Savings enjoyed by commissary customers compared with civilian shoppers fell slightly last year, according to newly released figures, but commissary officials and members of Congress are touting the results as positive indicators for the commissary benefit in the midst of its reform.
However, military family advocates said they hoped some of the reforms, particularly the introduction of private-label products, would’ve led to a better bottom line for military patrons.
Customers’ overall savings at commissaries worldwide declined slightly in 2017 ― by 0.3 of a percentage point ― according to the commissary agency’s price comparisons. Overall savings for 2017, when compared with prices at civilian stores, sat at 23.32 percent in 2017, down from the 23.65 percent reported for 2016, before the new commissary pricing reforms went into effect.
The baseline was determined by price comparisons in the fall of 2016. Commissary officials said the law requires savings to be “reasonably consistent” with that baseline.
Commissary shoppers in the U.S., to include Alaska and Hawaii, are saving 19.9 percent compared with civilian shoppers, down 0.3 of a percentage point from the savings of 20.2 percent in fiscal 2016, according to the Defense Commissary Agency.
“It is encouraging to see the overall savings that the 2016 reforms mandated are being maintained for the second year in a row,” said Alison Lynn, spokeswoman for the House Armed Services Committee.
Members of Congress “want to see these benefits preserved and that means they want the reforms to succeed,” she said. “If there is a concern that congressional intent is not being realized with these reforms, Members won’t be shy about righting the ship.”
Defense Commissary Agency interim director Robert Bianchi, a retired Navy rear admiral, also praised the findings, saying “the value of the commissary benefit continues to add up for our patrons when compared to commercial retailers outside the gate.”
|Area||2016 savings %||FY 2017 savings %||change|
|Total U.S. (including Alaska and Hawaii)||20.2%||19.9%||-0.3|
The largest declines were overseas (down 1.4 percentage points, to 42.7 percent savings), and in the South Atlantic area (down 1.5 percentage points, to 18.4 percent savings). In four of the seven U.S. regions, there were slight increases in savings percentages. In the Pacific region comparison for 31 stores in California and Washington, savings were up by 0.6 of a percentage point.
The agency’s announcement attributed the savings decline “to a combination of lower savings in certain U.S. regions, and a drop in overseas savings linked to a lower average Cost of Living Allowance (COLA) in fiscal 2017.” These COLA fluctuations have a direct impact on the commissary agency’s level of overseas savings, officials noted.
The statement didn’t address what effect, if any, fundamental changes to the commissary pricing system, which began in 2017, had on the savings.
Until that year, commissaries sold products at cost plus a 5 percent surcharge to cover infrastructure. Now, they can mark prices up or down to account for local market fluctuations, lure in new customers, or help reduce the $1.4 billion in taxpayer dollars going to the commissaries each year.
According to feedback from industry suppliers, commissary officials haven’t been marking down prices of national brands for customers, though some have fallen recently thanks to the Your Everyday Savings program, which began earlier this month. Up to that point, officials either have increased prices on national brands or have kept them the same, said Tom Gordy, president of the Armed Forces Marketing Council.
“There’s not a clear understanding from industry’s perspective of what drives a price increase, or maintaining it at a consistent level,” he said.
Along with these changes, commissary officials began rolling out various types of private label items a year ago. These brands are designed to be high-quality, low-cost alternatives to national brand products, offering commissary customers extra savings.
Eileen Huck, government relations deputy director of the National Military Family Association, said the drop in savings was “surprising, given the rollout of private label, which was supposed to provide an increase in savings. What does this mean in terms of what they’re doing to the prices of [national] brand items?”
|Region||2016 savings %||FY 2017 savings %||change*|
|New England (36 stores)||21.4%||20.2%||-1.2|
|South Atlantic (30 stores)||19.9%||18.4%||-1.5|
|North Central (18 stores)||20.2%||20.3%||+0.1|
|South Central (33 stores)||18.1%||18.3%||+0.1|
|Mountain (20 stores)||17.6%||18%||+0.4|
|Pacific (31 stores)||20.9%||21.5%||+0.6|
|Alaska and Hawaii (9 stores)||32.6%||31.8%||-0.8|
|*differences due to rounding|