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E&C Commissary News

Editorial Comment — June 2011

Picking Up Friends Along the Way...


Storm clouds on the horizon, draconian budget cuts in the offing, rumors of onerous audits, and even consolidation studies again: we have certainly heard a lot about how these are dark days for military resale and other quality-of-life benefits.

But there just might be a silver lining to all the grim weather. In spite of it all, the resale systems are rolling along relatively smoothly, and servicemembers are taking advantage of their benefits to help themselves through tough times. At the same time, leaders in both houses of Congress and key Department of Defense (DoD) officials have voiced their support for commissaries and exchange benefits, all in the face of some very stiff financial headwinds.

Most recently, as the current round of Base Realignment and Closure (BRAC) actions draws to a close, there has been some consternation in the marketplace regarding rationales used to decide whether to shut down stores or preserve resale services at closing bases, or to support the sale of beer, wine, spirits and tobacco, as well as other new merchandise categories, in certain commissaries.

Recent battles by members of Congress from New Jersey and Maine to keep the commissaries and exchanges open at Fort Monmouth, N.J., and NAS Brunswick, Maine, have helped bring these issues — some of which have festered in the background for many years — to a head.

Regarding Brunswick, as a result of the carefully thought out work of Maine's senators, Olympia Snowe and Susan Collins, both Republicans, the Department of Defense (DoD) will finally be taking a very close look in the coming weeks at the criteria for closing stores, or continuing commissary operations, when an installation is closing. And as a result of a very tightly worded amendment proposed by Rep. Chellie Pingree of Maine, a Democrat, new light will also be cast on the various possibilities for “enhanced” stores where no exchange remains, but where a commissary could still provide an expanded menu of categories — much like a NEXMart or BXMart, but run by the Defense Commissary Agency (DeCA) instead.

The execution is not without snarls in its details. The support of the alcoholic beverage industry for the sale of these products in commissaries would have to be garnered, and no attempt to do so in the past has succeeded. Next, perhaps, is the tricky question of where exactly to put the alcohol, tobacco and other categories of the Secretary of Defense's choosing in such enhanced stores. Every inch of commissary space is prime selling space. The available display area is notoriously tight in many stores, and it's not as if you can remove bread and milk to make way for wine and spirits, or empty the coolers of butter and yogurt to make way for beer. Mixing nonappropriated fund (NAF) and appropriated fund (APF) inventories might be another issue. Whether the sale of alcohol and tobacco will be enough to make these stores self-sustaining also remains to be seen.

As for the exchange systems, while they might be robust, their success is never an easy feat to achieve in a challenging benefit environment where civilian best practices have limited applicability. It's not as if anyone is getting rich off the tight margins. And any impact or loss of key exchange merchandise categories could ultimately have an adverse effect on sales and dividends. If that happens, the taxpayer would be saddled with the full bill for morale, welfare and recreation (MWR) activities.

Farther down the East Coast, the struggle to keep the commissary open at Fort Monmouth has gained the backing of much of the New Jersey congressional delegation. As with Maine, it seems the resale system has picked up a number of new friends, or has had more friends than it really knew of all along.

Along with this flurry of activity, people in Congress and the highest echelons of the defense community are beginning to really sit up and take notice about how important the commissary is, and how important exchanges are to military readiness and military families.

We are not hearing empty words. First Lady Michelle Obama and Dr. Jill Biden have taken a strong stance; the chairman of the joint chiefs has stated his support, and defense leaders have made it clear that military families, who have long remained in the background, are vital partners to the future of the U.S. military. At least as long as humans are a part of the fighting force.

But Monmouth and Brunswick are only part of the story. Also not to be taken for granted are the important roles commissaries and exchanges play whenever there's a natural disaster. From the support delivered during Katrina and other hurricanes, tornadoes, wildfires on the West Coast and the Gulf seafood program in commissaries, to the earthquake, tsunami and nuclear emergency in Japan, resale has been ready to respond to support the military communities affected, as well as general rescue and recovery operations.

Those outside of resale who are called on to make decisions and reports that affect the future and viability of resale benefits need to remind themselves regularly that military stores, unlike their civilian counterparts, cannot simply be located where the best foot traffic demographic is, nor can they be closed on a marketing whim. Although the exchange systems are typically self-sustaining, behind the scenes, it needs to be remembered that the larger stores generally subsidize many of the smaller stores, so that stores can be operated wherever the servicemember is stationed.

Certainly, when it comes to store openings and closings, there is a partial mirror of civilian best practices, but that's where the similarities end. Military stores have to go where the troops go, and can't simply be closed because they might be unprofitable. There are legislative procedures that need to be followed, committees and subcommittees that must approve or disapprove.

There's no doubt that recent issues have forced some vigorous discussion, but it is a very encouraging sign that the resale system has more advocates and legislators willing to stand up and be counted than many may have first thought.

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