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MILITARY UPDATE: Ex-commissary chief warns cuts could topple resale system
Sierra Vista Herald ^

Posted on 04/27/2014 6:49:36 PM PDT by SandRat

A retired Army sergeant first class living in Northeast El Paso, Texas, says he and his wife will stop shopping on Fort Bliss if the Department of Defense allows commissary prices to climb, as planned, to within 10 percent of local grocers.

“I am not the only one here who thinks the same way,” said Louis Lindemann. “By the time we pay for gas alone, we could go to the local Albertson’s or the Walmart food store around the corner. The commissary already has a number of items we can purchase cheaper on the economy.”

His email arrived moments after I had concluded a phone interview with retired Army Major Gen. Richard E. Beale Jr., former director of the Defense Commissary Agency (DeCA), who believes Lindemann is correct.

So many retirees, Reserve and Guard members and even active duty families would stop shopping on base, if DoD is allowed to slash commissary budgets, that the entire military resale system would be at risk, Beale said.

Defense Secretary Chuck Hagel, backed by the Joint Chiefs of Staff, wants DeCA’s annual appropriation of $1.4 billion cut to $400 million by 2017. Average shopper savings of 30 percent would fall to 10 percent as commissaries become self-supporting like the military exchange systems.

Beale, who led DeCA from 1992 to 1999 both as an officer and as the agency’s first civilian director, said such a deep cut is enormously risky.

“The role of the dice is not just on whether the commissaries will survive, it’s whether the entire system can survive,” including exchanges and the on-base quality-of-life programs that exchange profits now support.

“I certainly understand the predicament in which our civilian and military leaders find themselves,” Beale said to begin our interview. With defense budgets squeezed and automatic cuts threatened if Defense officials don’t identify enough cuts on their own, “there are no good choices.”

However, Beale said, leaders are mistaken to assume commissaries can be converted into self-supporting stores and still offer discounts that attract enough customers to sustain a low-cost grocery benefit.

“What makes the commissary benefit are the appropriated dollars,” Beale said, urging me to underscore the point. “And every dollar you take away from the appropriation is a dollar out of service members’ pockets.”

Defense officials believe by 2017 they will only need $400 million a year for commissaries, to transport goods to stores overseas and to subsidize stores in remote stateside locations. Otherwise, stores can operate on their own if prices are raised, and average savings lowered, from 30 percent to 10.

What they overlook, Beale said, is how critical robust commissary savings are to exchange operations. Traditionally, 35 to 45 percent of exchange shoppers are enticed to shop on base by commissary savings, where food prices are set at cost plus a five percent surcharge.

If those prices climb 20 percent to be able to pay staff salaries and other costs, not only would the number of commissary patrons fall sharply but also exchanges would see their businesses plummet, Beale predicted.

“Can you put commissaries on a cost-recovery basis using a business model like the exchanges and JC Penny and Walmart? In theory yes,” Beale said. “In reality the answer probably is no.”

The big reason is patrons won’t accept it.

“Every dollar you take away from the appropriation has to be paid by someone. That someone, in this case, is the patron,” Beale said, “because DeCA has no other way of raising revenue.”

Without hefty savings, many retirees, Guard and Reserve personnel and even active duty families living far from base have little incentive to drive past their local supercenters and grocery stores to shop on base.

Another reason the idea is risky, Beale said, is that as food discounts narrow and sales drop, commissary suppliers will raise product prices to try to offset lost profits.

Beale recalled that while he was DeCA director, the agency also was under enormous pressure to reduce its appropriations. That’s when it began using a nationwide estimate of average shopper savings to tout the benefit.

“The notion of 30 percent savings on groceries for the military community was a useful sound bite, slogan, bumper sticker and rally cry,” he said. But “it has now created a perception of a standard which can be trimmed with minimum consequences.”

The 30-percent savings estimate is derived by comparing DeCA’s Basic Ordering Agreement price points, as offered by suppliers, with pricing strategies used by grocery chains. But what commissary shoppers actually save varies widely by region based on local food prices, Beale explained.

“For example, in my last year at DeCA when the published national savings exceeded 29 percent, the Southern Region savings were in the low 20’s whereas in the Northwest-Pacific region savings were in mid-30’s. And so it went across the country,” Beale said.

More than half of active duty forces and retired military live between Tidewater, Va., and East Texas, he said, where actual commissary savings are “much lower than the published national average. I have maintained that position personally since I was the director. Publicly, I stuck with the party line. In retrospect, that may have been a mistake.”

It means that if commissary prices are allowed to pop by 20 percent over the next three years, shoppers in the south and southeast are likely to see their discounts from shopping on base all but disappeared.

“Basing budget decisions for DeCA, and the welfare of service members, on an average national commissary savings figure is about as useless as trying to calculate an average supplement for basic housing allowances by relying upon a single nationwide figure for cost of housing,” Beale said.

And so a figure used for the last 15 to 20 years to help justify the commissary benefit is now used to justify reducing it, he said.

A better figure for leaders to weigh today might be “one quarter of one percent of the defense budget.” That’s all that’s needed, he said, to preserve a benefit the U.S. military has enjoyed, in some form, for the past 189 years.

Send comments to Military Update, P.O. Box 231111, Centreville, VA, 20120, email milupdate@aol.com or twitter: Tom Philpott @Military_Update.

TOM PHILPOT is a syndicated columnist and freelance writer. He has covered the U.S. military for more than 30 years. Military Update, which reaches two million readers, covers breaking news affecting the lives of service members, retirees, Reserve and Guard members and their families.


TOPICS: Foreign Affairs; Government; US: Texas
KEYWORDS: commissary; cuts; sechagel

1 posted on 04/27/2014 6:49:36 PM PDT by SandRat
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To: SandRat

Der Fuehrer’s Cloward - Piven’s effects continue on their path of destruction...


2 posted on 04/27/2014 6:51:43 PM PDT by jsanders2001
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To: SandRat; blueyon; KitJ; T Minus Four; xzins; CMS; The Sailor; ab01; txradioguy; Jet Jaguar; ...

Active Duty/Retiree ping.


3 posted on 04/27/2014 6:52:39 PM PDT by Jet Jaguar (Resist in place.)
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To: SandRat

“A domestic peace force just as big and well-funded as the US military...”

That means TWO things:

1. Boost spending on new, weird types of goons

2. Radically cut-back military spending

His plan is the have a new entity that goes around suppressing the US populace —a non-stop SWATting of the whole USA.


4 posted on 04/27/2014 6:57:31 PM PDT by gaijin
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To: SandRat
More than half of active duty forces and retired military live between Tidewater, Va., and East Texas, he said, where actual commissary savings are “much lower than the published national average. I have maintained that position personally since I was the director. Publicly, I stuck with the party line. In retrospect, that may have been a mistake.”

It's called lying, sarge and it's always wrong.

5 posted on 04/27/2014 6:58:40 PM PDT by Graybeard58 (If any man love not the Lord Jesus Christ, let him be Anathema Maranatha. 1 Cor 16: 32)
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To: SandRat

They demand that the soldiers who give so much to defend America bend over and get the shaft, but when it come to the post office we are all supposed to bend over and take it up the *$$ for their incompetence and just keep feeding them more of our money!


6 posted on 04/27/2014 7:04:58 PM PDT by Mastador1 (I'll take a bad dog over a good politician any day!)
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To: SandRat

The commissary and PX system will be gone within 10 years or sooner if the Obama Administration can manage. Replacing them will be Walmart or some other big box discounter who will operate franchises on military installations in much the same way that Burger King operates today.

Savings will be very similar to that seen at the local Walmart, but the selection, service, and conveniences will be less.


7 posted on 04/27/2014 7:12:06 PM PDT by centurion316
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To: centurion316

You are exactly right.


8 posted on 04/27/2014 7:17:52 PM PDT by Psalm 144 (FIGHT! FIGHT! SEVERE CONSERVATIVE AND THE WILD RIGHT!)
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To: SandRat
still waiting for that case load sale that never was because of the petulant little arrogant dictator....

commissaires do not offer "hefty" savings, not when you consider the 5% and the tipping...not when you take into account that people off base have to travel some good distances to get there...

but they do offer good savings is you're careful....

back when hubby was "in" the area had coupon wars with two different chains offering double and triple coupon savings....it beat the commissary in a heartbeat....

9 posted on 04/27/2014 7:19:04 PM PDT by cherry
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To: jsanders2001

Being one of those old retired farts in the southeast the man is right.

I’ve got 2 Food Lions within two miles of me and two Wal-marts and a Sam’s Club within 3 miles.

The closest Commissary is through a check point and on Ft Bragg seven miles away.

There are still enough good deals out there for us to plan a trip to get a few good items once a month or so.


10 posted on 04/27/2014 7:22:19 PM PDT by PeteB570 ( Islam is the sea in which the Terrorist Shark swims. The deeper the sea the larger the shark.)
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To: SandRat
still waiting for that case load sale that never was because of the petulant little arrogant dictator....

commissaires do not offer "hefty" savings, not when you consider the 5% and the tipping...not when you take into account that people off base have to travel some good distances to get there...

but they do offer good savings is you're careful....

back when hubby was "in" the area had coupon wars with two different chains offering double and triple coupon savings....it beat the commissary in a heartbeat....

11 posted on 04/27/2014 7:22:59 PM PDT by cherry
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To: SandRat

well so what? big woop You can do better off post anyway at Wally World


12 posted on 04/27/2014 7:33:42 PM PDT by yldstrk ( My heroes have always been cowboys)
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To: cherry

you forgot to throw in the fruit & veggies that spoil by the time you get it home...

give the franchise to walmart.


13 posted on 04/27/2014 7:35:25 PM PDT by redlegplanner ( No Representation without Taxation)
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To: yldstrk

Not in many places overseas you cant.


14 posted on 04/27/2014 7:40:30 PM PDT by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: cherry

I have found the same thing. It is not any cheaper to shop at the commissary than it is to shop at HEB. The commissary does have good deals on certain items that we go buy once in a while and occasional sales like the case lot sale that are good deals.


15 posted on 04/27/2014 7:40:31 PM PDT by jospehm20
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To: driftdiver

ok I’ll give you overseas


16 posted on 04/27/2014 7:44:15 PM PDT by yldstrk ( My heroes have always been cowboys)
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To: SandRat
Which is it? Do they make a profit, or are they taxpayer subsidized?

DeCA’s annual appropriation of $1.4 billion

The role of the dice is not just on whether the commissaries will survive, it’s whether the entire system can survive,” including exchanges and the on-base quality-of-life programs that exchange profits now support.

17 posted on 04/27/2014 7:45:05 PM PDT by PAR35
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To: SandRat

.........I think about leaders like Obama, Hagel, Biden, Pelosi and Reid and then in the same thoughts I remember the final picture of Mussolini and his wife and Hitler’s and Ava’s corpses and the Japs we hung and most recently Hussein.

Two thoughts:

1. Were Hussein, Hitler, Mussolini and the Japs bigger enemies of the American people than Obama, Hagel, Biden, Pelosi, Reid and others are proving to be? You be the judge.

2. “Every dog has his day”.


18 posted on 04/27/2014 8:25:54 PM PDT by Cen-Tejas (it's the debt bomb stupid!)
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To: yldstrk

Try that in Hawaii.


19 posted on 04/27/2014 8:33:34 PM PDT by petitfour
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To: Graybeard58

That was the retired MGEN/Director of DeCA who said that, not the SFC.


20 posted on 04/27/2014 8:54:42 PM PDT by Alas Babylon!
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To: SandRat
There have always been items that you could purchase for less other places. Since the prices have climbed at the Commissary, most of the time it is not worth the trip. I only go there about twice a year if I am in the area.

The produce almost always looked like warehouse leftovers. I told my husband for years that I thought the buyers were getting kickbacks for buying premium goods but getting the old stuff and seconds. The MacDill AFB store was always so busy there is no way that produce would be spoiled from sitting out too long. You could see them taking poor quality produce right out of the box.

Up until the a couple of years ago, I continued to purchase meat there because it was good quality at a good price. That changed too and the quality took a big turn for the worst within the last 5-0 years, while the prices continued to climb. I get better quality meat at Sam's Club and do most of my other shopping at Aldi. I have found that the Aldi brand groceries that I purchase are good or better than name brands most of the time.

The base exchange was rarely a good place to shop to save money.

No doubt in my mind that the commissary is rife with fraud and employees are less likely to be held accountable.

21 posted on 04/27/2014 9:03:34 PM PDT by GILTN1stborn ( #rememberbenghazi #extortion17 #impeachobama)
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To: PAR35
My dad was XO at 32nd St Naval Station (San Diego) from 1970 to 1977. He worked closely with the Exchange Officer to provide bowling alleys, car repair shops and other amenities for the sailors from the profits. It took good management skill to do that. Perhaps something lacking today.
22 posted on 04/27/2014 9:33:15 PM PDT by Myrddin
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To: Mastador1

Ever hear the old Allman Brothers song, ‘Whipping Post’? Might be time to make it the official anthem for the armed services.


23 posted on 04/27/2014 9:40:00 PM PDT by Foundahardheadedwoman (God don't have a statute of limitations)
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To: Foundahardheadedwoman

By design.

They want the patriots out of the military....and introduce a draft to turn it into the largest social program there is.


24 posted on 04/27/2014 9:43:37 PM PDT by dfwgator
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To: SandRat

Let them eat peas.


25 posted on 04/27/2014 10:38:38 PM PDT by Organic Panic
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To: Alas Babylon!

My mistake and it was a big one, came from skimming the article instead of carefully reading it. Thanks for the correction.


26 posted on 04/28/2014 4:11:07 AM PDT by Graybeard58 (If any man love not the Lord Jesus Christ, let him be Anathema Maranatha. 1 Cor 16: 32)
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To: SandRat

They always go after the individual low ranking military member or after the veteran or the retiree.

And they pay these kids so little already that they are on food stamps. Now, even their food stamps won’t go as far at a military commissary of all place.

Better to have ObamaPhones at 2 billion a year than to take care of our troops.


27 posted on 04/28/2014 4:45:18 AM PDT by xzins ( Retired Army Chaplain and Proud of It! Those who truly support our troops pray for victory!)
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To: Graybeard58

No problem. My wife used to work for DeCA when we were stationed in Germany. We’re familiar with Beale. For what it’s worth, I considered him a good guy. He was always fighting to keep the Commissary system open, back when Clinton’s Admin wanted to close them completely. He did what he could.

And any GI’s wife can tell you, the savings you get at the commissary really depends on the item you buy and when/if they have a sale. 30% was always propaganda, but if you were smart and followed the sales, you could almost get there.

We now live 30+ miles from the nearest commissary, with 3 Super Walmarts closer to us, so we rarely go to the commissary these days.


28 posted on 04/28/2014 6:06:25 AM PDT by Alas Babylon!
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To: GILTN1stborn

And don’t forget the 5 percent. If you were overseas, do you remember the AFN commercials for the 5%, with the singing cashiers?


29 posted on 04/28/2014 6:08:57 AM PDT by Alas Babylon!
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To: cherry

I hear you...
Many people, including service personnel and retirees don’t realize there’s a “service charge” they pay to use the commissary...it’s right on the receipt.
For the military, the old adage “if they give it to you, they can take it away” is really ominous....


30 posted on 04/28/2014 6:32:16 AM PDT by matginzac
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To: GILTN1stborn

We were stationed at the Army War College when Clinton got elected and lo and behold, the only chicken products you could buy at the post exchange? You got it...Tyson....heh.


31 posted on 04/28/2014 6:35:39 AM PDT by matginzac
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To: Alas Babylon!

LOL -No singing baggers


32 posted on 04/28/2014 6:46:21 AM PDT by GILTN1stborn ( #rememberbenghazi #extortion17 #impeachobama)
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To: GILTN1stborn

Har! That’s right. I did a google search and found a bunch of AFN/AFRTS commercials from the 80s and 90s. A trip down memory lane!


33 posted on 04/28/2014 7:03:47 AM PDT by Alas Babylon!
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To: Alas Babylon!

I’m a 4 year vet, being single at the time, about the only thing I bought at the commissary was cartons of cigs and occaisonally civilian clothes. Cigarettes were way cheaper.


34 posted on 04/28/2014 12:26:16 PM PDT by Graybeard58 (If any man love not the Lord Jesus Christ, let him be Anathema Maranatha. 1 Cor 16: 32)
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To: cherry
"...the area had coupon wars with two different chains offering double and triple coupon savings....it beat the commissary in a heartbeat...."

And why do you suppose those chains had "coupon wars"?

It couldn't have possibly been to undercut the commissary in order to siphon off shoppers now, could it?

In our area, the nearest grocery store is a 30 minute drive from main base...walmart is another 20 minutes or so beyond that and with gas over $4 a gallon, the impact on the service members is going to be significant...

Albertson's has some of the highest prices I've ever seen on the same products carried by the commissary.

Thanks, but I'll work to keep the benefit, even with the oh so egregious 5% surcharge.

35 posted on 04/28/2014 12:55:49 PM PDT by SZonian (Throwing our allegiances to political parties in the long run gave away our liberty.)
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To: jsanders2001

“Der Fuehrer’s Cloward - Piven’s effects continue on their path of destruction...”

This is just the commissary. If you add the true cost of running this for CONUS bases, I’m sure you’ll find that they are expensive white elephants.

There is no good reason for the military not to mingle with the masses as much as reasonably possible, and this one more opportunity to do so.

A military that lives around and amongst the citizenry is less likely to turn on them. That used to be an absurd thought, but it is absurd no longer.

If someone wants to run a grocery store and pay ALL the costs required to do so on base, let ‘em. Otherwise - this is absolutely no hardship for the vast majority of military members - and I used to be one.


36 posted on 04/28/2014 1:05:06 PM PDT by RFEngineer
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To: cherry

The article said the savings are dependent on where you live. Here in Alaska, the 30% savings is no BS. I am consistently amazed comparing prices when I go to the local grocery stores. The savings are less in produce, bakery and dairy, but everything else at the commissary is far cheaper. Even with it being 45 miles away we save with a monthly load up, and it would hurt our budget badly if the commissary shut down.

The exchange now, that’s a worthless store. No point in going there at all.


37 posted on 04/28/2014 9:11:54 PM PDT by GATOR NAVY
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