ECN CoverE&C Commissary News

Editorial Comment — August 2012

Enduring Connection, Valued Partner ...

Standing tall and proud and working with unmatched discipline is something that Marines do every day, and it's no different at the Marine Corps Exchange (MCX). Whether it's appreciation for Marines and their families as they move around the globe, or for their sacrifices in conflicts past and present, the shared sense of devotion abides strongly at headquarters and in the field.

And while today's state-of-the-art MCXs long ago eclipsed the Quonset huts and makeshift stores of yesteryear — except perhaps downrange, where wood and canvas still rule — it's clear Semper Fit and Exchange Division (MR) executives and associates continue to build upon the special connection with Marines that has existed since the first MCX stores served these troops 115 years ago.

Today, MCX stores are performing strongly. The system has refashioned itself in recent years in a way that resonates more deeply with the Marine Corps family, and the customers have responded. Online, MCX is connecting directly with patrons with a look and feel that's unique and authentic to Marines and their families, through social media and at mymcx.com.

But don't think for a moment that MCX will rest on any laurels (even though sales increased 52 percent in the 10 fiscal years from 2001 through 2011, and MCX is on target for its first billion-dollar year in 2012); the MR team is passionate about its mission, and it shines through in all they build, do and are working on for the future.

So although MCX associates may carry electronic pricing guns instead of real weapons, they check each 'round' to make sure it means savings for Marines and their families. Congratulations to MCX not only on 115 years of dedicated service but also for becoming one of the most efficient, effective and responsive retailers and benefit providers on the map.

Ask the Wrong Question, Get the Wrong Answer ...

The Center for Strategic and Budgetary Assessments (CSBA) — which seems to have been intent on dismantling commissaries and exchanges for quite some time — has raised a few eyebrows in the military community with a recent limited, severely flawed and inconclusive study. Quality-of-life advocates see it as an attempt to shift the discussion from public policy to asking beneficiaries to make "trade offs” among their benefits.

CSBA compiled and analyzed 2,655 responses to a survey posted online early this year. Most respondents were authorized military resale patrons, though some apparently had no current military affiliation at all.

Essentially what they were being asked — and completely out of context of how things might fit into their reallife family shopping budget — was a “do you like this or do you like that?” proposition.

So, how would you like your military benefits today? “Quick, let's be honest now, what would you prefer: a 20-percent bonus, a 5-percent pay raise, and more vacation days — or — a trip to the commissary?”

What kind of choice is that?

Hardly a tough one for a single servicemember sitting at a computer doing an Internet survey.

Let's get real here — it's a lot easier to think about what one could do with a larger paycheck and some extra vacation days than ponder the significance of what one might save in a commissary.

Immediate gratification wins out over deferred gratification every time in the minds of many. That is, until it becomes time to pay the piper.

The Department of Defense (DoD) can't afford to debilitate military family readiness — many families are already against the wall, food stamps in hand. It's the difference between what CSBA calls “perceived” benefits and a real benefit.

Also, are we to think that DoD can suddenly afford to hand out 5-percent pay raises, or 20-percent bonuses and more vacation days, and it's not going to cost the Department multiple billions of dollars? How about 5 percent of an estimated “basic” 62 percent of DoD's $128-billion payroll for 2013, or around $3.9 billion. So, what's a 20-percent bonus going to cost?

The whole study is based on the premise of choosing between benefits that servicemembers have already earned — with a view to finding a way to eliminate those that, on a superficial level, might seem less immediately appealing.

When the old approach to attacking military resale doesn't produce the results you want to see — try contriving the question a little more enticingly to get the response you want. Dubious results indeed.

The return on investment (ROI) of the commissary system has been documented many times over. Its ROI ranges from a minimum of 2:1 at the most conservative estimate, to 5:1 or more, when other linked financial gains are factored in. As the center of a $20-billion resale marketplace, commissaries also attract patrons to shop exchanges and thereby fund essential morale, welfare and recreation (MWR) services.

By whipping that pay raise and bonus idea off the table — now you see it, now you don't — and substituting a stipend of up to $600, CSBA generates even sketchier math.

Perhaps the study should really ask what a military family's preference would be between saving on average $1,200 to $4,400 per year on food bills depending on family size, or a stipend of $300 to $600 per year, depending on rank?

Then there are 2 million-plus military retirees. We're sure they will have something to say about this idea. Retiree stipends — not even considered by the study, though retirees made up a sizable batch of the survey respondents — also represent an additional $1.2 billion cost the taxpayer would have to fund. So now we're up to $2.4 to-$5.1 billion spent per year — versus a $1 billion investment in readiness, recruiting and retention — depending on whether that pay raise was still on the table, or just a bait-and-switch.

Does anyone really believe for a moment retirees would consider that fair compensation for their lost commissary retirement benefit earned from a full career of military service? The only way those words can be put in retirees' mouths is if they are threatened with a trade-off of their healthcare benefits.

Another giant hand reaches into servicemembers' pockets if commissaries are dismantled, because servicemembers have invested billions of their own surcharge dollars in building and upgrading them. Want to bet no one informed them about that?

Now for just a little of the domestic and military collateral damage: What about the 62.4 percent of commissary employees that are either military spouses, military family members, retirees, Guard, reserves or veterans, blind disabled and Wounded Warriors? If you want to devastate your fighting force, eliminating those dependents' jobs is a good place to start. While Exchanges picked up good “value” grades in the study, nobody should be fooled here. Undermining the 31-percent commissary savings effectively scuttles the business model of all shopping and MWR on base — and those dependents' jobs along with it.

All CSBA has produced here is a shell game of trade-offs that culminates in a lose-lose for military beneficiaries — not a true solution to the compensation dilemma. The sample size has been described as “too small to draw definitive conclusions”; we see the study as a definitive sellout, all the way down the Potomac.

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