Connect with us

Genel

Exchanges Resist Plan To Merge With Faltering Commissaries

Defense Department officials want Congress to include in its fiscal 2019 defense policy bill new authorities to execute its plan to merge the Defense Commissary Agency (DeCA) with the three military exchange services under a single system of on-base stores to be called the Defense Resale Enterprise.

Resisting that effort out of public view are executives of the exchange services who fear their own success in running base department stores, gas stations and convenience outlets, which generate profits to support on-base morale, and recreational activities, could be put at risk by some of the policy executives they blame for deepening the decline in sales across the commissary system.

Congress two years ago gave the department authority and new tools to “transform” base grocery stores, which for generations relied on taxpayer dollars to offer a wide array of brand products to military families and retirees at cost.

In addition, shoppers pay a five percent surcharge to fund the modernizing or replacement of aging commissaries.

The goal of recent reforms is to turn commissaries into profit-generating stores, similar to exchanges, thus lowering the $1.3 billion annual subsidy so that money can be diverted to more critical needs for sustaining a ready fighting force.

Congress insisted, however, that overall savings to patrons not drop, even as DeCA phases in more business-like practices. Two big ones are variable pricing of goods to replace the tradition of selling at cost, and adoption of commissary-label goods to compete for patron dollars with a narrowed selection of national brands.

Manufacturers over the past year have competed through pricing for commissary shelf space. Surviving brands, in turn, often have cut coupon offerings and other promotions to make up for lower pricing, say industry sources.

Continue Reading
Click to comment

Leave a Reply

E-posta hesabınız yayımlanmayacak. Gerekli alanlar * ile işaretlenmişlerdir