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Highlights of October 2012 Issue



Inouye, Hawaii Lawmakers Call on Panetta to Protect Commissary Funding


• HONOLULU, Hawaii — Sen. Daniel K. Inouye (D-Hawaii), chairman of the Senate Appropriations Committee, recently called on Secretary of Defense Leon Panetta to protect the Defense Commissary Agency (DeCA), as Department of Defense (DOD) officials prepared recommendations for budget cuts in light of the President's signing the sequestration transparency act into law on Aug. 7.

Inouye was joined by other leading Hawaii lawmakers in voicing support for commissary and exchange benefits here at the recent 2012 Annual Hawaii Conference of the American Logistics Association (ALA). The meeting is designed to keep DeCA and military exchange officials current with new and updated foods and flavor profiles, and other merchandise, from regional vendors. ...


PDUSD Rooney Departs P&R, Kelly Named Director, Resale and NAF Policy


• WASHINGTON — In early September, a series of senior-level personnel changes affecting military resale took place in the Department of Defense's (DoD) Personnel and Readiness (P&R) division. Jo Ann Rooney departed her position as principal deputy under secretary of defense (PDUSD) for P&R, and Michael J. Kelly replaced the retired Janis White as director, Resale Activities and NAF Policy. ...


Exchange Dividends Total $306 Million in Fiscal 2011


The Army & Air Force Exchange Service (AAFES), the Navy Exchange Service Command (NEXCOM), the Marine Corps Semper Fit and Exchange Services (MR) Division, which oversees the Marine Corps Exchange (MCX), and the Coast Guard Exchange (CGX) recently announced their respective fiscal 2011 contributions to Morale, Welfare and Recreation (MWR) programs.

During fiscal year 2011 — Jan. 31, 2011 to Jan. 29, 2012 — the four services generated $306 million in dividends, a more than 15-percent decrease from prior year. ...


DeCA Tests Commissary Rewards Card with Fort Lee Launch


• FORT LEE — In August, the Defense Commissary Agency (DeCA) began its first test of the agency's new Commissary Rewards Card at the commissary here. The agency described the test as its “first step toward introducing the world of digital couponing to its commissaries worldwide.”

“We are very excited about this new initiative,” said DeCA Director and Chief Executive Officer (CEO) Joseph H. Jeu. “These cards will allow our customers to maximize their commissary benefit by using technology to save time, effort and money.”

Deputy Director and Chief Operating Officer (COO) Michael Dowling told E and C News in August, that “the initial phase of the Commissary Rewards Card began successfully at Fort Lee Aug. 8. We will expand testing to 30 stores this month, with all stores scheduled to deploy in early fall.” ...


Read the complete IN THE NEWS ...

INDUSTRY PHILANTHROPY — Support Research for Breast Cancer


In conjunction with Breast Cancer Awareness Month, commissaries and exchanges are merchandising a wide variety of products that allow patrons to make their own contributions to the fight against breast cancer. While space constraints prevent E and C News from listing all the companies sponsoring related promotions, the following is a sampling of what is happening in the world of military resale.


Read the complete INDUSTRY PHILANTHROPY ...

AAFES INTERVIEW: AAFES Chief Operating Officer (COO) Mike Howard


Focusing On What Makes Our Business Unique


In his more than 40 years with the Army & Air Force Exchange Service (AAFES), and in particular the past six years as chief operating officer (COO), Mike Howard has witnessed the transformation of a resale organization with a strong 117- year history of service into one that is even more committed to closely aligning itself with patrons' desires, and enhancing their shopping experience.

In this exclusive interview with E and C News, Howard discusses the expansion of the Exchange's online sales portfolio; the current challenges that face the exchange service; its efforts to understand patrons and improve their shopping experience; and leadership's plans to grow the business to match customers' wants and needs. ...

“Good category management needs to understand how the customer behaves. The approach is simple: we want to understand and listen to the feedback shoppers give us every day so that we can provide an experience that drives a return visit.”
— AAFES COO Mike Howard

Read the complete MIKE HOWARD INTERVIEW ...

NEXCOM Q&A: NEXCOM Executive Vice President and
Chief Operating Officer Michael Good


NEXCOM's Customer-Centric Benefit: Relevant and Connected


With its retail sector reflecting growth of 1.4 percent over prior year and services generating a 2.6 percent increase, the Navy Exchange Service Command (NEXCOM) is holding a steady course through stiff economic headwinds. It's a vector that NEXCOM Executive Vice President (EVP) and Chief Operating Officer (COO) Michael Good anticipates will hold for the balance of the year. Although commodity fluctuations, such as a 5.5-percent decline in gasoline prices, have temporarily flattened out the overall sales curve, the Navy Exchange's retail operations remain healthy. NEXCOM's committment to adjust and ensure its offerings and services are relevant to the Navy, and Navy patrons' needs, form the foundation of its strategy to deliver the benefit. ...

“The leadership of the military exchanges and DeCA has a firm commitment to pursue collaborative efforts to the maximum extent. The CEOs and directors meet quarterly to review progress, and individual working groups meet monthly.”
— NEXCOM EVP and COO Michael Good

Read the complete MICHAEL GOOD INTERVIEW ...

CGX: Coast Guard Exchange Director of Merchandise Sarah Mikus


Refining Store Formats, Increasing Branded Presence


It's all going on at the Coast Guard Exchange (CGX) — a new CGXpress store model, a “MarketPlace” grocery collaboration with the Defense Commissary Agency (DeCA), a softlines collaboration with the Army & Air Force Exchange System (AAFES), to name but a few exciting new initiatives.

The business model shift away from reliance on traditional cornerstone categories such as tobacco may represent a significant change of heading for the exchange system, but the course has been reset for increased sales and productivity in other product categories.

In this exclusive interview, CGX's Director of Merchandise, Sarah Mikus discusses the exchange service's newest merchandising strategies; the powerful impact of advertised categories; and how CGX is reaching out to authorized shoppers wherever they are stationed. ...

“Recently, there has been a sales decline in the tobacco industry. Coupled with the business model shift away from the category, it places even more importance on our continued efforts to modernize our stores and create an exciting and enjoyable shopping experience for our customers.”
— Coast Guard Exchange Director of Merchandise Sarah Mikus

Read the complete SARAH MIKUS INTERVIEW ...

AAFES TACTICAL — Total Team Effort


JR Chidester, Army & Air Force Exchange Service (AAFES) divisional merchandise manager (DMM) responsible for Military Clothing (MC) since April 2011, is proud of the MC program that he serves. He recently told E and C News that the team he is part of is one of the keys to the success of this area in Exchange stores.

“The Military Clothing team is a unique team, and we support Airmen and Soldiers like no other store within the Exchange,” he said. Members of the team include Tactical Pod teammates Senior Buyer Paul Atherton; Planning, Allocation and Replenishment (PAR) Manager Roger Wulff; Planner Christi Redfearn; and Allocators Andrea Jones and Christine Chu Ba.

“Our store managers are experts of their trade and do a phenomenal job of supporting customers, whether for a service dress for a formal occasion or a utility uniform, tactical gear or equipment as the member deploys,” he observed. “As such, our buying staff supports the troops in a unique way, providing uniforms and boots specifically approved by the service for their wear.” ...

Read more AAFES TACTICAL ...



Operating 503 exchanges and 247 commissaries, as well as hundreds of smaller convenience stores, package stores, troop stores and other facilities, the military resale system is to be found wherever U.S. Soldiers, Sailors, Airmen, Marines or Coastguardsmen fly the flag, providing essential quality-of-life support for servicemembers and their families. These pages present statistical information — demographic, geographic and financial — on the military resale system and its customers. ...




As of Dec. 31, 2011, there were 1,217,901 U.S. military personnel stationed in the United States or its territories (up 89,203 from June 30, 2011): 491,298 Army personnel; 292,887 Navy; 157,016 Marine Corps; 276,700 Air Force. A total of 80,516 were posted in Europe (up 1,118 from June): 42,854 Army; 5,993 Navy; 1,011 Marine Corps; 30,658 Air Force. East Asia and the Pacific (primarily Japan and Korea**) quartered approximately 79,670 U.S. armed forces (up 5,313 from the number reported for June 2011): approximately 22,747 Army; 18,765 Navy; 17,535 Marine Corps; 20,623 Air Force. Excluding Afghanistan, Kuwait and Iraq, an additional 5,113 troops were stationed in Africa, the Middle East and South Asia (down 5,344 from June), and more than 57,000 elsewhere in the world. ...

Review the complete MILITARY RESALE MARKET DEMOGRAPHICS — Where They Serve ...

• MCX Retail Sales (Fiscal YTD 2012 vs. 2011, CONUS Only)
• NEXCOM Total Sales Overseas (July 2012 vs. July 2011)
• DeCA Sales By Area (Fiscal Year-to-Date July 2012 vs. July 2011 [% Change])
• AAFES Total Direct Sales (Fiscal YTD 2012 vs. 2011)
• DeCA Total Category Sales Comparison, Semiperishables/Nonperishables and Perishables
  (Three-Year Comparison, Fiscal 2009-Fiscal 2011)

Click Here for “RESALE SNAPSHOT” Totals