Update on Commissary Reform
Wednesday, April 27, 2016
Last Thursday TREA Washington Office staff members participated in a conference call with Defense Department Officials regarding DoD’s plans for the commissary system. Congress has directed the commissary system to implement pilot programs to find ways to reduce the costs of commissaries to taxpayers and commissary officials have pledged to try and determine which reforms can be put into place that will keep the benefit for commissary customers but also reduce commissary dependence on taxpayer support.
The officials in the call repeated their pledge that their priority is to save the benefit while running commissaries as efficiently as possible. This is very different from past DoD proposals that would have raised commissary prices, reduced operating hours and reduced the number of days commissaries would be open.
Instead, they want to initiate pilot programs to test what they call “variable pricing” and introducing their own generic products, like virtually every grocery store now offers, as do AAFES exchanges. They also want to institute common back office procedures within all commissary stores with the aim of achieving financial savings. Finally, they will be looking at ways to expand the business. Unfortunately, that last point did not get discussed, so we are going to go back to them and ask what they have in mind for business expansion.
They are going to implement two types of tests, one involving several stores and variable pricing, and the other involving testing generic products across the whole system.
They also said they have no plans to close any commissaries that are not already scheduled to be closed.
While we are cautiously optimistic about how DoD is approaching the commissary issue, we have concerns about the continuing issues of consolidation of commissaries and exchanges and privatization. The officials we spoke with gave their assurances that those would not be considered, but they are getting strong pressure from Congress to look at those alternatives.
In addition, implementing their plans for variable pricing needs to be watched closely to make sure that, in fact, the overall commissary benefit is saved and that it will not result in patrons having to pay higher prices.
TREA is active in a coalition of military and veterans groups to save the commissary benefit and we will continue our active and close involvement as the process goes forward.