ECN CoverE&C Commissary News

Editorial Comment — May 2017

A New Beginning, A New Direction …

Now that the Defense Commissary Agency has the opportunity to start afresh, and given the many issues with its systems — everybody knows essential parts are either dysfunctional and/or just not game-ready — let’s take a giant step back from the edge for a moment.

Enough time and money have been spent on the BCG experiment. Isn’t it time to say “enough is enough” and end the expensive contractor agreement? How long has BCG been ensconced in DeCA already? A full year now, following a year of analysis and preparation. And why? The fine print says part of BCG’s tasking has been to provide training and how-to manuals — so DeCA should have enough know-how and training under its belt by now without having to spend further scarce funding on a consultant.

Rather than pay commissions to BCG, perhaps sales goals could be set in the budget process for DeCA to receive full funding.

In any case, this is the time to bring in all the parties involved in the military resale system who have the knowledge and expertise to put things back in order. Whoever is chosen to run the commissaries will have a cadre of skilled executives to call in for advice: the exchange leaders, who have been working together with DeCA in the Defense Resale Business Optimization Board, and representatives from industry who have helped sustain this system — small manufacturers and their brokers should have a seat at the table, as well as their larger counterparts. All have a vast amount of military resale knowledge they are willing to share to help plot a successful course, using their actual retail experience. Wouldn’t that be a novel idea?

On the DoD side, it’s time to re-examine, re-engineer and streamline DeCA’s above-store-level costs; and to put cross-cutting synergies and efficiencies into play, where they make business sense, for savings over the FYDP to reduce annual APF to well below $1 billion. Perhaps it’s also time to create a mechanism that would allow at least some aspects or elements of the commissary system to transition to a NAF footing as part of those efficiencies.

On the customer side, DeCA must restore the kind of savings and service that patrons used to believe in — savings they did not need to have explained to them, but could easily see by themselves — and must fully execute (not under-execute) the DeCA budget to ensure stores have the staff to cull produce and stock shelves as often as necessary.

What’s enormously important is not to lose sight of the customer. Bringing back customers who have stopped driving the few extra miles past Walmart, Publix, Kroger, Giant or Aldi is paramount. The customers need to feel genuinely wanted, to feel confidence that their commissaries will once again deliver the savings many of them felt had begun to erode five years ago.

The top-line business has eroded since DeCA’s $6-billion year in 2012, and many believe it’s because commissary patrons no longer sense the same savings or shopping experience, but are beginning to feel as if they are the subjects of some grand experiment.

Confidence in commissaries is not something that can be forced on patrons. True appreciation cannot be simulated with some glib public relations campaign that is painted on. It has to be intrinsic — delivered honestly with no pretense. That starts from the inside out, with the tone set at the top.

Is there any doubt about how NEXCOM, AAFES, MCX, CGX and their respective service branches are focused on their customers first? And the way the VCS treats its customers makes the VA proud. It could be that way for DeCA, too.

Congress also needs to get behind the military patron and not behind this perverse agenda that is throwing good money after bad to wring a minuscule savings out of 0.2 percent of the defense budget, filling the purses of contractors instead of patrons, all the while allowing the erosion of savings, top line and quality in this treasured cornerstone of the military family’s quality of life.

This misguided agenda is putting the remaining $5 billion of business in jeopardy. Does the Defense Business Board really think it makes business sense to lose a billion in revenue for such a tiny return? It verges on scandalous when you think of who is really benefiting here.

There’s an old saying, “The beatings will continue until morale improves.” Well, it’s time to stop beating the customer over the head with the floundering experiment in variable pricing and the rushed conversion of vast chunks of the stock assortment to private label. Let’s be clear, the majority of patrons never asked for that; they were simply asked if they would be interested in trying them, and some said they “might try;” they didn’t say “want.”

Turning this once highly popular system on its head to shake nickels and dimes out of patrons’ pockets is clearly not the answer — all that has been accomplished to date is to drive patrons away and decimate the top line.

It’s time to change direction, to steer the ship away from the rocks and change its heading back towards indisputable savings and increased sales. Together with support from its resale agency partners, industry, the Pentagon and Congress, DeCA can do this.

Let’s make the commissaries “Worth the Trip” again!

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