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Highlights of the October 2018 Issue

 

INDUSTRY EXECUTIVE INTERVIEW
The Devil Is in the Details:
Resale Reforms Spark Mixed Views

 

Armed Forces Marketing Council (AFMC) President Tom Gordy

Since March 2008, Tom Gordy has led the Armed Forces Marketing Council (AFMC), a group which exists “to protect and enhance earned quality-of-life benefits provided through the commissaries and exchanges for military families.” Gordy, a Navy Reservist and a military store patron himself, has worked to support these benefits for years, engaging with congressional and military industry leaders to address issues of concern to AFMC members. In this exclusive interview, he talks about the state of military resale and the atmosphere of reform, and how current reforms might play out for store patrons today and in the near future.

E and C News: How does the Armed Forces Marketing Council (AFMC) differ from the American Logistics Association (ALA)?

Tom Gordy: The main difference between AFMC and ALA is membership. The AFMC is a non-profit business league for military brokers. While we address many of the same issues as the ALA, there are some particular issues pertaining to brokers that the Council addresses that are not typically addressed by the ALA.

E and C News: Through its members, AFMC represents a major portion of resale suppliers to both commissaries and exchanges. What are they telling you about their issues and concerns with the changes that have taken place to military resale and the ongoing reforms? As a patron, how have you and your family been affected?

Gordy: The member companies of the AFMC represent about 60 percent of the products sold in military resale. So if there is an issue that is affecting military resale, it usually affects the members of the Council as well.

We have seen tremendous churn in the industry over the past few years — churn created within the Department of Defense (DoD), on Capitol Hill, within the resale systems and in the civilian marketplace, whether budget issues, reform, consolidation or e-commerce and m-commerce. Some of it has been positive, and some less so.

The members of the Council do not fear the competitive challenges, because competitiveness results in a stronger benefit. They also do not fear potential reforms, as long as there is a strong business case that supports the reforms and that they deliver a better and stronger benefit for military families.

The reforms currently being implemented at DeCA may have some level of justification from a business perspective. However, from a benefit perspective, the reforms are negatively impacting the benefit through higher prices and loss of topselling, high-quality national brands on the shelf.

Essentially, current reforms are shifting the cost of the delivery of the benefit onto the beneficiaries and the industry. This, in our view, is leading to an erosion of patron confidence in their earned benefit as evidenced by declining sales, transactions and units purchased as well as shrinking market baskets. ...

Read more TOM GORDY INTERVIEW ...


NEXCOM TACTICAL GEAR UPDATE
Mission-Essential Category Gets Strategic Shift

 

From Bangor, Wash., to Bahrain and beyond, Navy Exchange Service Command (NEXCOM) tactical departments are adept at ensuring their patrons have the products they want for their respective missions — whether Pilot, Seabee, SEAL or regular Sailor — wherever they serve, just when they need them, and at a savings versus outside the wire. NEXCOM’s tactical department has also adjusted its sails, and planograms, to allow more flexibility to highlight hot categories and be “first-to-market” with new products and suppliers.

Lisa Matthews, who was NEXCOM’s tactical buyer through July, reported that category sales through fiscal 2018’s Week 26, ending Aug. 4, 2018, were $4.24 million overall, down about one quarter of a percent from the prior year. Unit volume, however, had dipped, from 205,671 units last year to 192,151 this year, a 6.57-percent decrease (see chart). As of July, Courtney Batte, formerly the pet category buyer, had assumed responsibility for the tactical category.

“Overall sales in the tactical category are flat to last year,” Matthews said. “The fleet locations have been negatively impacted due to ship movement. Our top locations have seen fewer ships in port than last year, which has impacted business.” Thus far in fiscal 2018, five of the 10 top NEXCOM stores by sales volume were overseas operations. ...

 

Read More NEXCOM TACTICAL GEAR UPDATE ...


MILITARY RESALE MARKET DEMOGRAPHICS

 

Operating 504 exchanges and 237 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. ...

 

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EXCHANGE SALES

 

Direct Sales, FY 2017 Total:$10,594.50 (+2.9%)
All Sales in Millions ...

 

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AAFES EXCHANGE LOCATIONS

 

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NEXCOM HEADQUARTERS EXECUTIVES

 

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NEXCOM EXCHANGE LOCATIONS

 

 

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MARINE CORPS EXCHANGE LOCATIONS

 

 

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COAST GUARD EXCHANGE LOCATIONS

 

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COAST GUARD EXCHANGE
Headquarters Executives

 

 

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VETERANS CANTEEN SERVICE
Headquarters Executives

 

 

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DeCA EXECUTIVES

 

 

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Snapshot
RESALE SNAPSHOT — JULY 2018

 

Click Here for “RESALE SNAPSHOT” Totals