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Editorial Comment — August 2016

The VCS: 70 Years Young …

Ever since it was established in post-war 1946, the purpose of the Veterans Canteen Service has remained the same: The comfort and well-being of America’s Veterans.

Although the goal hasn’t changed, the merchandise and venues are a bit different from what they were 70 years ago. Back then, the Canteen was like the five-and-dime, or neighborhood candy store, while VCS cafés resembled diners, offering comfort food and little more.

Today, renamed PatriotStores and PatriotCafés — and now PatriotBrews — they have long ago retired the mom-and-pop style, and have over the past two years rolled out a vibrant and inviting, up-to-date look in many stores coast to coast.

Behind the scenes, the VCS has adopted 21st-century merchandising, replenishment, inventory and supply chain models. Revenues have grown for each of the past 10 years; and at mid fiscal 2016, year-to-date sales are nearly 4-percent better than they were a year ago — topping the National Retail Federation’s forecast for U.S. retailers overall — demonstrating the esteem in which Veterans and their caregivers hold the canteen service.

A fixture in the communities it serves, the VCS supports numerous VA-sponsored events, such as the National Veterans’ Wheelchair Games, and continues to look for new ways to make itself more valuable to its customers.

Congratulations, VCS, on 70 years of Value, Convenience and Service! You have earned the gratitude of Veterans and their caregivers all over the country and done the VA proud with your exemplary service.

Who’s Minding the Stores?

Shortly after the federal government’s fiscal year 2016 got underway last October, following a 2-percent drop in FY15 Defense Commissary Agency sales, the military resale community was heartened to hear the DeCA director’s sales goal for the upcoming year: an increase of 3 percent.

Less than a week later, the first month’s sales results were in: down 4 percent.

With 11 months left in the year, that didn’t seem to be a cause for great alarm. But as those months went by, with year-to-date comparisons coming in as down 6.1 percent, down 4.8 percent, down 5.1 percent, down 4.4 percent, down 4.3 percent … worries grew throughout the community.

Today, with less than two months remaining, sales are still off for the year by 4.6 percent — more than $200 million.

All the while, the stated goal of a 3-percent sales increase has never been altered, and rumors have been heard in some quarters of store-level repercussions if it isn’t met.

Perhaps someone in the upper echelons hasn’t been paying enough attention to the purpose of the commissary: to provide an undiminished benefit in supplying food and groceries to servicemembers, their families and other authorized patrons.

Of course, it’s difficult to keep focused on the benefit with all the distractions at headquarters: an expensive new Enterprise Business Solution (EBS) that doesn’t quite work the way it was expected to; Congressional Budget Office numbers, as well as internal calculations, that don’t bear out consultants’ glowing estimates; percentages of savings that seem to change day by day; a plethora of solicitations, RFIs, RFPs and BPA work orders for private label, variable pricing, market basket surveys, benchmarking, shelf-stocking and other initiatives; a regiment of pricing specialists taking up residence; a reduction in employee morale possibly brought on by a suspicion that they’re not being told the whole story about what’s going on; the looming specter of privatization … and unintended consequences lurking in every corner.

Insofar as they have been able, resale suppliers have continued to do their part, supporting couponing, off-site and case-lot sales, setting up displays where permitted and spending promotional dollars where available.

Yet the results have been lackluster; patrons apparently spend less on each visit than they did last year. Have they been spooked by consumer media reports of DeCA’s upcoming transformation and social media presentations of glitches in the system?

By the end of DeCA’s third quarter, troop strength had decreased less than 1 percent over the past year, and transactions were down a little under 2 percent, but the slide in sales continued to slip toward 5 percent.

One might get the impression that some of the agency’s activities are pushing patrons away, and that impacts exchange sales as well as commissaries.

DeCA must shift more focus away from its internal workings toward the stores. It must listen to experienced grocery retailers, many within its own ranks and its industry partners, to come up with incentives to bring back lost customers and keep those who are starting to stray outside the gate … incentives that aren’t going to be found in a brand-new store label, and certainly not in raising prices on items worth driving 25 miles or more to take advantage of … before the millions of dollars gushing out for all the “transformation” efforts become a huge waste of taxpayer dollars.

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