Can Your Commissary Benefit Be Saved?

Wednesday, April 02, 2014

Picture this. You are purchasing groceries for your family at your go-to store. The usual traffic of shoppers is lighter, the prices you have come to rely on have increased, and the friends and co-workers you are used to bumping into are nowhere to be found. Are you at a chain grocery store in your neighborhood? No, it could be the commissary of the future if some members of Congress have anything to say about it.

The Defense Commissary Agency has been a tantalizing target in the three years Congress has been grappling with how to cut the defense budget. Congress isn’t alone in eyeing the commissary for cuts. The fiscal year 2016 defense budget request and the final recommendations of the Military Compensation and Retirement Modernization Commission have also proposed changes in funding and operation of commissaries to save money.

The compensation commission, whose recommendations are pending before Congress, doesn’t want to close commissaries. It does call for management efficiencies that would include consolidating commissaries with exchanges into a single defense resale organization that would continue to sell some products, such as food, at cost but would sell other products at a profit.

Additionally, the compensation commission proposed changing the employee status of about 12,000 workers. They are now government service or wage grade employees, but would be converted to non-appropriated fund status. This would strip away specific government compensation pay grades and could drastically reduce retirement plans and health care coverage. This would unintentionally hurt military families because approximately 28 percent of commissary employees are military spouses.

The 2016 budget request from President Barack Obama calls for a $1 billion cut over three years in taxpayer funding for commissaries, beginning with a $300 million reduction in 2016.  Achieving this savings could require cutbacks in store hours or even increased prices.

The rub in all this is that the efforts to save money could drive some shoppers away because of reduced hours or days when stores are closed and through higher prices. The Defense Department has estimated the current 30 percent average savings at commissaries could be reduced to 10 percent savings as a result of a $1 billion cut in taxpayer funding. Those price increases could erode the strong brand loyalty commissaries have held among military shoppers.

A new Rand Corp. report warns that shoppers may go elsewhere to find better bargains, and that the erosion of commissaries as a perceived benefit could hurt military recruiting and retention, cut funding for morale, welfare and recreation programs, and also hurt military exchanges, since shoppers may be less likely to shop at exchanges if they don’t visit commissaries.

So there you have it. The commissary, a benefit that according to the Defense Manpower Data Center is used by 90 percent of military service members and rated by an Army Times Survey as “high priority” by 80 percent of respondents, is in trouble.  Congress is listening. Have you made your voice heard?