A Question of Savings …

E and C NEWS

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Highlights of the February 2017 Issue




As the Army & Air Force Exchange Service (AAFES) team comes together for the 2017 Main Store Manager/General Manager (MSM/GM) Conference in Frisco, Texas, participants will learn about the ways AAFES is transforming the store experience and its vision for serving patrons in the Age of the Customer. Tom Shull, Exchange director and chief executive officer (CEO), and senior exchange service executives provide a bird’s-eye view of their respective areas of operation and how they are adapting to current retail trends, all to better serve servicemembers and their families.

Six Keys to Protecting and Preserving the Exchange Benefit


Tom Shull, Director and Chief Executive Officer (CEO)

Committed to ‘Family Serving Family’


Michael Immler, Deputy Director

Communicating the Mission


Chief Master Sgt. Luis Reyes, USAF, Senior Enlisted Advisor

‘… Where We Need to Go’


Dave Nelson, Executive Vice President and Chief Operating Officer (COO)

Read more AFFES MSM/GM ...

AFFES MSM/GM:Plans and Programs
The Next Level Of Shopping Experience


Ana Middleton, President and Chief Merchandising Officer (CMO)

‘Family Serving Family’ Where They Live, Work and Play


Trinidad “Trini” Saucedo, Senior Vice President (SVP), Services and Food Directorate

Retaining Relevancy With the Customer in Softlines


Tamson “Tammie” Shelmire, Vice President (VP), Main Store Softlines Division

Creating New Ways To Enhance the Customer Experience


Karen Cardin, Senior Vice President (SVP), eCommerce

Ensuring the Best Product Offerings for Our Customers


Sean Shaw, Vice President (VP), Convenience Channel Division

Welcome Home to Hardlines


Chris Burton, Vice President (VP), Main Store Hardlines Division

The Age of the Customer


Eric Sidman, Vice President (VP), Store Experience and Design


Read More AAFES MSM/GM Plans and Programs ...



Tillis to Lead SASC Subcommittee’s Oversight of Resale

• WASHINGTON — The Senate Subcommittee that oversees commissaries and exchanges will have a new chairman in the 115th Congress. On Jan. 18, 2017, Senator Thom Tillis (R-N.C.) was selected to serve as the chairman of the Senate Armed Services Committee’s (SASC) Subcommittee on Personnel, replacing long-time chair Lindsey Graham (R-S.C.). Tillis also sits on the Senate Judiciary Committee, the Banking, Housing and Urban Affairs Committee, and the Veterans’ Affairs Committee, as well as the Senate Special Committee on Aging.

As Personnel chair, Tillis will lead the Senate’s panel with jurisdiction over Department of Defense (DoD) personnel policies, including compensation, non-pay compensation benefits such as commissaries and exchanges, education and health care for servicemembers, their families, and DoD civilian employees. His numerous subcommittee assignments in the Senate include Airland; Seapower (Armed Services); Antitrust, Competition Policy and Consumer Rights (Judiciary); and Securities Insurance and Investment (Banking, Housing and Urban Affairs), among others. ...

DoD Eyes Veterans Day For ‘VOSB’ Launch

• WASHINGTON — Veterans Day is the holiday upon which America honors all those who have served in the U.S. armed forces, and this year it is expected to become the date on which all honorably discharged veterans will gain access to “Exchange Online” shopping via the web.

“We are excited to provide these benefits to honorably discharged veterans to recognize their service and welcome them home to their military family,” said Peter Levine last month, while performing the duties of the under secretary of defense for personnel and readiness

“In addition, this initiative represents a lowrisk, low-cost opportunity to help fund Morale, Welfare and Recreation programs in support of service members’ and their families’ quality of life. And it’s just the right thing to do,” he added. ...

Federal Hiring Freeze’s Impact on Resale Hangs in the Balance

• WASHINGTON — A federal government employment freeze was ordered by the President on Jan. 23, calling for a pause in hiring for all new and existing positions except those in national security, public safety and in the military (related to national security). The order immediately raised familiar questions in the military resale system about whether organizations that operate stores on base that sell groceries and other merchandise to men and women in uniform would be affected. Some of the concerns were addressed by Deputy Defense Secretary Bob Work in a Feb. 1 memorandum delegating exemption authority to top defense officials and outlining the parameters within which they should operate to implement the freeze.

Military resale organizations are currently following the order, and while initial guidance has been provided to the services by the Office of Management and Budget (OMB) and the Office on Personnel Management (OPM), the services were awaiting further instructions from these entities on how to proceed with the freeze — and at least one of the resale organizations had requested an exemption from its service secretary — as this issue went to press. ...

Military Resale Sales and Marketing Powerhouses Merge

• WEST PALM BEACH, Fla. Overseas Service Corporation (OSC) and Webco General Partnership, two of the military resale marketplace’s largest and longest-established military brokerage and service companies, announced their intention to merge operations to form OSC-WEBco, effective on Feb 15. According to company officials, the union creates a combined company that it said could serve any department in an exchange, commissary or Veterans Canteen Service (VCS) PatriotStore, worldwide.

In a joint statement, Chairman Frank Hogan and Vice Chairman Rick Thomas said the strategic merger “solidifies the combined company’s long-term commitment to servicing commissaries, exchanges, the Veterans Canteen Service (VCS), and other related activities, and is reflective of OSCWEBco’s confidence in the future of this important channel.” Paul Hogan is the new company’s CEO. ...

DeCA Publishes Savings Baseline, Begins Measuring Regionally

• FORT LEE — The Defense Commissary Agency (DeCA) has published new regional commissary savings figures, establishing a baseline of overall savings to patrons as required by the 2017 National Defense Authorization Act (NDAA).

According to DeCA, commissary savings will now be reported more often and will better reflect the cost of living where patrons shop, as mandated by Congress.

“We have updated how we measure patron savings at the commissary,” DeCA Director and Chief Executive Officer (CEO) Joseph H. Jeu said. “This enhanced way of calculating savings doesn’t change the actual dollars that patrons save, but it will give patrons a better understanding of price comparisons in their local area.” ...

DeCA Selects Names of Commissary Store Brands

• FORT LEE — The Defense Commissary Agency (DeCA) has chosen the names “Freedom’s Choice” and “HomeBase” for its first two private-label product lines. Freedom’s Choice will be the commissary brand name for food items, and HomeBase for non-food items such as paper products and other household items.

“We are proud of our new brands,” said DeCA Director and Chief Executive Officer (CEO) Joseph H. Jeu in announcing the names on Feb. 1, “and I believe our customers are going to be very pleased with the quality and low prices that Freedom’s Choice and HomeBase bring to our shelves.”

DeCA selected SpartanNash LLC in December 2016 to develop the agency’s private label brands (see E and C News 12/16). ...

Deloitte Ranks AAFES, DeCA Among ‘Global Powers of Retailing’

• NEW YORK — Deloitte, one of the world’s top accounting firms, has ranked the Army & Air Force Exchange Service (AAFES) and the Defense Commissary Agency (DeCA) among its “2017 Top 250 Global Powers of Retailing.”

The annual report by the same name examines the 250 largest retailers around the world and analyzes their performance based on geographic region, primary product sector, e-commerce activity and other factors. ...

Commissary Agency Director Set to Retire in June

• FORT LEE — On Jan. 31, Defense Commissary Agency (DeCA) Director and CEO Joseph H. Jeu announced that he will retire June 3 after more than 38 years of federal service. The 10th person to head the agency and second longest-tenured DeCA director, Jeu has been DeCA’s director since January 2011.

As this issue went to press, it was unclear how the Pentagon intended to proceed with the naming of a possible successor.

Over the course of his time as DeCA director, the announcement said, “Jeu has guided the agency through an enormous and challenging transformation; set an aggressive strategic direction to ensure the relevance of the commissary benefit for generations to come; and provided direction and oversight for the modernization of DeCA’s supply chain management systems. ...

Exchange MCS Gets New Pentagon Home

• WASHINGTON — To better serve Soldiers, Airmen, Marines and Sailors, the Army & Air Force Exchange Service (AAFES) opened a new, more convenient home for its Pentagon Military Clothing Store (MCS) on the building’s secondfloor retail concourse, reintroducing it to eligible shoppers in the building on Dec. 8.

The move — which was funded by Air Force Services (AFS) — brings the 3,400-square-foot MCS to the Pentagon mall on the second floor, making it more accessible and easier for servicemembers and military leaders to find.

“At the Exchange, we are family serving family,” said Exchange Director/ Chief Executive Officer (CEO) Tom Shull during the ribbon-cutting ceremony. “This new home” for the MCS, he said, “allows us to serve our Pentagon family better, and the move reflects our steadfast commitment to taking care of those who serve.” ...

Marine Corps BSSD Names Johnston Deputy Director, Resource Management and CFO

• QUANTICO — Effective Jan. 3, John Johnston was appointed deputy director, Resource Management and chief financial officer (CFO) of the Marine Corps Business and Support Services Division (BSSD), the entity that oversees the Marine Corps Exchange (MCX).

With this appointment, Johnston, a veteran of Marine Helicopter Squadron One (HMX-1), succeeds Jennifer Popescu, the last person to hold this position on a regular basis. After Popescu left the BSSD in 2016, Patricia Craddock held the position in an acting capacity until Johnston’s appointment. Craddock returned to being comptroller when this move became effective.

Prior to Joining the MCX, Johnston was the controller for the Fashion Institute of Technology/ State University of New York (FIT/SUNY). Additionally, he has held positions as CFO and director of administration, treasurer and controller for large international organizations including Citibank NA, United Brands, and Reeves Communications, and held leadership positions with PricewaterhouseCoopers in its “CFO of the Future” practice. ...

Keesler Commissary Named Among ‘Best’

• KEESLER AFB, Miss. — A website geared toward the eating habits of millennials recently chose the Defense Commissary Agency (DeCA) commissary here as one of the best grocery stores in the country, and the best in the state of Mississippi.

The Keesler AFB Commissary was ranked as one of “The Best Grocery Stores That Isn’t Walmart in Every State” by Spoon University, a millennialfocused web site that sought to identify what it considered the best grocery stores in unfamiliar places that may be hard to find while traveling.

In Mississippi, the Keesler AFB Commissary, which is co-located with a pharmacy and an Army & Air Force Exchange Service (AAFES) exchange, ranked higher than other non-Walmart stores in the state because, according to the site, its “renewed program offers consistent quality, everyday low-cost pricing on name-brand products,” to military families. ...


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Texas District 33 Rep. Veasey Visits Exchange Headquarters


• DALLAS — On Jan. 17, District 33 Rep. Marc Veasey (D-Texas), a member of the House Armed Services Committee (HASC), visited Army & Air Force Exchange (AAFES) headquarters here as part of his “Marc Means Business” initiative. District 33, a relatively new Texas district created as a result of the 2010 Census, includes numerous counties in the Dallas/Fort Worth area that many of the Exchange’s employees call home.

The congressman, whose district covers parts of Irving, Grand Prairie, Arlington, Dallas County and Fort Worth, visited AAFES’s headquarters as part of a program in which he spends a day working at a business located in, or in this case right alongside, his district to better understand the day-to-day lives and work of some of his constituents. ...

M&M’s Continue as White House’s ‘Official’ Candy


• HACKETTSTOWN, N.J. — On Jan. 20, Donald Trump took the oath of office as the country’s 45th president, and M&M’s Chocolate Candies found its way onto the new commander-in-chief’s candy list, as it has for all U.S. presidents since Ronald Reagan.

The popular Mars Chocolate North America confection — which made its debut in 1941 during World War II as a C-rations staple, a candy that could withstand higher temperatures than other chocolate candies of the period (see E and C News May 2016) — reportedly made the White House top candy list when President Reagan started to favor M&M’s over jelly beans during the latter stages of his administration. ...

Vietnam War Vet Wins Car in AAFES Sweepstakes


• McCONNELL AFB, Kan. — Air Force retiree and Vietnam War veteran Lawrence Lazar was presented with a Welch’s Smart Car on Jan. 18 here at the base’s Army & Air Force Exchange Service (AAFES) exchange. Lazar was picked at random from more than 8,400 Exchange shoppers to win the Exchange’s“Promotion in Motion” Sweepstakes.

In the photo, introducing Lazar (seated in car) to his new vehicle was Chief Master Sgt. Luis Reyes, USAF, Exchange senior enlisted advisor who participated in the presentation. ...


Read more NEWSMAKERS ...

Executing Plans: Maximizing Turns, Sales and Impact …


Although pet category sales in Defense Commissary Agency (DeCA) stores have faced numerous challenges during the past few years, the area can still be counted on to deliver significant annual sales. With a new strategic plan in place addressing the dry dog food category, the agency believes that sales will continue to be vibrant.

Darrell Clary, category manager for pet and household products in the agency’s Sales Directorate (SD), reported that DeCA’s overall pet sales during fiscal 2016 were $130.35 million, and year-to-date December in fiscal 2017, sales were $38.42 million, down 5.33 percent to the prior year. ...



Keeping Sales Moving in the Pet Department


With sales up nearly 2 percent in fiscal 2016, pet foods and supplies continues to be a growth area for Army & Air Force Exchange Service (AAFES) stores, and while the segment’s previously brisk pace of growth has tempered slightly, it still has room for carefully managed growth.

Fiscal year-to-date 2016 sales in the Pets category through January 6, 2017, were up 1.7 percent to $38 million according to AAFES Senior Buyer, Pets, Jim Trussell, and in order for the area to continue to grow, the focus is now on optimizing the category.

“One of the priorities,” Trussel told E and C News, “is to work with my impact team and planogrammer to make sure the number of facings we have on the shelf matches the popularity of the product.” ...



Keeping the Assortment 'Customer-Ready'


Butner Express, Fort Bragg, N.C.

The candy and snacks departments in the Butner Express, Fort Bragg, N.C., are busy store areas that typify the pace of the store’s convenience operations. They also reflect the high importance the exchange service places on in-stock status of top-selling items, and reinforcing the message that the store cares for its customers by keeping the assortment up to date with new offerings.

Store Manager Yvonne Johnson reported that fiscal 2016 year-todate candy dollar volume through Jan. 18, 2017, was $200,351 based on 141,227 units sold. Snacks, meanwhile, totaled $561,305 in dollar volume based on 260,549 units sold.

“Overall candy sales are up 0.5 percent versus the prior year — $200,351 for the current year versus $199,362 during the prior year,” Johnson told E and C News. “Everyday candy sales are up 3.39 percent, $196,556 in fiscal 2016 versus $190,115 during the prior year. ...



Category Prepares for New-Look Express, Class Six Stores


The Army & Air Force Exchange Service (AAFES) stands on the cusp of revamping the shopping experiences in both its Express and Class Six stores to keep pace with outside-the-gate consumer preferences.

Although Express Stores have received several significant tweaks in recent years, such as the insertion of island coolers where practicable, the change marks the first significant revamp of its convenience store interiors since the Express store re-brand in 2012, and standalone Class Six stores may also benefit. ...




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