The commissary. It’s one of those bread-and-butter military perks that comes with having your military ID. The commissary is where military families, old and young, get their milk, meat and cereal. It’s used by active duty families and retirees alike. Shopping and saving money at the commissary is one of the benefits available to our military community.
The commissary also seems to be one of the first benefits discussed every year when Congress, the Department of Defense and lobbyists are debating ways to trim the defense budget. This year isn’t any different.
Tucked in the Military Compensation and Retirement Modernization Commission’s 15 recommendations to modernize the military is a proposal to combine the commissary and exchange systems into a single defense resale organization. The commission’s final report was released in late January. You can read the entire report here.
Currently, the Defense Commissary Agency (DeCA) operates commissaries that provide groceries to authorized patrons (you and me and anyone else with a valid military ID) at cost with a 5-percent surcharge, which covers the costs of building new commissaries and modernizing existing ones. DeCA promotes that commissary shoppers “save an average of more than 30 percent on their purchases compared to commercial prices – savings that amount to thousands of dollars annually when shopping regularly at a commissary.”
On the flip side of military retail coin is the DoD operated exchange system that includes the Army Air Force Exchange System (AAFES), the Navy Exchange (NEX), and the Marine Corps Exchange (MCX). Exchanges have everything from beer to military uniforms and sell their merchandise at a profit. The benefit of the exchange is no sales tax.
Keep in mind that the “gross profits (from the exchanges) are used to support the exchange system, covering operating and other expenses; recapitalize facilities and systems; or are provided as dividends to fund MWR programs.”
When you’re stationed overseas, both the commissary and exchange are vital to your quality of life. Both retail organizations hire military dependents and veterans.
Together, commissaries and exchanges provide goods and services with total annual sales of more than $17 billion in 2013.
Based on an in-depth study that included town hall meetings and quality of life surveys, the bipartisan Military Compensation and Retirement Modernization Commission unanimously recommended a consolidated resale organization.
A consolidated resale organization, with combined resources, increased operational flexibility, and better alignment of incentives and policies, would improve the viability and stability of these systems. It would sustain the benefit while reducing the combined reliance on appropriated funding over time. The increased flexibility and opportunities available to a consolidated organization could enable a deeper level of cooperation to improve quality and drive the efficiencies recommended by numerous studies. The many similarities, overlaps, and redundancies in processes, staffing, and support infrastructures favor the consolidation process. Establishing an executive structure and means of oversight that ensures alignment with the needs and goals of Service members and the Military Services is critical.”
The proposal also said that a portion of profits would continue to support MWR programs and the commissaries would keep their current 5-percent surcharge. The surcharge was set at 5 percent in 1983.
This consolidated system would “allow the sale of convenience items in commissaries at a profit, including products and services typically found in commercial grocers.” Food and other “essential items” would still be sold at cost.
The report also said “This expanded commissary product line would include beer and wine, but those sales must align with DoD’s efforts to deglamorize alcohol and reduce its abuse.”
Basically in a nutshell, this proposal is intended to reduce the overhead costs of operating the commissaries and exchanges separately. It’s not expected to affect the costs of shopping at either store and if approved, this consolidated system may make shopping on-base more like shopping at Walmart.