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Editorial Comment — October 2019

Year-End …

Year-end is just around the corner for the Defense Commissary Agency.

The corner is lower than it was at this time last year. This has been a year that continues to see commissary sales decline by about $465,000 a day, with about 6,600 fewer daily transactions.

Exchanges, after holding their own during the turmoil of fiscal 2018, are nearly through their third quarter, with mixed results. The Defense Department’s three exchange systems, enmeshed in merger plan maneuvers, are collectively down more than 3 percent, while the Coast Guard Exchange and VCS PatriotStores show upticks of 2.7 and 5 percent respectively.

What military resale will look like a year from now is still up in the air.

The stakeholders — suppliers and service providers, retailers and patrons — share anxiety in an air of uncertainty while their fate is decided at the Pentagon and the Capitol.

Deputy Defense Secretary David Norquist has approved the Pentagon’s business case analysis for military resale consolidation, sending it with his report to the Congressional Armed Services Committees on Capitol Hill, where the Government Accountability Office has already begun to gather facts and figures for the committees, investigating resale business operations reform efforts.

For suppliers, beyond the problems of how to do more with less, due to staffing cuts; how to find funds for product promotions or for travel; how to cut costs to stay in business; how to explain to the front office or corporate what’s going on … beyond the hopes of potential sales increases (and a bonus, or a raise) … lurks the question, “Will I even have a job next year?”

For executives, managers and operators in the resale systems, beyond the problems of dealing with drastic changes and possibly even further drastic changes in processes, technology and organization … lurks the question, “Will I even have a job next year?”

Much of the answer depends upon the patrons … who even more than suppliers and service providers seem to have been neglected in the transformation decision process and must be shopping elsewhere.

This observation is particularly puzzling in light of DeCA’s recent report that details savings of 26 percent globally to be had by shopping in the commissary, up from a baseline of 23.7 percent globally set by regional pricing comparisons in 2016, but considerably below the long-touted commissary 30 percent savings, calculated using a different methodology.

The continuing commissary sales decline, as savings percentages reportedly increase, calls into question the military family’s long-standing reputation as savvy shoppers. Savvy shoppers would not be expected to increasingly shop elsewhere when they could be spending less than three-quarters as much for their food bills by shopping in the commissary.

Are there discrepancies between the products compared in the representative market basket and the products patrons really want to buy?

Is there a problem with patron perception? Most every supermarket these days shows a percentage of savings on the cash register tape, and depending upon the shopper’s buying habits, those percentages are often considerably higher than 26 percent … but the comparison is only to that market’s regular prices. DeCA’s savings percentage, of course, is a comparison to all other area markets’ regular, or sale, prices.

Are commissary shoppers finding fewer of the products they’re looking for on the shelves, or too often just few products on the shelves at all?

Might there perhaps be a disconnect between methodology and actual dollars spent?

Though the usual suspects … repeated deployments, shopping doldrums … might be strong factors, the progressing YTD exchange sales results are perhaps even more puzzling.

Is the transformation process that has had a dreadful effect upon DeCA already showing signs of having the same impact on exchange system sales, even before merger machinery gears up to jam the elements together?

Perhaps the GAO assessment may turn up interesting answers to this as well as to many other questions.

Yes, what military resale will look like a year from now is still very much up in the air.

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