By now, if you have any connection to the military community you’ve likely heard some heated discussion and some of the rampant rumors about the possible closure of all CONUS commissaries.
An outside view the commissary located at Naval Station Norfolk. Source: U.S. Navy
In the Report on Plan to Obtain Budget Neutrality for the Defense Commissary System and the Military Exchange System dated May 2016, the Department of Defense reported to Congress details on the current sales and usage of the commissary system and explored options for reducing the $1.5 billion shortfall between projected costs and the revenue required to achieve budget neutrality by October 1, 2018. The report reiterated the DoD’s commitment to keeping both commissary and exchange services.
But perhaps the most surprising boost in the fight to keep our commissaries open came from the report’s recommendation that neither commissary closures nor the implementation of significant price increases be seen as viable budgetary solutions.
How often do you shop at your commissary? Would you shop there less if the prices were increased by 5 percent?
It’s All About Buying Power
As any savvy shopper knows, buying in bulk is a great way to save money. Buying in bulk is a great budgeting tool for individual consumers, but it also is the ace in the hole for large retailers like the commissary. Just like commercial grocers, DeCA leverage large-volume buying power in price negotiations with manufacturers and brokers.
Closing commissaries reduces DeCA’s buying power and reduces its ability to negotiate for the best possible pricing. Close too many commissaries and the significant decrease in volume could even eliminate DeCA’s ability to negotiate directly with manufacturers, forcing them into buying relationships with wholesalers and introducing a “middle man” into price negotiations.
In order for DeCA to offer our community the products and pricing we need and expect, significant decreases in volume must be avoided.
What About a Simple Price Increase?
Another alternative explored included the feasibility and impact of raising prices unilaterally above the cost-plus-five-percent level currently in place.
The report cited research in the Military Resale Study performed by the Boston Consulting Group in July 2015 which noted that polled commissary patrons indicated that “if prices increased even five percent, they would shop 25 percent fewer times per month.”
And while the finite impact of raising prices is difficult to quantify, if commissary sales decreased by 25 percent, the resulting loss of revenue would total nearly $2.1 billion. Additional price increases would then be needed, resulting in additional losses in sales, creating a vicious cycle of higher prices and decreasing sales until the commissary system became entirely defunct.
What if We Closed Them All?
Not only would closing all CONUS commissaries greatly impact moral, but it would create an even greater burden on already difficult budget constraints. The DoD report indicated that nearly 80 percent of all active duty families use the commissary at least once annually, with the greatest percentage of patrons utilizing services “two to three times per month.”
According to DeCA calculations, at this level of patronage, active duty families average just over $1,500 per year in savings. If the DoD were to compensate military families for this loss of benefit, the cost would be nearly $2.4 billion, a significant increase over the current projected budget shortfall. This analysis also fails to take patronage and sales to retirees and their families.
Commissary closures would also have several second and third order effects. AAFES exchange stores rely heavily on the proximity to commissaries to support their revenue.
AAFES estimates that between “20-30 percent of its foot traffic” and the resulting $1 billion in sales comes from exchange locations in close proximity to commissaries. Subsequently, the significant contributions to MWR funding made by AAFES would be greatly impacted.
And let’s not forget about our commissaries located OCONUS. These facilities derive great benefit from their connection to the stateside system.
Decreased buying power would greatly impact cost and availability of products that can make an overseas assignment feel a bit more like home.
According to report calculations, if all CONUS commissaries were closed, the resulting loss of buying power and management support would result in nearly a 25 percent increase in costs for OCONUS commissary operations.
We are by no means out of the woods when it comes to the future of our commissary benefits. The DoD is still examining options that include privatization or varied pricing to help DeCA achieve budget neutrality by the target date.
However, this report seems to solidify the DoD’s intent to ensure commissary benefits for active duty families and retirees remain in place and intact for as long as possible.
The use of the commissary is also a retirement benefit. I drive 3 hours (round trip) once a month to shop and support the closest commissary. Even considering the gas and drive time I feel I still save a little. If the prices were to be raised cost plus 10% i would have to reconsider the trip.
Privatization is NOT the answer! How many benefits do you think taking away from our military (active or retired) will be acceptable! The other comments have pinged in about many aspects, all valid! What happened to honor and trust, something our members of Congress don’t seem to recognize. They manage to get their own benefits raised and kept, from their salaries to their health benefits, and to hell with those who have sacrificed and served their country.. I am a military wife of a retiree and also many family members who served for 20 or 30+ years in the Air Force, the Navy, the Army, and the Marines. 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. Actually, the spouses and children have sacrificed right along with their soldier!
You are right–I travel about 150 miles round trip some times 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.
The closing of the commissaries would not only directly effect the benefits to the military families..it would also directly effect the jobs that the commissaries provide. The loss of the benefit would greatly effect thousands of families. The taxpayer $$ needed to provide the commissary service is minimal in the DOD budget. However, the benefit for the $$ spent is great!
Keep the Commissaries Open and Funded!
This absolutely cant happen! The domino effect it would have on families that are big without big pay or even small with small pay would be disastrous. Yes big box companies such as Bj’s, Costco and Sam’s offer competitive prices for some things, but that’s just it, some things. The Commissary is the saving grace for many families it offers the stability for families to provide quality food on the table when your life style can be considered by some as unstable.
I agree
I agree too!!!!
I agrewe it would put a burden on the Military that use and depend on it. It would break my heart and would not know where the heck I would get groceries especially meat.
Private companies would not run it as a non-profit. They’d demand a certain level of return on investment (profit) thereby causing price increases which would start the death spiral for Commissaries.
Privatization is not the answer
As a retired Army 1sgtI can assure you closing the commissary will have a large impact on reenlistment and a large impact on moral, this will affect the older married solder more than the solder that lives in the barracks.
While on active duty for 28 years my family shopped in the commissary several time a month. Now that we are retired we shop at the commissary once a month even though we must drive 130 miles to Ft Benning Georgia. We do this because of the cost saving we retired folk need.
Should the commissary close, it will affect not only active duty but the retired service member.
We were told that a commissary would be built at Dobbins Air Res Base in Marietta Georgia and was approved by DeCA and approved by the Pentagon. Should this happen it will benefit thousands of military personal, both active and retired in Georgia, Alabama, and Tennessee. We need the commissary
Privatization would not work smoothly. Currently, the commissary maintains a wide variety of products, some of which are rarely available in civilian stores. A privately operated commissary would gradually wean out products that were seldom bought. Many shoppers, I believe, visit the commissary for these hard to find items and without them, customers would tend to shop at stores closer to their homes. This is especially true for retirees. In addition, I cannot imagine a private firm operating the commissaries and still maintain the current low prices without subsidization from the government. If subsidies were necessary, then it is likely that the cost of operating the commissaries would increase significantly
Entitlements vs benefits. The Commsarry is a benefit and for those who have been in the military for longer then a day , have become dependent on this benefit..
They Might even say its benefits like these that make it worth serving in the military at all. If you break the hours, and deployments, and strain the military family endor with the many PCS ‘s in their career time. They make little to nothing in pay, it’s benifits that help the families survive the local economy’s . When a local McDonalds worker can make more in salery and benifits than an American serviceman or women we have issues.
I’m Saying all this because the families have become dependent on these benifits to make ends meet and we need to find ways to keep them going.
The Commsarry is a major part of the military community. I think maybe they need to rethink even entertaining closing any of the Commsarries . We need to find ways of keeping them.
No, privatization of military benefits has been a disaster in my opinion. Take our health insurance, for example. When I was a child, my parents didn’t have any trouble getting doctor appointments for me and my siblings and the insurance process was very simplified. Now, Tricare has to select a company to facilitate our health care, done like everything else by a bidding process. Our current carrier in the Northeast, HealthNet, is a perfect example of the failings of that system. We have to stand up and stop allowing Congress to chip away at the benefits that have traditionally been available to the military community. They took away all domestic Tricare offices in 2014 so everything has to be handled online or on the phone with contracted representatives who often are poorly trained and now the HealthNet employees know they are losing the contract so they really don’t give a shit about us and that is reflected in the mistakes that they make with our benefits every single day.
I think that the commissaries and AAFES are an important benefit to the military community. Their loss would have a huge impact on the budgets of active duty personnel and retirees. They both are the reason that families can survive on the low wages of the military and they are a reason people are able to make the military a career.
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.
Keep the Commissaries Operating for us.
Commissary food is taxed while California stores have no sales tax on food. If food has the same price per pound at the Commissary and a Super Market, The commissary price to the customer is higher by the 5% tax. Thus Commissary prices need to be 5% less than a Super Market for the the service member to break even when shopping at a Commissary.
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 spending due to government and contracting fraud.
Prior to retiring, I utilized both commissary and exchange privileges at least twice a month for the major portion of our budget for food and other items available.
Looking forward from retirement, I find my wife still utilize both commissary and exchange, just not as often. I still stock up on non perishables and take advantage of good offers.
I shudder to think of losing our commissary/exchange or both. I have been shopping thereat since I first was issued an Dependent ID Card at the age of 12. That is a long time.
Over the years, on occasion, surcharges were increased to cover part of the cost of operations for the commissaries. The surcharges cut into many a budget for overall shopping. I, for one, got used to the increases (not necessarily without cursing under my breath) so now they are just there.
Don’t take away our shopping systems. As a retired Marine, I budget for the monthly expenses. I would certainly be at a loss if exchanges and commissaries were shuttered.
As I mentioned, I am retired. What about that junior enlisted person and his/her family? Throwing that population to the civilian market would certainly create more hardships when hardship is a daily event for many enlisted personnel..
Semper Fi!
I think we would have starved or picked through trash at the E Club when we got to our first duty station, 29 Palms, 92-95. We were That couple who HAD to go on payday , no doubt about it. We were so broke that after we paid rent and half insurance on 1st. and the car, ins and utilities,, filled the gas tank,later, we had $20 after groceries. We were too poor to go to the laundromat!! My neighbor let me and another wife use her washer and clothes lines. No cable, a phone we used for emergencies or if someone called us. We didn’t even have children yet!! My friends laugh when I talk about our first major fight. We got one sweet per month and that month we chose poptarts. That Marine’s veins started popping all over, “You Ate My Poptart?!!? That’s how the commissary system helped us. I worked for them at our next duty but behind the scenes. Then children, baby foods formulas, lunchbox foods etc etc. Our commissary has been so huge that we retired next to a major base,
commissaries are part of military compensation. It is a benefit well deserved – for both active and retired. VA is now saying “Thank you for your service” and you are doing the opposite.
I simply believe that the commissary is a necessary benefit provided by taxpayer money that is a part of what makes up for lower salaries of military personnel as compared with private citizen’s salaries. If privatization can be accomplished to keep the prices even with the current commissary prices then I don’t see a problem in going that way. However, I doubt that can be done.
I do not think that the privatization of all commissaries will reduce operating costs. What it will do is lower morale significantly. This then will put all commissaries out of business. NOT GOOD!
A lot of commissary patrons drive 20 miles or more to save a few bucks. If there’s no savings why not just use the markets a few blocks away where we can save time at least. The study is correct that commissaries also helps the Navy Exchange to get more foot traffic. Some places like NAS Lemoore is at least 7 miles away from the closest market and that would hurt the housing population.
One thing I would like to know is who gets the extra money from the goods that is the same or even cost more out in town? And this is true in both commissaries and exchange? I know that some of the electronics are controlled pricing by the manufacturer. Do the manufacturers make more money on these products?
I do not believe that either option is viable as the wife of a medically retired vet and a women with cancer we need the commissary for many things but also because without this benefit I would need to apply for food stamps and medical assistance just to offset the cost of food for our family. As long as there are men and women who fight for this country there should be a commissary to help them support the family that goes along with said soldier. We in this country ask alot of our military families and they depend on the support of the country . How can we not do whatever we can for those who stand for us all in every possible place where this country sends our soldiers. It saddens and disappoints me to think that either option has even been considered .
Here in Puerto Rico commissary services are working excellent and no only that the Customer Services and their employee are doing an profesional and great job. The quality of products are fine as well the prices.
I hope that the people that are going to make this decision about close to make a deep study before taking any final decision.
I think the operations, should be looked at, and addressed, i.e. spoiled produce, employees standing around leaning on carts in the aisles complaining about supervisors and coworkers, talking about customers, complaining that the customers won’t move faster, playing catch with the loaves of breads, etc. (this includes the managers). I am sure that wages alone wasted, alone, on these individuals, would make a huge dent in the deficit.
You obviously shop in a one in a million commissary because so far in my whole 20 yrs. Navy career and over the many years that I have been retired my wife and I have never seen any of what you described in the many commissaries we’ve shopped in. May I suggest that if one commissary doesn’t work for you go to another one.
In any case it is imperative that all Commissaries be left alone for the go of the military.
I could care less.
How much less?
I could care less means that you can, in fact, care less
I couldn’t care less
I don’t give a crap either way and just wanted to be cantankerous
Nice talking to you!
You couldn’t care less?
I do not, they will start out low and increase prices
Privatization has always been the catch-all solution for the commissary and exchange. Privatization will only add to the cost of goods and services as witnessed by the privatization of housing and other facilities on installations. Once you make the move to privatization and it fails, the likelihood of returning to subsidized commissaries is like doing away with social security…not going to happen. I would agree that cost have gone up for employees and facilities and that some revenue has to be raised but please don’t close the commissaries because of the benefit realized by service members. I believe raising the surcharge to 7% is something that most patrons of the commissary could support.
Privatization would be a disaster as it has proven to be to the customer. It would maybe cost the government less but would screw the participants that has always been the case. If you close (I suggest you do) all conus commissaries just provide and increase in pay/allowances to the active and retired community to offset the loss in commissary benefits / yearly savings of approximately 85% to 100% . The Gov’t would still come out ahead by savings in utilities, paying employees, retirement benefits to employees, office staff, personnel management offices, etc., etc. Could even lease the buildings to local grocery stores or chains to run as self supporting stores with no gov’t $$$ support yet they would pay in lease the use of utilities and bldg. up keep. THERE !!
I live 75 miles from the nearest commissary. In order to make that trip worthwhile, I must save as much money as possible to pay for auto wear and tear, gas, oil, etc. Increasing the 5% amount only 5% more would make the trip impractical since it wouldn’t pay for us to drive that long distance. If they privatized the commissaries, it would be ridiculous for us to not shop the Publix in town and forgo that long trip.
Obtain more government subsidies and/or privitize. DECA buying expertize could be a lot better. Many prices at commissary are higher than on the outside. Add the 5% and often they are over the top. Private skilled buyers could do much better. It’s all in the ability to buy low. Private ususally works best. Govt buyers pay too high.
To increase prices or close this benefit is a shame on our society to do that to our brave Americans who risk their lives to protect our freedoms. No one is conscripted into military service anymore, those that join make a personal decision whether it is a patriotic call or not it is based on potentially risking their life for the small benefits that military service gives. To reduce any of these benefits tarnishes the image of America and us as a people. Whether it is going back on a promise of retirement benefits or pay, we are choosing to disrespect the patriotism and sacrifice of our sons and daughters.
Meanwhile, politicians increase their own benefits, free college tuition for their children, free health care and retirement plans. Yet they refuse to reduce those, instead yearly they try to increase them. President Obama recently asked for an 18% increase for ex-presidents. Outrageous since most make millions in speeches and books.
Maybe DECA should look at the COSTO model. Maybe privatization with tax cuts combination is the answer. The Post Office has been operating at a loss for years, no one demands they all close up shop….at least seriously. The government needs to show support to our proud Americans and refuse to eliminate any of these military benefits. Need to save money? Limit the president to only one vacation on Airforce One, tell congressmen they are getting a pay cut and no free health care. Tell them no longer will the taxpayer foot the bill for their kids college tuition.
Our brave men and women risk everything to protect us, maybe we should do everything to protect them and their benefits.
A friggen men!!
I, for one find most of the stats in this article false. It is our understanding at DAFB most that were surveyed were active duty, single and living on base. We have made it a priority to ask at facility’s on the base.
This is political and nothing more, that is obvious. Just another benefit down the drain.
If it means we must increase tax to do so OUR MILITARY IS WORTH IT.
WE .NEED TO KEEP OUR COMMISSARY’S….
I think the men and women who have served this country, past present, future, depending on shopping at the Commissary. It’s bad enough we have to fight wars, loose our loved ones friends.
Come home and have to fight to get benefits that you fought for it the first place. And hope they give you service contented so your benefitsite.
Why don’t Congress or DOD take a pay cut and let the money go our armed forces members and the bases and Commissary. I know my husband and I go there at least 3 times a month.. It’seems like the government wants to take away everything they can. Which really sucks.
It is law that the commissaries employ civil servants. This was not always the case. It is interesting that in the “exploration of options” effort did not include any analysis of the impact of that law on costs. I’m sure there are records available such that a thorough evaluation of “with and without” that imposed requirement could be performed. It seem a tad bit disingenuous to me that this aspect was ignored – given the fact that the requirement has a great deal to do with the “why” of the need for subsidization. Just saying..
I so agree with Suzie Baylis, except, she forgot the retired vets who gave so much and even the widows of our fallen soldiers who shop at the Commissary and the person who wrote, they could care less, I have one thing to say to you, this world doesn’t rotate around you and you aren’t the only one. I can’t believe, just can’t believe how our Military is being treated and when we go to the base, there are always so many people in the Commissary with their carts full and some have two filled. Yes, some people only go once a month, but not many, but how often do the retired get paid??? We live on a fixed income and we go at least twice a month to get what is on sale and to get fresh produce and so many other things. But, if you read the above statement, she is so on point. Our Military are being taken for a ride and not a good ride. How many years has it been since the retired have gotten an increase in their retirement???? We moved within so many miles to be able to go to the base for the few left benefits we have left. Obama gave not only the ex-presidents a 18% raise, but the current President, he sure covered the bases fore himself, didn’t he? So, please see our side of this and a lot of single who live in barracks on base were ask and some told us, they don’t even go to the commissary except for snacks as they eat in what we called the mess hall or cafeteria. The ones who use it are the ones with families, living on base or close to base and please do not forget the retired Military.
Oh, NO, please do not privatize the commissaries!!!! Our commissary privatized our deli and the prices doubled. My husband is retired army and we are fortunate enough to live close to a post. We shop there every week.
The rules for shopping at the commissaries should return to those in operation before President George W. Bush broadened them. The ex-AF reservist president broadened them too much for reservists and ANGs. Certainly those families of reservists and ANGs on active duty deployed to battle areas should have access, but those at home attending meetings and training should be covered as they were before President Bush changed the rules. Since he changed them we now see individuals shopping for not only themselves but their extended family. An some shoppers seem questionable,at best. There is little accountability regarding their presence and shopping rights. And this has turned off many of retiree customers.
Would the DOD subsidies the cost difference to all military or would this be another benefit we would loose?
You can best believe there will be no subsidzing if lieing hillery gets near the White House.?
How would the DOD help the military with the lost benefit? That will cost us a lot of ADDITIONAL MONEY.
Maybe they should look into opening the commissary and exchanges to all vet’s and not just active duty and retirees.
The Commissaries and Exchanges already lost some customers when the “area based pricing” bill came into effect. This was a few years ago when local retailers (many on the Norfolk Area) complained that the bases were priced so low, nobody shopped out in town. This is the reason why prices went up a few years ago across the board, and careful shoppers will notice some things are actually cheaper out in town.
Another price increase, even 5%, will almost eliminate the benefit of shopping on base, especially for those on lower or fixed incomes.
Privatizing the system will be a complete disaster. There is NO retail company that will operate “non-profit”. Once they take over, prices will spike, especially in OCONUS or remote areas where things have to be flown/shipped/trucked in (Japan, Key West, etc.).
The bottom line: if it ain’t broke, don’t fix it. Politicians want to start cutting costs, start by only paying them for working. When they can’t decide on a bill, they are off our dime an on their own time until they start doing their jobs.
What happened to the talk one time about letting disabled veterans shop at the commissary and exchanges? That would greatly increase the number of shoppers.
Here’s one that was submitted that never went anyplace:
https://www.congress.gov/bill/114th-congress/house-bill/1292/text
The government finds money to support everything else. We have multi-million dollar buildings on this post that are not used any longer because they moved units out (like the WTU). Why look at this benefit specifically when there is so much waste EVERYWHERE? Why do they look at the military to cut, cut, cut and not congress’ salaries and supporting illegals that shouldn’t be here anyway? Why is it always the military that must be cut?
Oh, I know!!!! Military folks cannot lobby.
The devil is in the details of the report, unfortunately I did not see a link to view the actual report, but they appear to throw out there a 1.5 BILLION DOLLAR ANNUAL LOSS. Seems as if the DOD needs to hire someone experienced in private sector retail world to orchestrate a new business plan, I would bet there is a lot of money wasted due to inefficiencies including possible high management, administrative cost that could be trimmed among other options.
I find that I have to shop very carefully at the commissary as prices have risen noticeably. Many items are less expensive at regular stores ie milk, bread, produce etc… Nice savings on taxable items.. With present pricing I find it hard to believe that the commissary is not self supporting. Also I live 2o miles from two commissaries so I have to consider the cost of gas to get to and from. In the past there was considerable savings just on bread and mild alone, Not so much anymore.. Stores such as Costco, Food 4 Less , and Smart and Final offer good savings and often less expensive than the local commissaries. in the San Diego area.. If the commissary is loosing money then maybe it’s time to look at the management plan..
The VA hospital and system is just 3 miles away from ft Jackson. It is an easy trip 2 or 3 times a month and always a pleasure to be on post and see the soldiers.. I have shopped there for the last 27 years. I see it as a reward for military retirement and Vietnam..
Honestly the comissary where we’re stationed ( Fort Irwin, California) is not good at all. I drive over an hour (nearly 3 hours round trip) with a cooler most months to avoid shopping there. Thier prices are the same as for say, walmart!! Yes places like safeway may be more expensive but walmart has huge selections and cheap prices! Also the comissary has expired stuff on the shelves, some even over a year old that I’ve pointed out!! Employees are paid 13/hour starting and if they’re worked there for years up to 22+/hourly. So I really wouldn’t mind any closing down as they’re not that good. I’m not sure what all these people are talking about, unless miraculously their areas have great comissaries because I’ve been to a few in different states and cities, while some are a little better than others, they’re nothing special at the least. Unfortunately where I live the closest town is 40 mins away and has the smallest/worst walmart ever so there’s no escaping it unless you do the 3 hour round trip drive I mentioned earlier. Good luck to everyone and I hope you find ways to manage your money, life, and shopping better because the comissary is not your only hope by far!! Militaryshoppers.com also has contests every month giving away giftcard of 50$, etc. I’ve won one and haven’t seen a giftcard come in like they said would. No response to me email either. Not sure if they work with comissary or not but if they do and if people really recieve those monthly contests money then they should stop doing it! I’m fine by not recieving the 50$ I supposedly won but if every one didn’t recieve it it might help to keep the comissary open for the people that depend in it for some reason. And paying the employees less too, just a thought. The benefits and wages are so good where I live (for civilians) that all the employees drive over an hour just to work here daily! Imagine that!! You know they’re paid good because there’s plenty of jobs where they live!! I’m not trying to down anyone, just giving some info along with my thoughts. Take care all.
It seems like every time money is needed they turn to the military to take things away. After twenty plus years of sacrifice can you please choose someone else this time? Enough is enough. Let Congress do away with their automatic raises and give something to the military for a change. We would like to have automatic raises just like they do.
The United States Congress has very few members who have served in the Armed Forces. Therefore, they do not have a feel as to what the impact would be if they cut the $1.5 billion subsidey to our commisaries. We have a lot of the members of Congress receiving campaign contributions from business that would like to see the commisaries closed so that they would get the business. It does not matter who gets elected to be our next President because the members of Congress that want to cut government expenditures will be making that decision. If the commisaries are closed, then they may as well close the Exchange stores. I will contact my two Senators and Representative to tell them to support active duty and retirees benefits that we were promised when they needed people to join up.
Please don’t close our commissaries, it is one of many benefits that were promised to us when we joined the Armed Forces.
We are being sapped of our benefits a little at a time…before you know it, we won’t have anything left.
Food costs are soaring daily