Posted on 04/27/2014 6:49:36 PM PDT by SandRat
A retired Army sergeant first class living in Northeast El Paso, Texas, says he and his wife will stop shopping on Fort Bliss if the Department of Defense allows commissary prices to climb, as planned, to within 10 percent of local grocers.
“I am not the only one here who thinks the same way,” said Louis Lindemann. “By the time we pay for gas alone, we could go to the local Albertson’s or the Walmart food store around the corner. The commissary already has a number of items we can purchase cheaper on the economy.”
His email arrived moments after I had concluded a phone interview with retired Army Major Gen. Richard E. Beale Jr., former director of the Defense Commissary Agency (DeCA), who believes Lindemann is correct.
So many retirees, Reserve and Guard members and even active duty families would stop shopping on base, if DoD is allowed to slash commissary budgets, that the entire military resale system would be at risk, Beale said.
Defense Secretary Chuck Hagel, backed by the Joint Chiefs of Staff, wants DeCA’s annual appropriation of $1.4 billion cut to $400 million by 2017. Average shopper savings of 30 percent would fall to 10 percent as commissaries become self-supporting like the military exchange systems.
Beale, who led DeCA from 1992 to 1999 both as an officer and as the agency’s first civilian director, said such a deep cut is enormously risky.
“The role of the dice is not just on whether the commissaries will survive, it’s whether the entire system can survive,” including exchanges and the on-base quality-of-life programs that exchange profits now support.
“I certainly understand the predicament in which our civilian and military leaders find themselves,” Beale said to begin our interview. With defense budgets squeezed and automatic cuts threatened if Defense officials don’t identify enough cuts on their own, “there are no good choices.”
However, Beale said, leaders are mistaken to assume commissaries can be converted into self-supporting stores and still offer discounts that attract enough customers to sustain a low-cost grocery benefit.
“What makes the commissary benefit are the appropriated dollars,” Beale said, urging me to underscore the point. “And every dollar you take away from the appropriation is a dollar out of service members’ pockets.”
Defense officials believe by 2017 they will only need $400 million a year for commissaries, to transport goods to stores overseas and to subsidize stores in remote stateside locations. Otherwise, stores can operate on their own if prices are raised, and average savings lowered, from 30 percent to 10.
What they overlook, Beale said, is how critical robust commissary savings are to exchange operations. Traditionally, 35 to 45 percent of exchange shoppers are enticed to shop on base by commissary savings, where food prices are set at cost plus a five percent surcharge.
If those prices climb 20 percent to be able to pay staff salaries and other costs, not only would the number of commissary patrons fall sharply but also exchanges would see their businesses plummet, Beale predicted.
“Can you put commissaries on a cost-recovery basis using a business model like the exchanges and JC Penny and Walmart? In theory yes,” Beale said. “In reality the answer probably is no.”
The big reason is patrons won’t accept it.
“Every dollar you take away from the appropriation has to be paid by someone. That someone, in this case, is the patron,” Beale said, “because DeCA has no other way of raising revenue.”
Without hefty savings, many retirees, Guard and Reserve personnel and even active duty families living far from base have little incentive to drive past their local supercenters and grocery stores to shop on base.
Another reason the idea is risky, Beale said, is that as food discounts narrow and sales drop, commissary suppliers will raise product prices to try to offset lost profits.
Beale recalled that while he was DeCA director, the agency also was under enormous pressure to reduce its appropriations. That’s when it began using a nationwide estimate of average shopper savings to tout the benefit.
“The notion of 30 percent savings on groceries for the military community was a useful sound bite, slogan, bumper sticker and rally cry,” he said. But “it has now created a perception of a standard which can be trimmed with minimum consequences.”
The 30-percent savings estimate is derived by comparing DeCA’s Basic Ordering Agreement price points, as offered by suppliers, with pricing strategies used by grocery chains. But what commissary shoppers actually save varies widely by region based on local food prices, Beale explained.
“For example, in my last year at DeCA when the published national savings exceeded 29 percent, the Southern Region savings were in the low 20’s whereas in the Northwest-Pacific region savings were in mid-30’s. And so it went across the country,” Beale said.
More than half of active duty forces and retired military live between Tidewater, Va., and East Texas, he said, where actual commissary savings are “much lower than the published national average. I have maintained that position personally since I was the director. Publicly, I stuck with the party line. In retrospect, that may have been a mistake.”
It means that if commissary prices are allowed to pop by 20 percent over the next three years, shoppers in the south and southeast are likely to see their discounts from shopping on base all but disappeared.
“Basing budget decisions for DeCA, and the welfare of service members, on an average national commissary savings figure is about as useless as trying to calculate an average supplement for basic housing allowances by relying upon a single nationwide figure for cost of housing,” Beale said.
And so a figure used for the last 15 to 20 years to help justify the commissary benefit is now used to justify reducing it, he said.
A better figure for leaders to weigh today might be “one quarter of one percent of the defense budget.” That’s all that’s needed, he said, to preserve a benefit the U.S. military has enjoyed, in some form, for the past 189 years.
Send comments to Military Update, P.O. Box 231111, Centreville, VA, 20120, email milupdate@aol.com or twitter: Tom Philpott @Military_Update.
TOM PHILPOT is a syndicated columnist and freelance writer. He has covered the U.S. military for more than 30 years. Military Update, which reaches two million readers, covers breaking news affecting the lives of service members, retirees, Reserve and Guard members and their families.
Der Fuehrer’s Cloward - Piven’s effects continue on their path of destruction...
Active Duty/Retiree ping.
“A domestic peace force just as big and well-funded as the US military...”
That means TWO things:
1. Boost spending on new, weird types of goons
2. Radically cut-back military spending
His plan is the have a new entity that goes around suppressing the US populace —a non-stop SWATting of the whole USA.
It's called lying, sarge and it's always wrong.
They demand that the soldiers who give so much to defend America bend over and get the shaft, but when it come to the post office we are all supposed to bend over and take it up the *$$ for their incompetence and just keep feeding them more of our money!
The commissary and PX system will be gone within 10 years or sooner if the Obama Administration can manage. Replacing them will be Walmart or some other big box discounter who will operate franchises on military installations in much the same way that Burger King operates today.
Savings will be very similar to that seen at the local Walmart, but the selection, service, and conveniences will be less.
You are exactly right.
commissaires do not offer "hefty" savings, not when you consider the 5% and the tipping...not when you take into account that people off base have to travel some good distances to get there...
but they do offer good savings is you're careful....
back when hubby was "in" the area had coupon wars with two different chains offering double and triple coupon savings....it beat the commissary in a heartbeat....
Being one of those old retired farts in the southeast the man is right.
I’ve got 2 Food Lions within two miles of me and two Wal-marts and a Sam’s Club within 3 miles.
The closest Commissary is through a check point and on Ft Bragg seven miles away.
There are still enough good deals out there for us to plan a trip to get a few good items once a month or so.
commissaires do not offer "hefty" savings, not when you consider the 5% and the tipping...not when you take into account that people off base have to travel some good distances to get there...
but they do offer good savings is you're careful....
back when hubby was "in" the area had coupon wars with two different chains offering double and triple coupon savings....it beat the commissary in a heartbeat....
well so what? big woop You can do better off post anyway at Wally World
you forgot to throw in the fruit & veggies that spoil by the time you get it home...
give the franchise to walmart.
Not in many places overseas you cant.
I have found the same thing. It is not any cheaper to shop at the commissary than it is to shop at HEB. The commissary does have good deals on certain items that we go buy once in a while and occasional sales like the case lot sale that are good deals.
ok I’ll give you overseas
DeCA’s annual appropriation of $1.4 billion
The role of the dice is not just on whether the commissaries will survive, it’s whether the entire system can survive,” including exchanges and the on-base quality-of-life programs that exchange profits now support.
.........I think about leaders like Obama, Hagel, Biden, Pelosi and Reid and then in the same thoughts I remember the final picture of Mussolini and his wife and Hitler’s and Ava’s corpses and the Japs we hung and most recently Hussein.
Two thoughts:
1. Were Hussein, Hitler, Mussolini and the Japs bigger enemies of the American people than Obama, Hagel, Biden, Pelosi, Reid and others are proving to be? You be the judge.
2. “Every dog has his day”.
Try that in Hawaii.
That was the retired MGEN/Director of DeCA who said that, not the SFC.
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