrid stores, enhanced club-packs, Click2Go curbside ordering, and the Value Brand program, and other recent initiatives the SD is exploring to help the agency provide a stronger benefit to commissary patrons in the years to come.

E and C News: What are some of the initiatives the SD has introduced during the past year?
ROGERS E. CAMPBELL: Over the last year, we finalized the reorganization of the Sales Directorate. By realigning our category management process, we have positioned the agency to ensure the commissary benefit and its savings remain relevant to our patrons. We are committed to this goal.

To ensure our category management team members are equipped with the best possible skill sets, mirroring retail, the agency has invested in category management training. To date [through mid-March 2015], over 60 percent of our category management team members have fully achieved their certification in category management, to include seven of our category managers. Our goal is to reach 100 percent by October 2015.

Finally, we were very proud to reintroduce the Value Brand program. This program was re-energized in December 2014, and aims at satisfying patrons’ growing demand for value-priced products. Store and private label brands now comprise about 17 percent to 24 percent of dollar sales in retail, and we want our patrons to know commissaries have always offered, and will continue to offer, brand name products that favorably compare with private label and store brands.


DeCA Q&A: New Outlook On Standards and Systems


DeCA Deputy Sales Director Gordon Jones
Defense Commissary Agency (DeCA) Deputy Sales Director Gordon Jones has come full circle with DeCA’s business systems, including some of the complex and effective capabilities he helped set up more than a decade ago. Today, Jones is helping prepare the way for the Sales Directorate’s adoption of its next generation enterprise systems by developing and deploying standardized methods and processes for category reviews, stock assortment selection and promotional management.

E and C News: As deputy sales director, what are your priorities for the smooth running of the SD, and the implementation of programs? What is your role in coordinating promotions among the category managers?

Gordon Jones: I see my key role as a facilitator to our category managers by helping them get the tools, resources and support they need so they can do their jobs effectively. I also see my role as providing them with information from command and within the building regarding strategic direction, issues, concerns and opportunities.

As a result, Sales Director Tracie Russ and I regularly spend time coordinating with and talking to Store Operations, Logistics, Resource Management, as well as other directorates within the Sales, Marketing and Policy Group.


2014 SALES BY CATEGORY: DeCA vs. Civilian Supermarkets


Data reported in the following tables is based on total sales of scannable items in “supermarket” categories maintained and captured by The Nielsen Company. Nielsen has a contract to supply the Defense Commissary Agency (DeCA) with data on category sales as well as on a variety of other retail data.

Read more 2014 SALES BY CATEGORY ...



The hot summer months of June, July, August and September typically generate strong demand for thirst-quenching non-alcoholic beverages. Within the military community, this is magnified by the 18-24 year old demographic on active duty for whom proper hydration is critical to health and performance. Defense Commissary Agency (DeCA) stores supply a carefully selected assortment of products to meet all patrons’ personal needs in these regards.

Michelle Frost, the agency’s category manager handling beverages, reported that sales of selected non-alcoholic thirst quenchers were $124.6 million during the June through September time frame in fiscal 2014. Although soft drinks continued to be the top sales producer, other non-alcoholic beverages subcategories also posted impressive sales figures during this time frame. …


AAFES SUMMER BEVERAGES: Keeping the HEAT on COOL Summer Beverages


Posting nearly $87 million in sales of nonalcoholic beverages during the all-important summer months of June, July, August and September, Army & Air Force Exchange Service (AAFES) Senior Non-Alcoholic Beverages Buyer Adrienne Townes is keenly focused on keeping patrons properly hydrated during the hotter summer months, whether after drill, a trip to the gym, a day at the beach or any other thirst-inducing occasion.

The buyer noted that in terms of dollar volume, energy drinks remained the top sellers among nonalcoholic beverages during the four-month 2014 summer period.

‘There are a lot of opportunities to clean up the assortment and focus on the brands that are providing the best return for our business. We are creating a core assortment to be used in the planograms, and that will be communicated so that our stores know which items they should be carrying.’

— Adrienne Townes, Senior Buyer, Non-Alcoholic Beverages, Merchandising Directorate


DeCA PRODUCE: Better for You Options From Wall to Wall


Produce is not only the most colorful department in local Defense Commissary Agency (DeCA) stores, it is a major sales generator for the agency, with a wealth of initiatives in tow to keep it is as resilient as possible through fiscal 2015.

Bridget Bennett, DeCA’s category manager responsible for this department, reported that overall tonnage and units of fresh fruits and vegetables (FF&V) and other items sold in the DeCA produce department “are showing a positive growth trend” through January 2015, sporting increases in both sales (3.15 percent) and units (1.42 percent).

“As health conscious consumers look for better options for snacking and make-at-home meal ingredients, produce department sales should continue to grow,” she noted. “Value-added convenience items that reduce preparation time, organic, and local will lead category growth into 2015.”


AAFES SNACKS: Assortment Shaped to Fit Customer Needs


The snack assortment featured in Army & Air Force Exchange Service (AAFES) stores has enough variety to satisfy just about any crunchy craving imaginable. Providing both established and healthier eating options, the exchange service’s snack assortment is shaped to fit the ever-changing requirements of its customers, whether they demand a tried and trusted top seller or something with an excitingly new flavor profile.

Exchange Snack Buyer Melissa Kitchen reported that category sales during fiscal 2014 were approximately $90 million, down 2 percent from the prior year.

For fiscal 2015, however, she said AAFES is planning for snacks to be up 2 percent in sales as it adapts to changing customer requirements. “We look at all factors affecting the business, and make adjustments accordingly,” Kitchen noted. “Healthier snack options are a big focus at the Exchange. Healthy and on-the-go snack options are on trend and sales at the Exchange in these two areas are up compared to the prior year.”


DeCA CANDY MERCHANDISING: Strategic Placement For Impact and Velocity

Although candy is one of the top-10 selling categories in the nonperishable/semiperishable segment in terms of dollar volume in Defense Commissary Agency (DeCA) stores, generating more than $65 million in 2014, according to Nielsen Company data, its placement at multiple points along the patron’s journey through the store — on gondolas, pallets, at the front-end, on end caps or other types of strategically placed displays — has long been an important component of successful candy merchandising.

According to Joel Small, merchandising specialist responsible for bread and snacks in the agency’s Sales Directorate (SD), the location in a store where customers can find their favorite candy can have a marked impact on sales velocity.

“Placement of candy on the gondola/aisle shelving is based on the segment of the particular packaging,” he noted. “Segments include ‘Premium;’ ‘Candy Dish;’ ‘Stand Up Bags (SUB);’ ‘Multi-Packs;’ ‘Fun Sized;’ and ‘Sugar Free.’ Additionally, ‘Non- Chocolate’ candy, along with gum and mints, are merchandised in their own segment in the candy section.




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