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Military Life News, Commissary Rewards and Military Discounts

Have You Noticed Price Changes at Your Commissary?

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Prices have already started shifting at the commissary under the new variable pricing strategy. Have you noticed a difference? The change began earlier this spring when the commissary tested the new program out in 10 stores.

Now the variable pricing strategy is being implemented across the country. Don’t worry; you’ll still see great savings.

Have You Noticed Price Changes at Your Commissary?

Michelle Hooper, a customer service ambassador at the Luke Air Force Base, Arizona, Commissary, scans prices. Luke won the 2015 Defense Commissary Agency’s Director’s Award for the Best Superstore. (DeCA photo)

If you missed the big announcement, last year the National Defense Authorization Act (NDAA) authorized a significant change in how the commissary determines the price of goods. Previously, the commissary set prices at cost plus a 5 percent surcharge. That surcharge money was used to maintain commissary facilities and to build new ones, such as the $38-million commissary at Fort Belvoir.

DeCA, the Defense Commissary Agency, which operates the commissaries, is funded by taxpayers’ money with a budget of $1.3 billion annually. Washington has been trying for years to get the commissary to be more self-sufficient and rely less on federal funding.

This year they are finally attempting to do just that. Variable pricing is one of their strategies. The commissary will also be introducing store brand products as well.

What is variable pricing?

Previously, the products at the commissary were sold at cost plus the 5 percent surcharge. Under variable pricing, the prices of goods will no longer be that simple.

Instead, many factors are taken into consideration when setting the price of products. This includes the market price, cost of obtaining the item, how well the items sell and more.

This isn’t something new the commissary came up with or that those in Washington fathomed. It is how commercial grocery stores determine their prices. The commissary is now embracing a similar pricing system.

Prices have always changed at the commissary based on the cost the commissary incurs for items from manufacturers. Many factors cause manufacturers to change the price they charge, such as weather and their cost of doing business.

Prices will now fluctuate with the market instead of simply with the manufacturers. While some prices might be going down, others might go up. Overall savings at the commissary will not change however.

How much will each region save?

Commissaries are grouped into regions. Market research is conducted in each region to determine the prices goods will be set at. This includes comparing the prices of about 1,000 products locally as well as the estimated 38,000 products that are checked nationally.

The cost of living varies across the country and with that is the cost of food. Researchers then are tasked with comparing the prices of items at different grocery stores across individual regions to determine the best price to set commissary products at. As the cost of living is higher in some areas and lower in others, so too will be the savings level in each region.

These savings will range from 17.6 percent to 44.2 percent over commercial grocery stores depending on which region you are in. Below are the regions and the overall savings expected.

Region            Savings %

New England            21.4%

South Atlantic          19.9%

South Central           18.1%

Pacific                       20.9%

Mountain                  17.6%

North Central           20.2%

Alaska/Hawaii          32.6%

Overseas                    44.2%

Which region am I in?

Now that you know how much savings each region is expected to save, you may want to see which region you are in. Commissaries aren’t in typical geographical groupings, as Virginia is included in the New England region as opposed to the South Atlantic for example.

To find out which region your commissary is in, look for your military installation on this map. Are you in the region you expected? How do you feel about the savings percentage your region is expected to get?

Next time you go to your commissary, check the prices and see if you can tell a difference.

Have you noticed a change in prices at your commissary? Which items did you notice have a price difference? Tell us in the comments section.

Variable Pricing Pilot Program Kicks Off at 10 Commissaries

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Two big changes will be coming to commissaries around the world thanks to the 2017 National Defense Authorization Act (NDAA).

Currently the Defense Commissary Agency (DeCA) receives $1.3 billion in taxpayer funding annually. That funding covers the costs of operating the commissaries. Patrons are able to purchase goods at cost plus 5 percent. The 5 percent surcharge covers construction, equipment and maintenance to improve facilities.

Now the government wants commissaries to be more self-sufficient and not rely on such a huge amount of taxpayer money.

The 2017 NDAA, signed into law under the Obama administration, allows DeCA to start working on this in 2 ways. The first is introducing variable pricing and the second is creating a store brand or private label products. Variable pricing will be the first phase of this move and will start in 10 commissaries.

What is variable pricing?

Instead of the prices of goods at commissaries simply being the cost DeCA gets items at, prices now will be determined through multiple factors. This includes the cost of obtaining the item and the market price to name a few.

Commercial grocery stores use this same strategy to determine their product price points. Prices will shift with the market, but overall savings at the commissary will remain the same.

Under the new pricing model, the prices of products sold in commissaries will be based on a specific percent of savings that the same item would be sold for in commercial grocery stores in that particular region. That means that prices will no longer be uniform across commissaries and will instead vary by region and country

Don’t panic. That does not mean prices are about to skyrocket.

Each region has a specific saving percentage required under DeCA’s regional savings index. Overall, commissaries in the United States will have a 20.2% savings over commercial grocery stores. Prices vary even more overseas, so the total savings globally is set at 23.7%.

Depending on where you live, the cost of living can be higher or lower. To keep shoppers happy and enjoying the commissary benefit, different regions will see different prices, but all patrons will see a savings overall.

There are 36 commissaries in the New England area that will see a savings of 21.4% over commercial grocery stores. The 30 commissaries in the South Atlantic area will save 19.9% while the 33 commissaries in the South Central area will save 18.1%. The South Pacific area is slated for a 20.9% savings and the Mountain region will have a 17.6% savings. The North Central area only has 18 commissaries but they will all have a 20.2% savings while the 9 commissaries in Alaska and Hawaii will see 32.6% savings. Commissaries abroad will have a fantastic 44.2% savings over commercial grocery stores.

How did DeCA come up with these percentage savings?

Each market was evaluated independently and the prices were compared to commercial grocery stores in each area. Local and state food tax was taken into consideration as well as the 5 percent commissary surcharge.

The cost of living index was used to determine prices abroad. Each month all of this data will be recalculated to ensure prices stay on schedule with the appropriate savings over local grocery stores. As many as 1,400 items at each commissary will be compared to commercial grocery stores each month to ensure accuracy.

The list of the first 10 commissaries to use variable pricing has not been released as of publishing time. If we didn’t tell you variable pricing was coming, would you notice the difference?

Next time you shop at the commissary have a look around at prices and see if you notice a difference. Perhaps your commissary will be one of the first 10 to try out variable pricing.

What are your concerns about variable pricing at commissaries?

How a New State Residency Bill Benefits Military Spouses

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Military spouses may soon find filing taxes a little less confusing if H.R. 5428, the Military Residency Choice Act, is signed into law. The bill aims to make establishing and maintaining state residency much easier. Currently, the law can be very confusing and many families may be filing their taxes incorrectly without knowing it.

Under the Service Members Civil Relief Act, military service members can keep their residency in one state no matter where the military sends them. For the purposes of filing taxes, that means that if a service member enlisted in the Navy in Alabama and is currently stationed in Virginia they only pay income tax to Alabama, not Virginia.

It isn’t that simple for military spouses however. Prior to 2009, military spouses had to change their residency every time they moved to a different state with their service member. This made filing taxes and voting difficult. It prevented many military spouses from finding employment after each move.

In 2009, the Military Spouse Residency Relief Act (MSRRA) made maintaining residency in one state possible for military spouses. A military spouse simply had to establish residency in one state and was then able to keep that no matter what state the military sent them to next. The MSRRA does not allow military spouses to claim the residency of their service member however unless that was their state of residency when they were married. It also does not allow military spouses to randomly decide which state they will claim residency in.

Under the proposed Military Residency Choice Act military spouses will be able to use the same state of residence as their service member even if they have not lived in that state.

They will also be able to vote through absentee ballot for that state as well. This does not let military spouses keep their driver’s license from that state though; that is a state by state case.

H.R. 5428 specifically states:

The  spouse  of  a  service member may  elect  to  use  the  same  residence  for  purposes  of  taxation as the service member regardless of the date on which the  marriage  of  the  spouse  and  the  service member  occurred.

This bill is only in the early stages of the process of becoming law. It was introduced in the House of Representatives and referred to the House Committee on Veterans’ Affairs. If it does pass, it will go into effect 90 days after the enactment. That doesn’t help military spouses for this tax season, but perhaps by next year it will have passed.

In the meantime, ask yourself what the most beneficial option will be for your family.

Is your spouse’s state of residency one with harsher tax laws? Is it worth it to change your residency?

Seven states do not have personal income tax including: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming. New Hampshire and Tennessee also do not have income tax, but they do have tax interest and dividends.

If you earn an income and your current residency is in Florida and your military service member maintains Alabama as their residence, it could be beneficial to maintain a Florida residency where there is no income tax. While the MSRRA and the proposed Military Residency Choice Act are intended to make taxes easier for military spouses, it may be wise to consult a tax specialist if you have questions.

Remember, you cannot choose a random state to be your state of residency. You must establish residence by living in that state and maintaining sufficient contacts in that state. That can include owning property in the state, holding professional licenses in that state and voting there as well.

What do you think of the proposed Military Residency Choice Act?

3 Commissary Myths that Need to Be Busted

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For the past 2 years, there’s been a lot of talk about possible changes to the commissaries. The talk has come from all directions. There was talk about possible changes from Congress. There was talk about possible changes from the consultants hired by the Defense Commissary Agency. There was talk about possible changes from commissary employees and shoppers.

Now commissary shoppers may be asking themselves which (if any) of these commissary changes are happening. Here’s a little hint: only 1 of the proposals is scheduled to happen in 2017.

What about the other possible changes? For now, these recommendations move to the land of myths and rumors.

Here are 3 myths that you may hear commissary shoppers talking about.

Commissary myth #1: DeCA is merging with the military exchanges.

If you thought this was happening, it was because the Military Compensation and Retirement Modernization Commission presented a proposal with 15 recommendations to modernize the commissaries. One of those recommendations was a proposal to combine the commissary and exchange systems into a single defense resale organization. This proposal was intended to reduce the overhead costs of operating the commissaries and exchanges separately.

When MilitaryShoppers wrote about this proposal nearly 2 years ago, readers said that this proposal was a terrible idea. Repeatedly, readers wrote this comment:

“Do not combine. We would lose our privileges.”

For now, the commissary and exchange are not combining.

The statement that DeCA is merging with the exchanges is a myth, according to DeCA officials. They also said

“DeCA leadership continues to explore different levels of cooperation with the military exchanges. To the extent the Defense Department plans to implement any of those options in future, DeCA is committed to ensuring that employees are well-informed and equipped with information to understand any potential impacts.”

Commissary myth #2: DeCA is exploring a privatization pilot program.

Privatization is happening, right? Wrong, according to DeCA officials.

“Upcoming pilot programs will not be exploring potential privatization (i.e., a private sector company taking over DeCA operations). Privatization was not a part of the changes proposed in the 2016 NDAA and is not planned for DeCA at this time.”

The proposal to privatize the commissaries was discussed repeatedly over the course of the last 2 years. At one point, several large unnamed retailers were approaching DeCA and expressing their interests in running the commissaries.

Like the recommendation to merge the commissaries with the exchanges this idea was met with many vocal opponents. They argued that privatization is not the answer to Congress’s budget concerns. Skeptics argued that privatization wouldn’t save the taxpayers money and would lead to price increases for commissary patrons.

Privatization is off the table. For now.

Commissary myth #3: DeCA’s mission is changing.

“DeCA’s mission has always been to offer the right products at the right prices as a critical benefit to its patrons,” DeCA said on its website.

One proposal, a private label brand, is happening and DeCA is confident that is program will “offer more flexibility in how DeCA delivers that benefit, and positions the agency to be more cost-effective, efficient and better able to protect the benefit for future generations of patrons.”

Congress wants DeCA to be cost-effective and efficient. Veterans want to keep this military benefit without increasing the prices or surcharge. Military families want groceries at a competitive price compared with civilian grocery stores.

We all want the same things for our commissaries. Will the private label brand be enough to save the commissary benefit without raising prices or reducing the benefit?

We’ll just have to wait and see.

Are you hearing any other rumors about changes to your commissary? Tell us in the comments section.

Commissaries Will Offer 400 Private Label Items Starting in May

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For the first time in its history, private label items will be found in your military commissary.

Commissary shoppers know (and often complain) that generic products aren’t available at the commissary.

If you want ketchup, you buy Heinz.

If you want oatmeal, you buy Quaker Oats.

If you want cola, you buy Coca-Cola or Pepsi.

The same quality for a lower price product often referred to as a generic brand, like the Best Value brand found at Walmart stores or the Market Pantry brand in Target stores, isn’t an option at your commissary. There isn’t a store brand for DeCA.

Soon that will change.

The Defense Commissary Agency selected MDV SpartanNash LLC to be its first private label supplier.

“We are excited that DeCA has selected us to support this important initiative, and to provide commissaries with private label products for the first time in their history,” said Dennis Eidson, SpartanNash CEO and Chairman of the Board in a press release.

“This partnership will provide military families with quality options and the opportunity to stretch their food budget. Many of our active duty and veterans are on a limited income, and their military benefit provides savings which are key to meeting their families’ food and household needs. Patriotism is one of our core values, and we are extremely proud to serve our nation’s service members, their families, and military partners around the world,” Eidson said in the press release.

Starting in May, commissary shoppers will see private label items on the shelves in their stores. DeCA officials said the plan is to introduce an initial assortment of 400 items in commissaries worldwide in May 2017. The amount of private label products will be gradually increased with the goal of 1,000 available at commissaries by the end of 2017.

DeCA’s director and CEO Joseph H. Jeu said he is excited to bring private label products to military families.

“They are smart, savvy shoppers who know that private label products are cost-effective alternatives to national brands. We’re excited to help them save more at our commissaries,” he said in a press release.

DeCA reported that 60% of commissary patrons said they would be interested in a DeCA private label.

“Our customers have been asking for private label for a long time,” Jeu said.

Customers aren’t the only ones asking for private label products. Congress had a hand in this decision too.

The 2016 National Defense Authorization Act (NDAA) nudged DeCA to explore the option of private label products. DeCA has been researching ways to keep the commissaries open with less federal funding. The private label brand is only option out of many that DeCA is exploring in the next year.

What do you think of DeCA’s decision to have a private label brand? Would you buy private label products if they were available at your commissary?

Should BAH Be Excluded from Food Stamp Eligibility?

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In 2015, more than $80 million in food stamp benefits were spent at military commissaries. That is an astonishing figure and that amount does not cover every family that needs financial help to feed their family. There are many more military families that would benefit from food stamps, now known as SNAP, the Supplemental Nutrition Assistance Program.

Congresswoman Susan Davis, the Ranking Member of the Military Personnel Subcommittee, introduced the Military Hunger Prevention Act. Its purpose is to exempt the military’s Basic Allowance for Housing (BAH) in the determination of a military family’s eligibility for particular federal benefits. This bill is specifically aimed at making it easier for military families to qualify for SNAP.

While BAH varies based on region, pay grade and dependency, in many cases it still is not enough to cover housing. This leaves families using other components of their pay to cover rent or mortgage that would otherwise go to food. Because of this, many military families are forced to use emergency food relief. Investigators at Camp Pendleton reported last year that 400 to 500 military families used one of the food pantries on base. That is just the statistic of one of the 4 food pantries on Camp Pendleton.

Rep. Davis introduced this bill after learning that numerous families in the San Diego area, specifically Camp Pendleton, were unable to meet the basic need to feed their families.

By removing BAH from the annual income of military families, more will qualify for food stamps. This shift may provide relief to the overwhelmed food banks.

The bill has been introduced and referred to the Committee on Armed Services as well as the Committee on Agriculture for further review.

In the meantime, military families will continue to stand in line at 7 a.m. to receive meals from food pantries on base as well as off base. To beat the stigma of getting help, a program was introduced in schools where children receive a backpack of food to help them get through the weekend when free breakfast and free lunch are not available. Sadly, nearly a quarter of the children in on-base schools receive free meals. This means thousands of children potentially do not have access to food at home, particularly over the weekend when free meals are not available.

While receiving SNAP benefits might sound like the answer to this problem, it isn’t a lot of money.

States vary on the amount of money that is allocated per person based on certain criteria. In 2015, California’s program paid on average $1.58 per person per meal a day. Last year Alabama paid on average $1.40 per meal per day.

Imagine how much you spend on your meals. Would this amount cover it?

In 2013 a Census Bureau study showed that about 2% of active duty families used SNAP. That is roughly 23,000 military families.

Six percent of those that responded to the Blue Star Families Military Family Lifestyle Survey said they had to use emergency food relief last year. Military families are struggling to feed their families.

The Department of Defense tried a program in 2001 known as the Family Subsistence Supplemental Allowance (FSSA) to help military families. This program was meant to provide up to a $1,100 a month supplement to put service members over the requirement for SNAP. The program was terminated in September 2016 because not enough families qualified for it.

If the Military Hunger Prevention Act passes, will being able to qualify for SNAP be the answer to thousands of military families’ hunger problem or is there a better solution for those facing food insecurity?

What do you think of this proposal to exclude BAH from food stamp eligibility?

What the Military Community Wants from Washington

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Dear Washington,

Election season has passed, and a new administration is getting ready to take office. That means it’s time for you to take stock of our military capabilities, troops and their families. Yes, the U.S. military is a huge organization and encompasses so much.

However, please take a minute to listen to us, to me, to find out what we want and need from you, right now and for the next 4 or so years.

First, take a hard look at the budget.

Actually look at it with a critical, non-partisan eye. Is there a place where we could trim a little bit of fat without reducing force readiness and family support?

We know that this department has become a huge and growing part of the annual budget. And we also know that something probably needs to change. Please try to do this judiciously, cutting or reducing funding for the (many) redundant portions of the budget while preserving those parts that serve a major purpose in our lives.

We don’t want military funding at the expense of other services we depend on, like education and other programs that serve the general population.

We use these, too. We want them funded and functional.

Next, we need more than lip service about your support.

It’s all well and good to “support the troops” in your speeches and press conferences, but will you actually follow through? A great first step is making sure that our equipment is funded for proper maintenance. With this, include money for adequate training on the equipment. If you want troops ready at a moment’s notice, then they need to be able to access perfectly running equipment AND know how to use it.

Cutting corners here can lead to deadly accidents.

Our fighting force is now a family. That means spouses and kids who depend on the military for both financial and lifestyle stability. If you cut programs that help support military families, you will quickly draw our ire and disdain. This includes medical care, employment programs, child care facilities, commissaries and family readiness programs.

If you want the troops to be ready to go, the whole family needs to be prepared and supported. When those on the homefront feel unstable, that deployed service member can’t do his or her job well.

Don’t forget the veterans, either.

For years now, we have watched the endless saga of corruption and mismanagement at the Department of Veterans Affairs. Hospitals and VA health care facilities have endless waits, leaving many in the lurch. These waits have added extra stress to those suffering from mental and physical health conditions.

Take this department to task and shape it up. Get rid of practices or personnel that are costing lives every day and streamline the process to receive care.

Veterans wrote a blank check to our nation and were willing to sacrifice their very lives to protect ours. The very least we owe them is top-notch medical and mental health care when they leave service.

Help us connect with the other 99%.

About 1% of our country serves in the military. That leaves most Americans without a connection to our troops and their families.

In years past, the entire country banded together to support our troops through war bonds, rations and taxes. Right now, it seems that most Americans just don’t understand what it means to serve our country. Help us to show everyone else what it means to live this life.

Highlight our sacrifices, beyond just the feel-good stories about homecomings and the devastating stories of loss. Help people understand that we have been at war for over 15 years. This war isn’t funding itself.

Pay us what we are worth.

Have you checked on the salaries for our service members from top to bottom lately? Without the “luxuries” of the commissary and military health care, many families wouldn’t be making it financially. Even with these benefits, there are too many military families who qualify for WIC, welfare programs and food stamps. That’s unacceptable.

In addition, due to operational tempo and frequent moves, many military families are trying to make it on just one salary.

Pay our troops what they are worth, based on the work that they do for our country. And pay them without factoring in the “benefits” we all count on just to make it from payday to payday.

These are just a few thoughts, Washington. If you need more ideas, just ask.

MilitaryShoppers readers, what do you want from Washington?

GAO Report Says DoD Lacks Data to Make Cuts to Commissaries

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Remember that Department of Defense report that said budget neutrality isn’t a vital option for commissaries?

Well that report isn’t the end of this discussion.

More likely that report is just the beginning of an ongoing discussion about the feasibility of self-sufficient commissaries.

The Government Accountability Office (GAO) recently released a report titled “Plan and Additional Information Needed on Cost Savings and Metrics for DoD Efforts to Achieve Budget Neutrality.” In this report GAO evaluated the DoD’s report and found that it lacked specific data to support its stance that budget neutrality isn’t feasible for commissaries.

“GAO’s analysis found that DoD’s report fully addresses three of the seven mandated elements and partially addresses the remaining four. Although DOD’s report discusses the seven mandated elements, GAO found that including additional information would have made the report more consistent with relevant generally accepted research standards and would have made the report more useful to decision makers,” the GAO report stated.

More useful to decision makers? Wait…what?

Let’s take a step back into the recent history of reports on cost-saving measures for the commissaries.

As commissary shoppers, we know that that DeCA operates the commissaries. Prices at the commissaries are product cost plus a 5 percent surcharge. In fiscal year 2015, DeCA’s annual sales for its commissaries were approximately $5.5 billion. DeCA received $1.3 billion in appropriated funds in fiscal year 2015 to operate the commissaries.

Those appropriated funds are currently under the microscope of the defense department.

The National Defense Authorization Act for Fiscal Year 2016 “mandated DoD to provide a comprehensive plan to achieve ‘budget neutrality,’ which DoD interpreted as ending the use of appropriated funding for commissaries and the military exchange system, by October 1, 2018,” as explained in the recent GAO report.

This mandate has caused a lot of head scratching and number crunching for those at both DoD and DeCA.

The Boston Consulting Group was contracted to conduct 2 separate studies that may lead to cost-saving measures. In February, DoD established the Defense Resale Business Optimization Board. This board is working to help implement reforms within and among the commissary and exchange systems.

Then DoD released its report saying budget neutrality will be difficult, if not, impossible. GAO then reviewed that DoD report as it was directed to in last year’s defense budget. That’s what lead to this report and GAO’s recommendation that “DoD provide information to Congress to support its conclusion about budget neutrality; develop a plan for achieving alternative reductions to appropriations; and identify specific metrics for customer satisfaction, product quality, and savings.”

“DoD did not provide a plan to achieve budget neutrality by October 2018 as mandated because according to the report, DoD cannot achieve budget neutrality without reducing savings to patrons or other benefits provided by commissaries and exchanges.”

“For example, the report stated that drastic changes, such as store closures and price increases, would have to be implemented if DOD were required to achieve budget neutrality. However, DOD did not provide additional information about potential steps to reach budget neutrality, such as cost estimates and assumptions, or include specific details about trade-offs, constraints and limitations to achieving budget neutrality such as reductions in benefits,” the GAO report said.

“Instead of providing a plan, DOD estimated a $2 billion reduction over a 5-year period, which would fall short of achieving budget neutrality by about $5 billion. DOD officials told us the cost savings amount was an arbitrary estimate, and that therefore DOD did not develop details on steps it would take to achieve the $2 billion in savings. DOD officials could not explain the assumptions, methodology, data, specific time frames or DOD efforts that would lead to the $2 billion in savings.”

In case you’re wondering why DoD didn’t conduct these types of detailed analysis in its initial report, DoD experts, who were interviewed by GAO investigators for this report, pointed to time constraints as their reason for the lack of specifics.

“According to DoD officials, for some efforts that are already being considered, DoD officials told us that they did not include some information in the report to support their conclusions because they have not had time to verify the information,” the GAO report said.

Here’s another important nugget of information: DoD concurs with GAO’s recommendations.

Now that we know that the decision makers aka Congress lack the information needed to make decisions about changes to the commissaries, what’s the next step?

I have a strong sense we’ll be reading another federal report in the near future.

What do you think of this GAO’s report saying that the DoD’s report on cost-saving measures for the commissaries was incomplete?

Privatization Proposal Leaves Many Questions Unanswered

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In the ongoing battle to retain commissary benefits, privatization is one option being considered. The hope is that privatization will eliminate the $1.5 billion DeCA budgetary shortfall.

Several large retail companies were asked to provide insight on what such a program might look like. Though the names of those solicited was not revealed, it’s hard to imagine that retailers like Walmart and Target weren’t in the mix.

But is privatization of the commissaries really the answer? Let’s break down this proposal.

Would Prices Go Up?

Many might be surprised to learn that most grocers operate at a profit margin significantly less than the 5% surcharge currently charged by commissaries. And that profit margin includes the cost of facility maintenance, labor, and taxes, plus shipping and distribution. Combined with the national distribution capabilities, massive buying power, and private label options of companies like Walmart, it’s unlikely that the overall cost of most items at a privately managed commissary would go up. We might pay more for some items, but less for others.

However, commissary pricing is almost always less expensive for high-ticket items like dairy and meat.

Would a major retailer be willing to reduce an already skinny profit margin to ensure prices on these items stayed the same?

What about taxes? There is currently no tax at the commissary. Would the same be true for a privately managed facility?

And let’s not forget about our OCONUS commissaries. Is a large retailer in a position to manage these overseas locations?

Are there any restrictions on a private company conducting business in foreign country? Would those restrictions potentially add to the cost of items sold there?

And would a private company be willing to eat losses to ensure service members and their families still have access to the products they need at the prices they can afford? Or would those costs, in turn, cause an increase in pricing at OCONUS locations?

Would Jobs Be Lost?

Approximately 60% of DeCA’s 18,00 employees are veterans, dependents and spouses. Any potential for the loss of jobs is reason enough to give careful consideration to any kind of management transition.

That being said, retailers like Walmart have employment programs for military spouses and veterans.

Is it realistic to assume that some employees would be allowed to keep their jobs? Probably, but the big question is would they be kept at the same rate of pay and offered the same benefits?

And how many current DeCA positions would be eliminated due to duplication within a current private provider’s business structure? Positions like purchasing, logistics, accounting, human resources and others could be in jeopardy.

Will Privatization Create Competition with AAFES?

In a recent report presented to Congress, the success of the AAFES Exchange program relies heavily on a close relationship with commissaries.

But with private retailers, even those typically seen as grocery-only, offering up everything from holiday décor to furniture, would privatization create a conflict of interest? Would those retailers be willing to eliminate those items? If not, would the loss in potential sales at exchanges throw a currently self-supported business model into ruin?

Is Privatization a Viable Option?

With so many questions left unanswered and the unlikely willingness of a major retailer to accept the rules that restrict profit for commissaries, privatization hardly seems like the answer to DoD’s budgetary woes.

But in truth, any push to eliminate or change the program feels likes overkill. While the $1.5 billion budget deficit looks like a large sum, it is less than 1% of the total defense budget.

According to a recent nonpartisan report, every single taxpayer dollar spent equates to nearly double the return in value of benefit given to service members and their families.

Is there any other benefit program that can boast such a claim? And what about a plan B? Should implemented privatization fail to support a pricing structure that provides the same level of value, will additional taxpayer dollars then be called upon to increase service member pay to bridge the gap?

Ultimately, it comes down to this: Are the risks of privatizing the commissary worth the potential loss of such a widely used program? Is it worth the loss or erosion of yet another benefit promised to a community who already sacrifices so much in service to their country?

What do you think it means that a “significant number of companies” have expressed interest in operating the commissaries?

Commissary Privatization Is Not the Answer

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We recently published an article, “Commissary Closures: It’s All or Nothing,” and received quite a bit of feedback on it, especially about commissary privatization. Emotions run high when the topic turns to the potential of commissary privatization or even worse, closure.

Don’t panic; your commissary benefits are currently safe.

Commissary Privatization Is Not the Answer

Commissary privatization isn’t the answer. Photo courtesy U.S. Air Force.

The government is however trying to do away with the cost associated with the operation of the commissary. After our article was published, a lot of MilitaryShoppers readers voiced their opinions. Here is what they said:

Char Johnson said

Privatization is NOT the answer! How many benefits do you think taking away from our military (active or retired) will be acceptable! What happened to honor and trust, something our members of Congress don’t seem to recognize? I am a military wife of a retiree. I/we travel to the commissary and exchange at least three times per month, and we utilize our privileges to the max. Don’t take away something that has been earned and promised. Start taking away from those who vote against what we have and what our soldiers have earned.

Mrs. Johnson makes an excellent point, where will the cutting of benefits end? Service members are promised benefits when they join the military. That is a recruiting tool. If men and women are willing to put their lives on the line, getting a few benefits for themselves and their families make a big difference.

Many have already seen significant cuts to what they were promised.

Tricare has had several changes over the years, many of which are not ideal. Retirement benefits have shrunk in size and increased in cost. Education benefits have improved, and the exchange and commissaries have remained a constant. Service men and women, along with their families, have earned these benefits and were promised them.

Now the government wants to save money by taking away some of the $1.3 billion annual Department of Defense subsidy the commissary receives. Millions of dollars have been spent researching how to keep the commissary running without government funds. Many options have been considered including commissary brand products, commissary privatization and variable pricing. So far, none of these are the answer. In the meantime, military families keep shopping at the commissary.

The majority of service members and their families shop at the commissary. It might be just once a year for some but for many, it’s multiple times a month. The slogan “it’s worth the drive” is true. I no longer live near a big commissary, even though we are active duty. The tiny 6-isle commissary 35 minutes away is worth the drive just for the savings on meat alone.

Daryel Covington also makes the drive. He said

I travel about 150 miles round trip sometimes twice a month! BTW, I’m a 70-year-old retiree and need the saving! And no I will not support a price increase nor could I support privatization.

Mr. Covington travels to the commissary to save money and realizes that if the prices go up, the commute won’t be worth it. For some, saving money isn’t the main reason they shop at the commissary though.

William C Simmons said

I am a retired airman who served 26 years. My wife and I are today over 80 years old and shop the commissary once every week. Our children have long left home and we live alone. The commissary is a great convenience to us. Of course we could shop local grocery stores; it would not be the Military Family we loved for so many years.

I share the same sentiment with Mr. Simmons. I love saving money of course, but I mostly like to shop at the commissary because of the military community or family feeling.

I grew up doing our weekly grocery shopping with my mom at the commissary and now I do it with my son. While the Simmons don’t have any children of their own left at home, they feel like they can still shop at the commissary and have that military family feeling.

If commissary privatization is realized, that sense of family may get pushed out of the way for corporate profits.

That’s what all of this comes down to, money. The government wants to save money and we just want to save our benefit. They have spent millions of dollars researching how to save money. Commissary privatization isn’t the answer.

Charles leaves us with this thought. He said

The amount the commissary gets subsidized is a small price given to our active duty troops/retirees and their families for the many contributions and sacrifices they gave to our country. So much more funds could be saved by eliminating the enormous careless [government] spending.

If we agree that commissary privatization is not the answer, what is the answer when Congress needs to cut the funding for commissaries? Share your thoughts in the comments section.