Amid the whirlwind of changes within the Defense Department under the Trump administration, commissary agency officials said the organization is looking to strengthen the benefit for customers.
“We’re going to use everything that is happening to make [the Defense Commissary Agency] a better organization. This is a strategic opportunity for DeCA to transform itself,” said John Hall, director of the Defense Commissary Agency, at an American Logistics Association meeting in Richmond, Virginia, on April 22.
“We’re going to become more like a commercial grocery chain than ever before. We’ll be a commercial grocery chain that happens to work for the Department of Defense. … By that I mean we’ll offer all the products and services, all those good things you see in a good commercial grocery chain, and while doing that, we’re going to continue to deliver 25% savings,” Hall said.
Privatization of commissaries and exchanges has come to the forefront of discussions, in light of an April 7 memo from Deputy Secretary of Defense Steve Feinberg on restructuring the DOD civilian workforce, which stated, “All functions that are not inherently governmental (e.g. retail sales and recreation) should be prioritized for privatization.”
But officials are contending with more than just the Feinberg memo, said Steve Rossetti, president of ALA. In addition to discussions in Congress about privatizing programs and services on military installations, the Trump administration has taken steps to reduce the federal workforce and implemented a hiring freeze. There’s also the tariff situation, and its looming effect on military stores, which sell many of the same products carried by civilian stores.
About 200 of DeCA’s 12,500 employees took the federal workforce early buyout offer, Hall said. While some of those were key people whom officials will need to figure out how to replace, he said, there hasn’t been much of an effect otherwise. The agency hasn’t been significantly impacted by the hiring freeze so far, Hall said, but officials are asking DOD for some exemptions to keep workers in the stores and in the central distribution centers.
“The longer it goes, the more likely it will start to have an effect,” he said.
Still, DOD and commissary officials are taking steps to improve commissaries for troops and families, and officials said they are seeing results. Officials are expected to soon award a contract for nationwide doorstep delivery and are continuing efforts to improve the supply chain to decrease costs for suppliers, customers and the commissary system.
RELATED
The agency has also taken steps to lower egg prices and stock more products on shelves, among other efforts, to improve customer experience.
As egg prices soared earlier this year, officials were able to use variable pricing to lower egg prices at commissaries. A relatively new pricing tool for the agency, variable pricing involves marking up the price of some products to pay for lowering the cost of others. Until 2017, all commissary products were priced at the cost from the supplier/manufacturer.
“We were spending up to $500,000 a week to lower the prices of eggs for our service members and their families. We were at about 24.2% savings overall in eggs compared to the market,” Hall said.
Overall, commissaries have made progress in improving the availability of products, called the “in-stock rate” in the retail industry. The in-stock rate for commissaries overall is 97%, up from 95% a year ago.
“That means that when a patron walks into the store, they’re going to get about 97% of the products that they’re looking for,” Hall said.
Officials are working to address stores with lower rates, and aim to increase the overall rate to 98%. He added that the in-stock rates for commercial grocery chains average about 93.5%.
Hall highlighted commissaries in Guam, which have had an in-stock rate in the mid-to-upper 80% range, he said. For the last two months, the in-stock rate has been at 95%, approaching 96%. Changes made at Guam commissaries — carrying more of what customers locally want to buy and simultaneously driving up the in-stock rates — resulted in a 20% increase in sales, he said, and officials want to apply those lessons across the system’s 235 stores.
Commissary sales have also increased over the last four years, reversing a decline over the previous 10 years, Hall said.
“That’s far beyond what commercial grocery chains have done in the last three and a half years or so,” he said.
In fiscal 2024, commissary sales were $4.7 billion, up more than 17% since 2020. In 2012, dollar sales were $6 billion.
Sales overall in commissaries are up by about 2.5% this fiscal year compared to the same period last year, he said.
About 77% of active duty members and families who live within 20 miles of a commissary shop at least once a month there, Hall said. Of the households with retirees and disabled veterans living within that radius, about 35% use the commissary.
Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book “A Battle Plan for Supporting Military Families.” She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.
