In the mid-1940s, the Post Exchange at Bradley Field in Connecticut was busy at Christmas time serving the troops doing their holiday shopping. (Photo Credit: U.S. Army Air Corps from the Connecticut State Library). Right, The Boone National Guard Center Post Exchange, Frankfurt, Ky., provides quality services and products to Kentucky National Guardsmen. (Photo Credti: Kentucky National Guard photo).
Sergeant Major of the Army
Kenneth O. Preston, USA, Ret.
Director, Noncommissioned Officer
and Soldier Programs
Greetings to all of you from the Association of the United States Army (AUSA), our Army’s and our soldiers’ professional organization.
I recently attended a meeting of the Exchange Retiree Advisory Council (ERAC) at the Army & Air Force Exchange Service (AAFES) headquarters in Dallas.
With many discussions in the news about the commissary and recent discussions about the exchange, I thought I would share insights I gained from the meeting along with some thoughts about our exchange service.
For more than 117 years, AAFES’ mission has been to support the men and women of the armed forces during military operations, humanitarian missions and other endeavors around the world.
Its motto: "We Go Where You Go" epitomizes their mission to support soldiers and airmen around the world.
AAFES is a joint non-appropriated fund instrumentality of the Department of Defense (DoD) with an enduring two-part mission.
AAFES provides quality merchandise and services to their customers at competitively low prices; and, second, generates earnings that provide dividends to support morale, welfare and recreation (MWR) programs.
AAFES is led by Thomas C. Shull, the director and chief executive officer; Maj. Gen. Joseph S. Ward Jr., the deputy director; and Chief Master Sgt. Anthony "Tony" Pearson, the senior enlisted adviser.
Oversight and governing for AAFES is executed through an 18-member Board of Directors that includes the Air Force A-1, Army G-4, the chief master sergeant of the Air Force and the sergeant major of the Army, along with other senior regional military and civilian leaders from both services.
The board is responsible to the secretaries of the Army and Air Force through the service chiefs of staff.
I provided this discussion about AAFES’ chain of command so you would understand that AAFES is part of our military service and not a private organization doing business on our military installations.
All of us who have been in the Army for any length of time are familiar with the stores and facilities AAFES manages on our military bases.
But did you know that AAFES is the top employer of military spouses in the world?
Also, AAFES has hired more than 480 wounded warriors since 2010.
As the sergeant major of the Army I would frequently be asked about how AAFES sets the prices for their merchandise or how profits are used in this organization.
AAFES currently operates more than 2,800 facilities worldwide.
Like their civilian retailer counterparts, AAFES has leverage by buying in bulk allowing them to price match or beat other retailer pricing.
"Everyone is aligned with our focus on delivering quality goods and services at competitively low prices with superior service," the leadership team said.
Adding, "Together, we make a difference in the quality of life of the service members and their families."
The profit from the goods and services sold is first used to pay all the bills, the utilities and the employees.
AAFES funds 98 percent of its operating budget from the sale of goods and services. The remaining 2 percent of their funding comes from appropriated funds used primarily to support overseas operations.
A portion of the earnings is used for recapitalization and modernization of all existing facilities and to build new facilities as needed.
The largest percentage – two-thirds of the earnings – is paid to MWR to support soldier, airmen and family programs.
Unlike AAFES’ civilian retail counterparts who pay their profits to their shareholders, AAFES’ shareholders are soldiers, airmen and their families.
AAFES provided more than $230 million in dividends to MWR in 2012 for quality-of-life improvements including youth services, Armed Forces Recreation Centers, arts and crafts, aquatic centers, golf courses, play grounds, basketball and tennis courts, gyms and more.
During the ERAC meeting the topic of commissaries was discussed and the question was asked about the impact on AAFES should those facilities close.
On all of our military installations, the exchange and the commissary are generally co-located. The two facilities complement each other and make it easier for families to complete all their shopping needs in one location.
Eliminating commissaries would force military patrons to shop elsewhere for their groceries and it would sever this close tie with exchanges. Predictions indicate severing this relationship would have a dramatic impact on exchanges and the goods and services they provide.
Without the MWR dividends, all of our quality-of-life programs on our military bases would suffer an impact, especially now with the tightening of appropriated fund budgets.
AAFES will celebrate its 118th birthday this year, and we can all be proud of what their facilities continue to do to support our troops in all three components of our Army, our retired soldiers and their families every day.
Check out AAFES’ webpage to see the amazing people who work for us, all the new products and services, and all the new initiatives that are coming.
Go to: http://www.shopmyexchange.com/AboutExchange/
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