RISKY BUSINESS: COMMISSARY SAVINGS REDEFINED TO 20% STATESIDE
Year after year the Defense Commissary Agency (DeCA) told Congress and store patrons that commissary shoppers saved an average of at least 30 percent on brand name groceries over prices in commercial stores and supermarkets.
The claim lost some credibility over time with the rise of big box discounters and retail supercenters. Also, DeCA’s price-tracking methodology lost support in Congress and at the Pentagon amid a push to transform commissaries into more business-like operations, using commercial tools such as variable pricing and private label brands to try to reduce DeCA’s $1.3 billion annual appropriation.
DeCA officials now concede the 30-percent savings figure didn’t include price comparisons at Walmart Supercenters. Nor did it consider the popularity of private label goods that outside grocers find so profitable. Nor did DeCA adjust its own estimates to give greater weight to products in highest demand with lower savings.
On Monday, in response to a congressional mandate, DeCA released new set of “baseline” estimates of commissary savings that reflect these factors and more.
Without reducing the value of the shopping benefit, DeCA says, it has redefined how it measures savings. Global savings across all 238 commissaries, are calculated now at 23.7 percent and savings stateside at 20.2 percent. At 61 overseas commissaries, average savings are 44.2 percent against local food prices.
To be able to shift to variable pricing, DeCA also is publishing average savings by seven U.S. commissary regions. The 36 commissaries operating on New England bases, for instance, provide average savings of 21.4 percent. Across 30 commissaries in the South Atlantic states, savings average 19.9 percent.
The combined region of Alaska/Hawaii, with nine commissaries, offers the highest savings for patrons at 32.6 percent. Twenty commissaries in the Rocky Mountain region, which runs south from the Canadian border through Arizona and New Mexico, had the lowest savings of 17.6 percent compared to prices off base.
The Pacific coastline states, with 31 commissaries, provide average savings of 20.9 percent while 18 military grocery stores in North Central states save shoppers an average of 20.2 percent.
“This enhanced way of calculating savings doesn’t change the actual dollars that patrons save, but it will give patrons a better understanding of price comparisons in their local area,” said DeCA Director Joseph H. Jeu in a press released Monday unveiling revised savings estimates.
A day later Jeu announced that, effective June 3, he will retire after six-and-a-half years at DeCA’s helm and more than 38 years’ total federal service.
“The transformation is well on its way and the right people are in place to see it through,” said Jeu’s statement on Tuesday said.
Military exchange executives, said industry sources, were surprised and upset by DeCA’s announcement on the new baseline savings. Exchange directors have argued for years that their own store traffic and sales performance are linked to the popularity of commissaries, and commissary sales are falling.
Click here to read more...