ECN CoverE&C Commissary News

Editorial Comment — September 2016

Wake-Up Call …

The fiscal year is just about over ... look at the numbers!

And then let’s all open our eyes and ears and look inside the gate at the damage being done to the commissary benefit.

The resale community has watched and waited to see if there would be any uptick in commissary sales ... but instead, sales continue to spiral downward.

So to all those who have failed to address the relentless decline in commissary sales, whether at OSD or in DeCA top management, here’s the irony of the quest to impose “best business practices” in every corner of the benefit: if you were already in charge of operating the new version of DeCA, or any major corporation, and you were held directly accountable for generating sufficient revenues to pay salaries, medical insurance, rent, utilities and other overhead, and the many other costs of doing business, you probably would have been replaced by now.

Keeping sales up, as much as keeping expenses down, is the first order of business.

It’s one thing to deliver a benefit — pre-transformation DeCA was quite adept at that — it’s a different thing to completely reinvent the system as a business and attempt to compete directly with grocery chains in ways that are not and never have been within DeCA’s core competencies.

For four consecutive years, sales have fallen; from a high of more than $6 billion in 2012, based on current data they will end this fiscal year around $5.2 billion. That’s a loss of about 3.5 percent per year. And it should not go unnoticed that over those four years the cost of most groceries has generally gone up ... factor that in, and the loss is even greater.

Before the Pentagon or DeCA makes any further changes, maybe it’s time for those involved — especially those who can only shop civilian stores — to visit commissaries throughout the system at prime shopping hours to see the families checking out the substantial discounts that manufacturers provide their stores in support of the benefit, and also to go online and look over the special promotions created for the military shopper, all the coupons, contests, scholarships, giveaways and support for military-related causes.

Consider the promotional dollars and shopping excitement being taken away from military families by the focus on driving COGS to the barest minimum, cajoling and threatening; instituting variable pricing strategies that diminish the worth-the-trip savings on destination categories; and establishing a private label program to generate a profit margin to defray the cost of operations. Consider all the valuable offerings that will vanish by dismantling and degrading the system and its longtime supplier support foundation with the so-called “transformation,” which to many appears to be another case of “if it ain’t broke, fix it till it is!”

Certainly no one should be permitted to make these decisions without knowing all the ins and outs of the system, least of all an outside consultant that has no connection with or thorough, in-depth knowledge of military resale, and scant if any connection with or understanding of military patrons. Nor should such decisions be left in the hands of anyone so concerned about his or her own position as to remain silent and not speak up for the benefit in its time of crisis.

Would you want anyone who considers him or herself first, before the agency — or worse, the benefit — overseeing your position? ... We think not!

It’s time to put on the brakes, step back, admit the mistakes and correct them; and allow the system to operate as it was intended — as a benefit — and not primarily as an exercise in offsetting costs.

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