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E and C NEWS

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Highlights of the March 2015 Issue


AAFES Names Pickering, Smith to VP Positions


• DALLAS — The Army & Air Force Exchange Service’s (AAFES) Chief Human Resources Officer Leigh Roop announced several personnel moves which become effective in the January 2015 to July 2015 time frame.

This month, Rich Pickering added Theater Operations to his responsibilities for Food and Fuel, becoming vice president (VP) for all three areas.

In February, Maria Smith, VP of Equal Employment Opportunity and Diversity/Inclusion (EEODI), moved to the VP, Talent Management and Development position in the Human Resources Directorate, succeeding Darryl Porter in his prior position; Porter is now VP Services and Commercial Leasing (see E and C News 2/15). ...

Read more NEWS ...

Commissary Promotion Benefits Military Families


• DALLAS — On Nov. 19, military families and military resale were in the spotlight during the annual luncheon held here at the Ritz-Carlton Pentagon City Hotel. S & K Sales Co., in partnership with the Defense Commissary Agency (DeCA), made a $202,000 donation to the National Military Family Association, a contribution earned from the joint DeCA-S & K Sales Co. “Salute to Military Families Sale.”

Proceeds from the 2014 program were generated through the sales of designated products to eligible commissary patrons. These resulted in more than 880,000 cases of product being sold in commissaries, totaling $18.9 million, and $4.6 million in patron savings. ...

AAFES Named ‘Diversity Leader’


• DALLAS — The Army & Air Force Exchange Service (AAFES) was named a Diversity Leader Award winner for 2015 by Profiles in Diversity Journal, emphasizing the Exchange’s commitment to advancing diversity and inclusion in the workplace. ...

M&M’s Celebrates the Movies at Oscars


• HACKETTSTOWN, N.J. — While servicemembers, their families and military retirees were watching movies at home or watching the Academy Awards in February, Mars Chocolate North America brought some flavorful characters to the small screen and the silver screen promoting one of its staples in military movie theater snack cases, M&M’s Chocolate Candies.

Mars showcased its M&M’s brand in a humorous spoof of action movie trailers — and the tagline “watching is better with M” — during the 2015 Academy Awards on Sunday, Feb. 22, on ABC. The 30-second spot —created by BBDO New York — was designed as a mock movie preview, highlighting how watching movies is even better with a pack of M&M’s. Although this marked the television debut of the commercial, a similar treatment ran in movie theaters throughout 2014. ...

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Working Together to Enhance and Sustain the Benefit


AAFES Executive Vice President, Chief Merchandising Officer (CMO) Ana Middleton
As the dynamics of retail success and military benefits policymaking converge in the crosshairs of future Exchange sales goals and dividends generated by sales, Army & Air Force Exchange Service (AAFES) Merchandising Directorate (MD) Executive Vice President, Chief Merchandising Officer (CMO) Ana Middleton issues a call to arms to the military resale and industry community to raise the level of discussion about process efficiencies, what’s working, and retooling what’s not. Much is at stake, and there is no doubt about Middleton’s sense of urgency when it comes to staying ahead of fast-moving trends and thriving in a highly competitive retail future.

On the Exchange Impact Workshop and the future of retail …
My hope is that conversations will be free-flowing and no-holds-barred. It is a time for us to discuss the state of the industry and our role in it. The future of retail is upon us; no more status quo.

We need to discuss process efficiencies on both sides and build upon what is working, and retool what is not. Discussions need to center around staying ahead of fast-moving trends, maintaining a competitive advantage in technology, continuing to have a high level of customer service, and needing to focus on the omni-channel experience. The ultimate goal is to work together to enhance and sustain the benefit that our customers have selflessly earned.


2015: ‘A Very Promising Year’


MCX Head of Merchandising Anita Roberson
Anita Roberson, head of Merchandising for the NAF Business and Support Services Division (NAFBSSD), which oversees the Marine Corps Exchange (MCX), is guardedly optimistic about fiscal 2015, which the organization sees as a year of transition, as the MCX begins a seven-year main store refresh and launches a revamped logistics and distribution system.

On the shelves and fixtures, Roberson looks to continued strength in core softlines categories, new opportunities in sports nutrition, cosmetics and pets, right-sizing in military clothing, and reinvigorated sales in trending hardlines areas.

On Roberson’s outlook for 2015 …
2014 was certainly tough for the MCX; however, several businesses that turned the corner during the holidays have continued to remain strong and are helping to shift the total trend of the business.

Our softlines business is planned up 3 percent for 2015. Accessories, ladies, shoes, children’s, young men’s and ladies’ accessories outpaced the organization during the holiday season. We are planning continued growth in these areas going into 2015.

We are also looking to hardlines to gain back some of the business that we have lost over the past year. For example, the audio/video category started to see a shift in trend during the holiday season, and we are optimistic that this trend will continue.

We have repositioned our vendor structure in televisions to ensure that key brands, such as Samsung, have sufficient inventories to support sales uptrends. We also have a current trend in sporting goods and home store categories such as domestics, luggage and small electrics.

Both consumables and military clothing are very dependent on troop movement, numbers and positioning. Certainly, consumables are impacted greatly in the Marine Marts due to rotations and classes, and military clothing is impacted purely by the current number of troops purchasing.

Although we continue to plan year-over-year drops in tobacco, businesses such as sports nutrition, cosmetics and pets continue to surface as opportunities to drive sales to improve total consumables category plan. We are looking to consumables to drive an increase in 2015 over the previous year.

At this point, early in 2015, we are still not seeing a positive trend in the military uniform business, and are aggressively working on right-sizing the inventory to manage the business as efficiently as possible.

We are excited to report that our new North Star private label nut and snack mixes have had a great sell-through. This private label is a joint venture with the Navy Exchange Service Command (NEXCOM), and just after deliveries in the fall of 2014, has grown to 10 percent of our nuts and seed category.

This is just one example of the continued effort on our merchants’ part to provide our customer healthier food options at a value. Stay tuned for more!

Read more 2015: 'A VERY PROMISING YEAR' ...

‘Variety’ and ‘Sizzle’ Spur Retail Sales Growth


VCS Chief Merchandising Officer (CMO) Carey Filer
Since joining the Veterans Canteen Service in 2007 after nine years as a buyer for Dillard’s Department Stores, Carey Filer has seen tremendous sales growth at the Veterans Canteen Service (VCS). The organization’s PatriotStores operations have moved into full 21st-century mode, offering an array of products that reflect the modern lifestyles of patients and their caregivers. In this exclusive interview, Filer talks about current sales, initiatives driving those sales, and the goals he and VCS have for fiscal 2015.

On the VCS’s continued sales success …
Retail sales increases have continued through the holiday season, bringing our fiscal 2014 year-to-date sales increase from February through December to 2.9 percent.

This sustained growth is a result of the combination of trend-right merchandising strategies from the buying team and strong execution from our store managers and associates. It was definitely a “Frozen” holiday season, and by carrying key products [tied into that film and other hot areas] that our customers were looking for, we drove sales in our branded categories — but more importantly, we saw sales rise across all categories.

We continued to gain efficiencies through the Oracle RMS/SIM procurement and store software. 2014 was our second full year on the new system, and this system has allowed us the visibility to make key merchandising decisions by group and department, allowing us to be more granular than we have ever been.

The system also allows us to manage over 3,000 items on automatic replenishment across the enterprise, giving our customers a consistent flow of planogram merchandise in a timely manner.


‘Moving the Needle’ to 2015 Success


CGX Director of Merchandise Sarah Malbon Mikus
Sarah Malbon Mikus, the director of merchandise for the Coast Guard Exchange (CGX) since May 2011, is encouraged by the exchange service’s performance during fiscal 2014. Various initiatives and changes that were instituted helped the CGX move past the fiscal year’s finish line in grand fashion, and she talks about these highlights, as well as taking that momentum and using it to move ahead with confidence into fiscal 2015.

On the factors Malbon Mikus credits for CGX’s fiscal 2014 success …
2014 was a very dynamic and exciting year at CGX! As the year started, our sales struggled during both the first and second quarters. By July, sales were down 3.0 percent.

But starting in August, we gained some momentum and reversed the downward trend. We achieved sales increases from August through November, with a very small 0.6-percent decrease in December.

The good news is that overall, we were able to “move the needle” up from being down 3 percent in July to just being down 0.4 percent by the end of December.

Another good news story was that we had increases in gross margin dollars every month in the third and fourth quarters through December. For example, although sales were flat in December, we were able to generate a 5.0-percent increase in gross margin dollars. November was a very high-performing month, with sales up 3.4 percent and gross margin dollars up 3 percent.

We made some major changes to our fourth quarter promotional calendar that really worked for us. First, we pursued our customer’s holiday purchases ahead of “Black Friday” by emphasizing a major three-day sale in mid-November.

Then, we launched a four-day sale beginning the Sunday before Thanksgiving and included “Sunday Only” specials, featuring several key items in softlines and electronics with competitively sharp prices. These events were a big win for us, and we drove major sales increases each day of the sales.

Also during November and December, we were mindful to balance our compelling prices with protecting the bottom line. For example, we recognized that if we promoted our key brands in activewear and apparel at 25-percent off, our unit sales would have to increase on average 250 percent just to break even with the same gross margin dollars we generate at our everyday prices. That’s an uphill battle that we chose not to fight. Since many of the key brands we offer in our stores are such a good value to our customers at our everyday prices, we knew we could offer compelling promotions without giveaway-type prices.

Throughout the fall season, we focused our efforts on promoting the key trending branded merchandise, building our sustainable businesses, and driving our healthy initiative by promoting “Fit Forward” merchandise.


Personal Readiness... With a Female Touch


Army & Air Force Exchange Service (AAFES) stores have a signif icant stock assortment featuring numerous feminine hygiene and hair care products to make their female customers feel good all around.

Buyer Christle Martin, who handles feminine hygiene and hair care products in the headquarters-based Merchandising Directorate (MD), noted that although four key areas have posted fiscal 2014 sales through December that were down from activity from a year ago, these areas are still bringing in signif icant sales to the Exchange. ...





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