DECA: WE’LL ADD PRIVATE LABELS BUT SUSTAIN BRAND SAVINGS
Commissary shoppers will see no drop in savings on brand name items even as the Defense Commissary Agency begins to offer better prices through its own private label products, said DeCA Director Joseph H. Jeu.
“We will be maintaining overall savings on branded products, so if patrons choose not to purchase a private label they will still be at least as well off as they were previously,” Jeu explained. “Patrons who do choose to purchase private label will see their cost for the basket of goods they purchase come down further.”
Jeu’s assurances appear timely as patrons and advocates grow concerned over the rapid changes planned to store operations. They see DeCA as unfamiliar with developing and marketing private label products. Meanwhile, some suppliers complain of their prices being challenged, their shelf space reduced or their products deleted from commissary shelves.
“Our priority is preserving the value of the benefit, which essentially is the savings customers see when they shop,” said Eileen Huck, deputy director of government relations for National Military Family Association. “But we also care about the customer experience in terms of number and quality of products on shelves.”
“There seems to be a whole lot of change going on,” Huck said. “Some [supplier] relationships, once they’re undone, are we going to be able to build them again? At what point does this inevitably go too far to do that?”
Against such concerns Jeu described in fuller detail changes occurring to commissaries. He did so in an emailed letter after reading our column on aggressive price negotiations DeCA is conducted with product suppliers. He and DeCA staff also provided written responses to 30 follow-up questions.
DeCA is narrowing the number of national brand items it sells on advice from industry experts who argue “over-assortment” creates inefficiencies in sourcing and stocking, and crimps shelf space for high demand items, leaving popular products too often sold out.
Narrowing the assortment also creates space for private labels, which DeCA plans to introduce next April or May. Patrons at some stores already have been asked for their opinion on some DeCA label designs.
Even as stock selection narrows, Jeu said, “commissaries will continue to carry a wider product selection than many private sector retailers carry today.” Shoppers still will see “a wide variety of price points and brands.”
In deleting “lower-performing items or brands,” Jeu said, DeCA is making “each of these decisions thoughtfully and based on careful data analysis, including sales and unit volume, savings, shelf space productivity and patron loyalty. We realize some industry members attempt to frame this as a major impact and negative for patrons, but in reality the changes will be subtle and any brand truly relevant to our patrons' loyalty will remain prominent.”
To hear DeCA criticize its current operations in comparison to outside retailers startles some patron advocates. It reflects a shift in goals for Congress and Defense officials toward lowering DeCA’s $1.3 billion annual appropriation while promising to preserve the value of the shopping benefit.
“DeCA’s mission has never been the same as traditional retailers,” Huck said. “It’s always been to deliver high quality groceries at low cost to families, and not worry so much about generating revenue.”
DeCA now sounds like revenue is a priority, Huck said. And while it expects to achieve it by squeezing better prices from vendors, she said, “our concern is that patrons are going to pay that price one way or the other.”
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