This article by Karen Jowers originally appeared on Military Times, the nation's largest independent newsroom dedicated to covering the military and veteran community.
After a couple of years of increases, commissary savings slipped in U.S. stores in 2020, according to results from the most recent commissary savings report.
Savings in U.S. commissaries decreased by 1.2 points — down to 21.1 percent in 2020 from the 22.3 percent savings calculated in 2019. Commissary officials compare prices in each geographic area to determine how much, on average, a commissary shopper could expect to save on grocery purchases compared with local commercial grocers in that area outside the gate.
Factoring in the overseas savings which increased by 0.4 points – to 42.6 percent — average worldwide savings declined by 0.6 point from savings in 2019, to 25 percent savings worldwide, officials stated.
“Natural variations in pricing are expected, given free market dynamics where suppliers and retailers compete,” said Defense Commissary Agency spokesman Kevin Robinson when asked about the decrease. He noted that DeCA’s calculation for savings includes both internal pricing data and external data from commercial grocers.
“Despite these variations, our goal is always to provide the commissary benefit as consistently as possible,” he said, in an email response to questions.
The 2020 savings percentage is still above the savings level required by law. Commissaries have to maintain savings consistent with the global 23.7 percent savings baseline set in the fall of 2016 before these military grocery stores went to a new pricing system.
“The commissary still represents a huge value to military families,” said Nicole Russell, government relations deputy director for the National Military Family Association. “The uptick in commissary sales during the pandemic illustrates it’s a vital resource to families, particularly those struggling financially.”
The commissary agency has been required to track customer savings since fiscal 2016, in order to help defense officials and Congress monitor the commissary benefit.
Congress requires the commissary agency to maintain savings levels that are reasonably consistent with the 2016 baseline, since the agency can now use variable pricing — lowering or raising prices on items, rather than selling commissary items at cost from the vendor, as they did for decades previously. The stores also require a 5 percent surcharge on the purchases, added at the cash register, which helps pay for new or renovated commissaries.
Commissary officials have had the authority to change prices since 2017, as a means of being competitive with local stores, and to allow commissaries to use some of the profit made to reduce the amount of taxpayer dollars — over $1 billion a year — that’s used to operate the stores. The taxpayer dollars going to the provide the commissary benefit have been a target of a number of people in DoD in efforts to save money. The Senate Armed Services Committee has directed the Government Accountability Office to report on the extent the commissary agency has implemented reforms, and to report on the effect these reforms have had on customer savings and satisfaction, among other things. Lawmakers note that commissary sales fell from $5.5 billion globally in fiscal 2015 to $4.5 billion in fiscal 2019.
The commissary agency also received more than $34 million in COVID relief funds in 2020 for personal protective equipment, cleaning and disinfecting supplies, increased store hours for part-time employees to help with store cleanup and shelf stocking, and to pay for additional air shipments to Europe and Pacific and truck deliveries to meet surge demands for products for overseas customers.
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The 1.2 point decrease in savings in the U.S. “isn’t significant, given everything that’s happened. I think they’re holding steady, given the circumstances,” said Steve Rossetti, president of the American Logistics Association.
The commissary agency compares prices with commercial grocers, including at least one supercenter, in the local area of each commissary in the U.S. The savings comparison measures about 38,000 specific items at a regional level, and local prices of about 1,000 products that are representative of a shopper’s typical market basket, officials said. Each quarter, the agency does comparisons of one-fourth of the stores, with all the stores undergoing market basket comparison over the course of a year. But in 2020, COVID caused the agency to cancel comparisons scheduled from April through June, because of considerations about physical visits to stores. Officials said that loss of one quarter of the store surveys “did not have a statistically significant impact on the savings levels.
The situation with COVID-19 has caused a variety of problems for the Defense Commissary Agency. Although defense officials declared the stores to be essential and they were kept open, there have been rampant restrictions on entry at a number of bases, which affected any customers, including retirees. Commissary officials have also had problems with shortages of products, and have raised concerns that they weren’t getting their fair share of products from vendors, in comparison to civilian stores. Civilian stores’ volume has been increasing.
The volume has dropped off significantly, which pushes up the cost per unit being shipped.
In the 12 months ending in December, grocery prices increased overall by 3.9 percent, according to the Consumer Price Index. The Defense Commissary Agency doesn’t release information about the overall price increases specifically in commissaries, as it considers pricing data to be proprietary.
The commissary agency’s savings report compares prices with civilian stores to determine the level of savings the benefit offers.
Here’s how much you’re saving, based on where you live (Source: Defense Commissary Agency):
- New England Region (25 stores): 21.4% baseline savings in 2016, 21.8% savings in 2020.
- South Atlantic (22 stores): 19.9% baseline savings in 2016, 18.7% savings in 2020.
- North Central (13 stores): 20.2% baseline savings in 2016, 21.4% savings in 2020.
- South Central (26 stores): 18.1% baseline savings in 2016, 18.9% savings in 2020.
- Mountain (15 stores): 17.6% baseline savings in 2016, 20.0% savings in 2020.
- Pacific (22 stores): 20.9% baseline savings in 2016, 22.6% savings in 2020.
- Alaska and Hawaii (7 stores): 32.6% baseline savings in 2016, 33.2% savings in 2020.
- Total U.S. (130 stores surveyed over 3 quarters due to COVID): 20.2% baseline savings in 2016, 21.1% savings in 2020.
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