Posted on 05/10/2014 7:00:48 AM PDT by SandRat
All seven members of the Joint Chiefs of Staff testified Tuesday on the need to slow growth in military compensation and apply dollars saved to underfunded readiness accounts for training, equipment and spare parts.
But their united front for easing current budget burdens cracked over the notion of slashing savings for commissary shoppers.
Marine Corps Commandant Gen. James Amos called the proposal to cut commissary appropriations from $1.4 billion yearly down to $400 million within three years, and the cut in average shopper savings from 30 percent down to 10 percent, “a sore point for me.”
“That’s a 66 percent drop in savings for my Marines. I don’t like that,” Amos told the Senate Armed Services Committee. Families don’t either.
“The commissary issue itself is radioactive,” Amos said.
At the same hearing, Navy Adm. James A. Winnefeld Jr., vice chairman of the Joint Chiefs, defended lowering the appropriation for the Defense Commissary Agency (DeCA) in increments, starting with $200 million next year, and suggesting the initial impact at least would be modest.
“We think DECA can find at least the first-year savings through efficiencies, not price increases, especially since we exempted them from the 20 percent staff cuts that everyone else is taking,” Winnefeld said.
Later, Winnefeld said first-year savings might be achieved if Congress would just repeal a law requiring commissaries to stock only brand names.
It’s a law “apparently lobbied for by the food industry,” Winnefeld said, which “takes money right out of our people’s pockets. It really does.”
Industry sources said brand names do generate higher profits for suppliers but the issue is more complex and less disturbing than Winnefeld implied. Brand name suppliers can afford to support DeCA with trade offs in store services such as free stocking of shelves and with product promotions.
DeCA provided a statement explaining that commissaries evolved by design into a brand-name system to ensure “worldwide availability of quality, recognizable brand-name products such as Kellogg’s cereals, Kraft cheeses”
A brand name “bestows a known quality assurance that our military families rely upon wherever they serve. Providing food security and a familiar ‘taste of home’ is particularly important for those stationed overseas,” DeCA explained.
Though it doesn’t carry generic items, DeCA since 2000 has operated a “best value items” program with name brand products “equal to or cheaper in price than the private labels found downtown,” the agency said.
Winnefeld assured senators that the budget plan to squeeze commissaries doesn’t order any store closures. The goal is efficiency.
“Whatever they can’t ring out of efficiencies would be a price increase,” he acknowledged. “So you might go from the 30-percent claimed advantage [in prices] right now…to 26 percent” that first year.
In looking at the competitiveness of stores in each market, 26 percent savings should ensure that most thrive. But “there are probably situations where you might close one or two,” Winnefeld said.
The plan overall, he said, is “a heck of a lot gentler than it looks.”
Winnefeld did not describe the impact on commissaries if DeCA takes a $500 million hit 2016 and $1 billion hit starting in 2017, as is also proposed.
Amos didn’t either. But he said a better solution to raising prices would be “to force DeCA to become more efficient and figure out how to do it, and don’t put that burden on the back of our young enlisted Marines.”
“We don’t need to turn our back” on making commissaries part of compensation reform, Amos said. “But I think we are going at it the wrong way. I think we ought to force DeCA to do some of the things that the services have had to do over the last year to try to live within our means.”
Base exchanges or department stores used to depend on appropriated dollars too, Amos said, but they were forced at some point to be run like businesses. Commissaries should be made to run as efficiently.
What the commandant did not mention, but that resale officials describe often and openly, is that exchanges, because they are run as businesses, deliver a level of savings about half what commissaries do. Indeed commissary prices are a magnet to bring more exchange shopping.
There were other signs in the hearing that the Joint Chiefs were out of their comfort zone in discussing the military retail store system.
Sen. Jack Reed (D-R.I.), tried to sum up what he just heard on the commissary plan from Army Gen. Martin Dempsey, JCS chairman, and from Winnefeld whom Dempsey said “did most of the heavy lifting” on the issue.
“You would like to get efficiencies out of the system” and you believe DeCA “can generate these efficiencies,” Reed said. If DeCA can’t, “then they are going to have to curtail some of their operations.”
Given that, Reed asked Dempsey, have you “thought about a criteria for curtailment…something other then, ‘We’ll get some efficiencies’?”
“We have sir,” Dempsey said, “and I will tell you that commissaries has been the most difficult issue to wrap our arms around, because it’s very difficult to understand the functioning of the commissary, and the effect that a reduction in the subsidy will have, until you make the decision to do it.”
That’s why, Dempsey said, the first cut would be only $200 million. Even senior enlisted advisors, he added, “say ‘Let’s see what happens.’ Let’s see how much efficiency we can ring out of it in order to gain some savings.”
Because if “left unaddressed,” Dempsey warned, “we will be providing $1.4 billion in perpetuity” to subsidize grocery shopping, “and that just doesn’t seem to be a reasonable course of action.”
A day later, the House Armed Services Committee voted for only a $100 million cut in commissary funding in 2015. Its chairman, Rep. Harold “Buck” McKeon (R-Calif.), said he rejects increasing out of pocket costs for service families. But McKeon, whose family once ran a popular chain of cowboy clothing stores, also said he knows “efficiencies can be made that reduce the cost of the program without increasing prices.”
As Walmart grows in the grocery department the military commissary becomes less necessary to the buyers. Walmart IMO beats all competition as does COSTCO most of the time.
punish servicepeople and their households but reward illegals and workshy people with more cash
This country sucks.
Death of a thousand cuts...
If the commissary advantage is down to 10%, there is no point in going, especially if its out of the way. You can do better clipping coupons.
The ‘tax-free’ alone makes it worth the little further drive (PX-BX too)... Remember, the taxes go to make entitlement peeps happy unemployed.. :p
Commissaries are on the post where the service men live and work. Walmart is off post and some distance away. And I would guess, that in someplaces, for example Ft. Huachuca or Dugway Proving Ground, there may not even be a Walmart.
We do have a Walmart out side Ft. Huachuca.
It is a Walmart that we joke needs its own postal Zipcode, lay out of it stinks, stocking of it likewise stinks, and parking stinks.
Walmart beats all competition? That’s not my experience as a military retiree. The commissary beats Walmart hands down. Walmart is typically better on sale items, i.e. loss leaders, but they are substantially more expensive if one buys a typical week’s worth of groceries. If one purchases name brand items at Walmart, the commissary price advantage is even greater, and name brand items are generally the best quality.
What amazes me about this commissary discussion is that no one is talking about cutting food stamps in any way. The commissaries have long been touted as a form of military compensation for the sacrifices that military members make. While the US government isn’t contractually obligated to provide commissaries, it has long used them to encourage people to enlist and stay till retirement.
EBT is something that also subsidizes Walmart heavily, and I don’t hear many discussing that either. A good portion of Walmart employees are on EBT, and EBT purchases are a sizable chunk of Walmart’s grocery business.
I’m not opposed to cutting government, but I really, really want someone to explain to me why veterans always seem to be at the top of the list for reduced benefits. Actually, I don’t need it explained, I know why the Joint Chiefs are selling us out, but I don’t know why some conservatives are cheering these cuts. We’ve got $ trillions in handouts, I’m talking giving them something for nothing, to millions of Americans and American businesses (ethanol subsidies anyone), and some conservatives couldn’t care less as the politicians go after veterans, because “We gotta start cutting somewhere...” PUKE!
Yep. I'm in the military and 90% of my groceries are purchased at my local Walmart Supercenter. My rare visits to the commissary only serve to remind me why I don't go there more often. Shopping at the commissary has become a nightmare. Poor selection, empty shelves, out-of-date items, thin crowded aisles. And the savings just aren't what they used to be (though dairy and meats are still a little cheaper).
I won't shop at the exchanges for the same reasons unless I need uniform items. Honestly, the military could do away with both of these outlets and I wouldn't miss them at all.
I almost never buy anything at AAFES, because their prices are almost always higher even with the tax free advantage. They have captive audiences in some places overseas, but AAFES can’t compete with the likes of Amazon.com or Walmart.
Commissaries, on the other hand, are a very good deal if one buys a selection of groceries versus just searching for bargains. A Crest, for example, might undercut the commissary on some items, but they have much higher markups on other items. If one bought a typical week’s worth of groceries, one would save at the commissary.
I also agree with the article that the commissary increases AAFES sales. If people weren’t driving to the base for the commissary (savings), they almost certainly wouldn’t drive there to shop at AAFES.
I’m talking state side, not overseas. Overseas is an entirely different matter of course. The commissaries are much, much more important overseas. In some cases, military members may not have much of an alternative. They will be forced to pay the higher prices.
Another issue: if fewer people shop at the commissaries or stateside commissaries are eliminated, what effect will that have on prices? Will commissaries have to pay more since they are buying less from the manufacturers? Will they lose economies of scale that come from being such a big buyer? It seems likely, and that would further drive up prices for the military.
Except for a small amount of base housing, most of the people who live on base are single E4 and below. They live in barracks without kitchens and eat in the galley.
Service members with families, by and large, live off base, and probably closer to a Walmart than a commissary.
This is true.
They should cut welfare instead and leave the military alone.
I’m talking state side, not overseas.... What I hated about commissaries was the officers (wives) would fil three to four carts up with meat (in ‘72 to ‘74) and when the enlisted men got to get inside.....there was only chicken wings, gizzards and that was about it, left. Went to Kroger.
I respectfully disagree...there are many items that are much cheaper and as one example...the ammo in AAFES was at times 1/3 to even 1/2 the cost of the retailers in town...wasn’t subject to the price runups and gouging that was going on.
It all depends on what you’re looking for and the price match policy helps to keep prices in line with downtown...there are many deals to be had.
And what about the impact to those who serve on isolated stateside bases? The nearest grocery store to Edwards AFB is an Albertson’s about 20 miles away and I’ve done the comparisons...those unionized stores rape their customers...just one example...A 2 cup bag of Kraft shredded cheese at Albertson’s is $4+, at the Commissary, is less than $2. If Albertson’s isn’t good enough then tack on another 15 miles to the nearest WM...this is one way mind you and gas prices are over $4 per gallon...
Don’t anyone sit here and try to tell me that the impact on stateside folks is negligible to zero...not every base has a WM right outside the main gate...the EAFB commissary and BX are busy quite a bit.
I would dare to say that those bases that are in close proximity to civilian stores are doing a pretty good job of helping to keep prices down outside the gate as a simple matter of competition...had one poster on another thread claim that those stores were “better” because they offered tons of coupons...what they refused to address is the reason for those coupons...to increase foot traffic by military folks.
What does anyone think is going to happen to prices locally once the commissary is closed? The competition is gone...so then what? Same thing happens whenever the military get a raise, what happens to prices across the board? They go up, negating or eliminating the benefit of the raise.
The Air Force dorms at Edwards have kitchens...and those who can, choose to live on Edwards vs. facing at a minimum 40 mile RT commute everyday with gas at $4+ per gallon...
The nearest WM to Edwards is about 35 miles (1 way) away...
The grocery chains have been trying to kill the commissaries for years. The grocery stores right outside the post were 15% cheaper than the same chain’s store 30 miles away in a big city. If they kill the commissaries, the price of groceries at the stores near the bases and posts will go up 25% the next day.
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