120 Years of Semper Fi ...

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Highlights of the August 2017 Issue


Marines: Mission First!


Cindy Whitman Lacy, Director, Marine Corps Business and Support Services Division

As the Marine Corps Exchange (MCX) completes its 120th year, it is engaging business disruption head-on with bold decisions, agility and a careful focus on longterm objectives. In this exclusive interview, Cindy Whitman Lacy, director of the Marine Corps Business and Support Services Division and the MCX, describes how the MCX is executing its plan to build a sustainable future while meeting Corps’ expectations and the needs of “Core Marines.”

E and C News: What are the MCX’s strategic goals and where does it stand for fiscal 2017?

Cindy Whitman Lacy: As with much of the retail industry, and our sister services, we have been experiencing challenges in top-line sales. However, in our strategic plan that was launched in 2016, we began laying the foundation to create a sustainable future. This included a focus on improving our selling, general and administrative (SGA) expenses through transformational efficiencies, business modernization with mobile and digital solutions, and brand and customer centricity. This plan helped position us well for the challenges we’ve been facing in our top-line revenue growth.

Additionally, as we began focusing more on our Core Marine (18-24 year olds), we have been making strategic shifts to better meet their needs, including a focus on Troop Stores, Marine Marts, and other venues outside of the big-box stores. We have invested heavily in understanding this audience, and are preparing to prototype new solutions in 2017 and 2018.



‘Better For You’ Captures Corps Beachhead


Although they are increasingly regarded as mainstream purchases, “better for you” products are enjoying their own dedicated space, to allow them to thrive without the pressure of competing with the candy and other snacks. With this, Marines and their families now have a wider variety of choices in Marine Corps Exchange (MCX) stores when it comes to choosing purportedly “healthier” foods to integrate into their various lifestyles.

Although signage in MCX stores reads “Better4U,” said Robert “Bob” McLaughlin, divisional merchandise manager (DMM) of MCX’s Consumables Division, “We use ‘Better For You’ for food items that are lower in calories, sugar, salt, fat and are gluten-free, and contribute to a healthier life style.”

When it comes to healthy foods, “Compared to five or 10 years ago, the product assortment at the MCX and outside the gate has expanded tremendously,” McLaughlin noted. “We have separate Better-For-You planograms ranging from 4 feet to 12 feet depending on the volume of the site. When we began the program three years ago, we had one planogram in some stores, but have expanded to at least a 4-foot section in all of our sites. We partnered with our visual director, Lorraine Shoffner, to create a graphics package to call out the sections,” in all those stores, he added.

As the Better-For-You category has grown, McLaughlin said customers are wanting more options such as organic, gluten-free, and no-soy. “Consumers are now able to find Better-For-You options in more categories such as confections, salty snacks, jerky, and dairy. The ease of shopping the category has also changed throughout the years. Consumers can now go to their local grocery store or C-store to purchase Better-For-You products, and it is no longer viewed as a specialty shopping choice.” ...



Ensuring Optimal Corps Hydration


Paced by increased interest in the water subcategory, the Marine Corps Exchange (MCX) continued to register significant sales volume in its non-alcoholic beverage assortment through early July.

MCX Non-Alcoholic Beverages and Spirits Buyer Joe Cella reported that fiscal year-to-date 2017 sales of nonalcoholic beverages through July 4 — including water, soda, isotonics, energy drinks, juices and other items such as chilled coffee — were $18.5 million versus $19 million during the prior year, or a decrease of more than 2 percent.

“A combination of factors have influenced sales thus far,” Cella noted. “These include increased competition from food courts, and standalone restaurants being added on our installations. It is worthy to note that food sales are down 4.4 percent year to date.” ...



Candy Merchandising: Policies, Promotions and PDQ


Buyer Ashley Davis, who manages the food, candy and gourmet categories for the Marine Corps Exchange (MCX), has studied merchandising since at least her college years. These days, her focus is also on her current buying responsibilities, including candy, and how the MCX brings this fast-moving category to its customers.

Although a degree in Fashion Merchandising helped launch her retail career, a Master of Business Administration (MBA) degree in Marketing increased her versatility, and she soon began her career working for Headquarters Marine Corps Business Operations and the Marine Corps Exchange 10 years ago in the Advertising and Marketing Department. Throughout the years, she told E and C News, “I was promoted to various positions in the Retail Buying Office, including assistant buyer, junior buyer in Sports Nutrition and buyer for Food, Candy and Gourmet.”

In her current position since late 2012, Davis has seen numerous sales fluctuations that have occurred in the candy area during the past five years. ...



Marine Pride and Sales Soar


There’s no such thing as a former Marine. Whether retired, veteran or active duty, once a Marine, always a Marine. Marine Corps Exchange (MCX) stores serve this community with more insight than any stores outside the gate. As such, they are ready with a mix of hardlines, softlines, emblematic and souvenir merchandise that highlight the exceptional level of pride shared by those who have served in the Corps, their parents and other eligible patrons.

Barbara Gallo, buyer of military logo items for MCX stores, reported that through June, fiscal 2017 sales volume in the logo area was $6.73 million, an 8.23-percent increase versus prior year sales of $6.22 million. Gallo noted that the fiscal 2017 year-to-date figure is also 4.5-percent over plan. ...



Defense Leaders with Resale Oversight Confirmed, Nominated


• WASHINGTON — After several months as President Trump’s lone top-echelon appointee in the Pentagon, Secretary of Defense James Mattis welcomed newly confirmed Deputy Secretary of Defense Patrick Shanahan to the building on July 19. In the weeks following, several other key nominations with influence over the direction of military resale were either confirmed, nominated or advanced toward Senate confirmation.

Although Senate Armed Services Committee (SASC) Chairman John M. McCain (R-Ariz.) cautioned, “Somehow over the last several years, this committee seems to have been treated as sort of a rubber stamp,” and that he expected clear answers on administration policy and strategy, Shanahan was confirmed by the chamber on July 18 by a vote of 92-7. Shanahan, whose nomination by President Trump was received by the Senate June 6, most recently served as Boeing senior vice president (SVP), Supply Chain & Operations. A native of Washington State, he spent more than three decades with the company, which he joined in 1986.

Awaiting Senate hearings or confirmation as this issue went to press were several other nominees to key posts with influence over the course of resale matters. ...

AWG Exits Military Distribution Business as Supplier Base Narrows


• FORT WORTH, Texas — With the announcement in mid-July of the exit of Associated Wholesale Grocers (AWG) from the Defense Commissary Agency (DeCA) supply chain, the number of distributors entrusted with the task of ensuring uninterrupted supply to commissary stores has dwindled to a select and possibly precarious few. Within this group, DeCA counts on what it calls Frequent Delivery System (FDS) distributors, such as Spartan- Nash, to handle around 80 percent of the agency’s distribution needs.

Dan Funk, AWG’s executive vice president (EVP) Marketing and Merchandising, and Mike Schumacher, Always Fresh Inc. (AFI) president, told the companies’ former clients in a release, “… we are announcing strategic changes involving our Fort Worth Division and our military subsidiary, Always Fresh, Inc.,” and that AFI “will be discontinuing its military distribution operations effective August 15 … . We have arranged for MDV SpartanNash to take over the AFI vendor contracts with deliveries commencing on August 16, 2017 … .” ...

McFarland Assumes Command Of Busy AAFES-Europe/ SW Asia Region


• SEMBACH, Germany — As the Army & Air Force Exchange Service (AAFES) continues to ramp up support for training exercises in eastern Europe and operations in Southwest Asia, Army Col. Scott McFarland assumed command of the Europe/Southwest Asia Region during a July 13 ceremony held near the Exchange’s region headquarters here. ...

Exchange Names Iosefo Senior VP, Central Region


• DALLAS — The Army & Air Force Exchange Service (AAFES) named Anna Iosefo as the senior vice president (SVP) of its Central Region. The move, effective this month, sees Iosefo make a quick return to the region, where she had been primary vice president before moving over to the Merchandising Directorate (MD) as vice president (VP) in April (see E and C News, June 2017). ...

“As senior vice president of the Exchange’s Central Region, Anna will be a tremendous asset to our entire organization,” said Tom Shull, Exchange director/chief executive officer (CEO). “In this position, she will lead all Central Region strategies to ensure alignment with our mission, vision and long-term business objectives.”


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Maintaining the Balance: Readiness, Well-being and Family Support


In her current role for about two years, Army veteran and long-time Defense Department executive Stephanie Barna has inherited commissary transformation as one of Personnel & Readiness’ enduring priorities. An authorized shopper herself, she is in a position to oversee the commissary benefit from the multiple perspectives of the Department’s needs and customers’ experiences. In her analysis, the competition for available resources in an austere budget environment affects everything the Department needs or wants to do — e.g., benefits, compensation, training, equipment — and does not represent an “either-or” choice between readiness and quality of life, but rather one of “maintaining the proper balance among DoD’s competing needs.”

E and C News: You have a deep and varied background in the Army and in leadership roles in government service. How does it help you to advocate and to make decisions that benefit both servicemembers and the Department of Defense (DoD)?

Stephanie Barna: My background has given me a unique and personal appreciation for the challenges that are faced by military members and military families.

I’ve been a loyal commissary shopper for many years, and know first-hand how valuable that benefit is. Throughout my years of government service, I’ve also seen how the commissary benefit works to the good of the department as a whole. Promoting readiness, well-being and family support is a Personnel and Readiness (P&R) strategic goal, and the commissaries support all three of those areas; that makes the commissary benefit an integral part of supporting the overall P&R mission.

I am very pleased that my current role enables me to help sustain and enhance the commissary benefit and thereby improve the readiness and quality of life for military members and military families. ...






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