Presidents Message/Washington Update 10.23.20

Congratulations to ALA on its 100th Anniversary from the Department of Defense.  Secretary Esper and I are aware of the services you provide…. Your partnership is critical and key to preserving our competitive advantage.”   “We are harnessing the skills of a generation of digital natives…which is exactly the kind of talent we need to attract; retain the people we recruit.”  Matthew Donovan, Under Secretary of Defense (Personnel and Readiness) at the opening day of the ALA Annual Convention. 

The Navy leadership walked the talk and came through in allocating funding to allow us to weather the storm.”   “Sustaining the military resale infrastructure during this pandemic with APF support is a small investment in an insurance policy that represents a worldwide network of ongoing quality of life services, always operating, we just turn up the dial in times of crisis—impossible to replicate this capability with commercial entities.” Rob Bianchi (RAdm-Ret.), NEXCOM CEO at ALA Annual Conference.

We’re leveraging brand equity and gaining more insight into how Marines Shop.”  Cindy Whitman Lacy, CEO/Director, Business and Support Services, HQ US Marine Corps. 

AAFES is working hard to improve cash and liquidity and provide a safe, secure and sanitized shopping environment.” AAFES CEO Tom Shull to the ALA Annual Convention

 “We are very grateful to Secretary Wilke and the entire VA leadership in recognizing our difficulty and coming forward with support.”  Ray Tober, Executive Director, Veterans Canteen Service at the Annual ALA Conference. 

 ‘The goal is, of course, to drive sales. And it is to engage the patron, not only the current patron, but also the patron who may not be visiting DeCA right now.”  Alex Sizemore, senior director of marketing, EURPAC Marketing Retail and Logistics Group and Chairman, American Logistics Association (ALA) Commissary Council

ALA convention packed with information for resale industry and agency partners.  Major announcements are emanating from the ALA convention.  Yesterday, a line-up of top executives from described their major initiatives both during the pandemic and post-pandemic era.  The event featured presentations from: Rob Bianchi, NEXCOM; Cindy Whitman Lacy, MCCS; Tom Shull, AAFES; Bill Moore, DeCA, Ray Tober, Veterans Canteen Service; Berry Patrick, Office of the Secretary of Defense.   More detailed descriptions of the action of the Convention are forthcoming.  The schedule for the October 22 day of the convention appears at the end of this message.  

 Matthew Donovan, Under Secretary of Defense for Personnel and Readiness congratulated ALA on its 100th Anniversary and pledged collaboration with industry to advance military quality of life programs.  Secretary Donovan described:

  • Defense efforts to contend with COVID including enhanced infrastructure and backbones.
  • A tripling of the workload in his vast operation that includes health care, quality of life programs and military readiness programs.
  • Base access and force protection guidance.
  • Supporting the National “whole of government” response to the pandemic.
  • Ensuring installation commanders were provided the authority they needed to meet the pandemic including base access procedures and flexibility.
  • Designating military commissaries as “mission critical”. 
  • ALA’s critical partnership with the DoD.
  • The importance of the exchange and commissary benefit in assisting Defense with the National Defense Strategy
  • Harnessing the skills of a generation of digital natives.
  • Efforts of the DOD to attract talent.
  • Looking at logistics and digital modernization in shoring up Defense supply chains
  • Working toward attaining digital dominance in DoD personnel and readiness programs. 

Marine Corps Community Services at forefront of customer insights.  Cindy Whitman Lacy, CEO/Director, Business and Support Services, HQ US Marine Corps described pandemic measures taken by MCCS.  Proud of her workforce, she said that her folks “showed up and stepped up” to meet the pandemic.  She highlighted the Marine’s strategic priorities including: Mission First; Innovation and Modernization; and Sustainability.  The Marine organization is at the forefront of developing customer insights and Whitman Lacy noted the “further maturation of our model of fully aligning mission and Marine needs and business as a force multiplier leveraging partners and innovation.  She highlighted the results of their recent customer survey on COVID shopping behavior and continuing to strive to remove friction from Maines’ lives.  She described a unified experience with on-line ordering, in-store experience and friend and family contributions. 

Other highlights of her presentation:

  •      58 percent increase in sales at micro-marts
  •       A drop of 13 percent in tobacco sales due to age minimum change
  •       Major increases in sales of electronics, sporting goods, gaming, alcohol.
  •       Major decreases in cosmetics and soft lines.
  •       40 percent of shoppers shopping earlier in season. 
  •       Focusing on brand innovation
  •       Continued examination of the marine Corp base ecosystem and potential for growth incorporating eco-system planning into assessments for master planning
  •       Deployment of micro-marts to barracks, fitness centers and maintenance facilities
  •       Innovation pipeline is rolling out and becoming operational, morphing from vision to commercialization. 

Landmark COVID rapid reaction by NEXCOM.  Way early in the pandemic, NEX moved to establish a Crisis Action Team.  The team leveraged vendor relationships and joint buying, sourced PPE and increased the quantity and quality of shipment frequency of critical items.  Bianchi said ALA can help by keeping inventory in stock; ensuring NEX is prioritized for limited inventory; strengthen value of offerings; promote our events, support our patrons, and be more innovative.  Post COVID present a lot of pent-up opportunity. 

Other highlights of Bianchi’s presentation to the Convention:

  •        Didn’t have a choice—commanders said we had to stay open.  Immediately responded to fleet pandemic-related demand signals.
  •        Agility of being a NAF activity enabled NEX to get out in front of DLA and other appropriated fund entities in responding.
  •        Supported deployment of the hospital Ships Comfort and Mercy
  •        Rushed aid to quarantined sailors       
  •      Reduced inventory 14 percent.
  •        Supplied 558 face coverings to the Fleet
  •        Leveraged NEXCOM’s communications programs to amplify pandemic safety messaging.
  •        Received $80 million in CARES I money from Navy and OSD.  MWR received another $200 million.
  •        Task force looming at 2021 and needs for comfort, safety, capacity and convenience.
  •        Added deployment of WIFI in customer facing operations.
  •        65.7 percent increase in web retail sales
  •        Delivered 98 percent of e-commerce packages on time.
  •        Challenged by closures and apparel sales drops.       NEX scores 4.5 out of 5 on store safety
  •        Drive private brands and eliminate brands that offer less value
  •        Enhance CRM
  •        June to September sales up 1.2 percent
  •        Launch of Better Together campaign with MCX
  •        Striving toward relevance post COVID
  •        Stabilizing margin.
  •        Providing “value and Exclusivity” brand strategy
  •        Continue to several collaboration and cooperation among military resale partners.

AAFES strategic overview and pandemic response.  Tom Shull, AAFES CEO descried the AAFES three-year strategy and Herculean efforts on the part of his team to cope with the pandemic from an operational and financial view.   Shull said that AAFES is working hard to improve cash and liquidity and provide a safe, secure and sanitized shopping environment.  He noted that pandemic impact will affect dividends to MWR programs and doesn’t expect full-strength return to dividends until FY 2022 at the earliest and “more likely 2023 or 2024”.  He commended the Navy leadership for coming forward with pandemic relief funding for NEXCOM and said that AAFES is awaiting and looking forward to help but has to plan to meet all scenarios.  Shull noted an AAFES point of sale program has resulted in nearly $1.5 million in donations to Army Emergency Relief.

Other highlights of CEO Shull’s presentation:

  •       Continue to press vendors for products.  AAFES FY 2020—conserve cash, stabilize the workforce, build and preserve access to debt markets.  Driving to $287 to $687 million increase in liquidity.
  •        Focusing on CAPEX and emerging customer service requirements in 2021
  •      Forecasting $116 million decline in Q1 sales-       Restore earnings performance in FY 2022 and return to full dividend levels in 2-3 years
  •        24,000 personal shopping visits for quarantined troops
  •        Vaccine support offered by AAFES to Operation Warp Speed (National vaccine response)
  •        AAFES has a strong balance sheet
  •       A shortage of five million of computers to meet customer demand
  •       Looking forward to DoD civilian exchange benefit in November
  •       E-com up 88 percent
  •       Manufacturer breadth of assortment dramatically culled as they focus supply on demand and managing to financial constraints
  •       Computers, TVs and sporting goods all showing major gains
  •       224,000 of COVID related associate leave
  •       Deploying mobile field exchanges for pandemic relief
  •       The Veteran on-line shopping benefit has had 178,000 shoppers with 741,000 orders and nearly $13 million in sales tax savings

DeCA collaboration with industry amplified by new DeCA Director Bill Moore.   “My goal is to ensure that every eligible patron enjoys the benefit,” said Bill Moore, Defense logistics expert and now Director of the Defense Commissary Agency at the ALA Annual Convention.  Moore said that he is working to ramp up curbside service with possible innovative interim solutions to jump-start the effort.  He noticed an uptick in sales in the past year but is interested in what it looks like “when you take COVID out of the equation.”  Moore also highlighted his commitment to reinvigorate the collaborative partnership with the resale industry and accelerate the deployment of the Agency’s business systems.  Moore presented a contrast of the commissary benefit versus business attributes and their ability to straddle both sides of that equation.  He implored industry to come forward with increased commodities and recognize the difficult and extended supply chain for troops and families in remote and overseas areas.  

 Other highlights of Director Moore’s presentation:

  • 214 COVID cases reported, 194 recovered, and 19 actives
  • DeCA designated as mission essential during the pandemic
  • HPCON levels impacting sales
  • DAV and retiree shoppers had limited or no access to the benefit
  • Supply channels stressed and higher than normal out of stocks
  • Concerned about eligible patrons not enjoying the benefit
  • IT modernization to slow
  • EBS roll-out underway:
  • Vendor portal planned for 2022
  • Fast lane and mobile shopper in 2021
  • RTI signage and labels in 2020

Authority for civilians to use exchanges under active review in DoD.  Berry Patrick, an official in Secretary Donovan’s operation announced that Defense Department civilian employees may be able to use exchanges under a policy change working its way through the final approval process and being considered by the Department of Defense. If approved, it is expected to add 575,000 new eligible customers.  Berry Patrick works in the DoD Office of Morale, Welfare and Recreation and Non-appropriated Fund Policy and announced the move at the ALA convention.  There are about 796,000 DoD civilians in the U.S., but about 221,000 of those employees already have exchange benefits resulting from another beneficiary category such as retiree or military spouse, he said. The new benefit would apply to both appropriated fund and non-appropriated fund employees, he said.  

Employees would use their Common Access Card to shop.  Patrick said officials believe the benefit will be used more by the civilian employees than by disabled veterans, who were granted commissary, exchange and some MWR benefits as of Jan. 1, 2020. The usage by that population has been less than expected, he said, largely because of the pandemic which has forced restrictions on access to many installations. In addition, many of the 4.2 million newly eligible disabled veterans don’t live near an installation, according to an article in the Military Times.  DoD civilians are on the base every day, he noted. Based on projections of buying patterns, he said, they estimate exchange sales could increase by about $287 million a year, with a potential increase of $48 million in profits going back to support the services’ MWR programs. DoD has been deliberating the policy change for about three years.

One indicator of the popularity of the benefit among DoD employees was the situation in March, when DoD gave base commanders temporary authority to give commissary and exchange privileges to DoD civilians and contractor employees considered mission critical. Many people misinterpreted that to mean that every DoD mission-critical civilian employee automatically got those privileges, and DoD officials were getting phone calls from those potential customers, he said. But it was up to each installation, and some commanders gave the privileges while others didn’t, for various reasons such as concern about the strains on the supply chain’s ability to provide enough products for the stores.

Patrick said as the new benefit rolled out in January to disabled veterans, caregivers and others authorized by law, everything was in place within the resale community, MWR and for installation access. A post-implementation assessment showed there was no negative impact on the facilities, he said.

But COVID came along, resulting in impacts from a variety of reasons, to include some installations limiting access to their installations. Those issues have ebbed and flowed, he said. Currently only about 200,000 in this population of 4.2 million are using their benefits, and exchanges and commissaries have the capacity to take on larger numbers, Patrick said.

Through Sept. 30, commissaries logged about 503,000 transactions from the newly eligible population, and the exchanges estimated about 1.2 million combined transactions over that time period, he said.

He asked for industry’s help in continuing to promote the benefit to the newly eligible population. “We have a long way to go to get from 200,000 to the 4.2 million” extra disabled veterans and others who can use the benefits now, he said.

Other OSD announcements by Mr. Patrick:  

  •        Authorized MWR access on base to emergency workers
  •           Making American Forces Travel available to Veterans
  •          Working to implement the change to the tobacco law
  •         Ramping up efforts and working with ALA to promote the expanded commissary and exchange benefit for disabled veterans
  •         Removing impediments to fast-tracking NAF IT expenditures by having a separate official to work NAF IT issues
  •         Continuing to limit beverage alcohol sales in commissaries to beer and wine and not distilled spirits due to shelf space considerations
  •         Moving to an all-NAF model for lodging

VCS aid, innovative pandemic workarounds. Ray Tober, Executive Director of the Veterans Canteen Service described the tremendous difficulty faced by the pandemic and announced that they are beginning to see the beginnings pandemic relief appropriations coming to support the VCS and head off what would have been the only furloughs in Government due to the pandemic.   Mr. Tober described the work-around that VCS has been accomplishing to keep operations running and changes to the product assortment in the VCS stores to make operations more pandemic-relevant.    

Active ALA 2021 agenda.  ALA’s President Steve Rossetti presented an active agenda for the coming year and a multitude of challenges and opportunities for the resale system.  ALA has 100 years of public service and 2021 is going to be no exception.  During the ALA Annual Conference, Rossetti said that ALA is mobilizing for 2021 with some 12 conferences in the works including DeCA, AAFES, Marine Corps, and NEXCOM.  He also announced pop-up sessions dealing with specific policy issues.   In a far-reaching discussion of the pandemic, Rossetti said that distributors were incurring heavy pandemic costs and that ALA was working to gain funding relief.  Rossetti also cited the extraordinary efforts of the exchanges and DeCA in confronting the pandemic, including active participation with the DoD industrial policy group on a wide range of issues including protective gear, contracting relief, and PPP, vaccine distribution, and contracting and payment issues.  He described the state of play for major legislation passing through the Congress including the Continuing Resolution, pandemic stimulus bills, the NDAA, and appropriations bills.  

Other areas of emphasis were ensuring that all of the exchanges received their fair and equitable share of pandemic relief funding and explained the legislative process for making this funding available.  He cited major costs to resale programs because of strategic restationing of forces that are amounting to over $100 million in construction costs and called for reimbursement of resale entities because these projects were commissary surcharge and non-appropriated funded.  Rossetti reviewed the state of play on legislation moving through the Congress and regulations being considered by the Administration that will affect resale programs including Uyghur forced labor report and sanction, food labeling, diversity training, Section 889 implementation, and the Cybersecurity Maturity Model Certification compliance requirements.  

Rossetti warned of continued pressure to reduce commissary appropriations and the need for continued vigilance.  He also cited the consolidation efforts and the need for continued validation of the cost savings and expense associated with this effort. 

He pointed to language in the defense bills encouraging DoD to keep commissaries open and the inclusion of funding mechanisms to bridge the commissary funding gap between any Government closure to ensure the stores stay open.  

Rossetti cited the ALA membership for their active involvement including the outgoing Chairman Bill Doyle (EURPAC) and he incoming Chairman Michael Sleighter (Advantage Sales) along with the dedication and hard work of the ALA Commissary and Exchange Councils.   

Congressman Rob Wittman to be recognized by ALA with the Distinguished Service Award on Day 2 of the ALA’s Annual Convention. In prepared remarks, Steve Rosetti, President of the ALA will say: “Congressman Wittman has served Virginia’s 1st District since 2007.  He is the Ranking Member of the Sea power and Projection Forces Subcommittee, House Armed Services Committee.  As the ranking Republican on the subcommittee, Congressman Wittman works tirelessly to support a defense and the vital role that our forces play in protecting our commerce sea lanes and projecting U.S. military power in the defense of Freedom.   The Tidewater region includes a vast military Seapower presence and shipbuilding  industry.  Congressman Wittman recognizes this contribution and provides a steady and strong voice in representing United States Maritime interests in the United States Congress. 

 Congressman Wittman has been a consistent supporter for a strong defense and for military quality of life programs including the commissary and exchange programs.  Virginia is the center of gravity and a powerful commerce engine for military resale programs with four of the six resale headquarters located in the state and hundreds of companies serving military resale with their thousands of employees and hundreds of millions of dollars in commerce.  He has led the way in preserving these benefits and in creating and preserving jobs in his district, in Virginia and in the Nation.   Virginia is the chief transit point for moving products and services to commissaries and exchanges on the East Coast and to far flung areas of Europe and the Middle East.  Most recently, he has promoted hundreds of millions of dollars in relief for military resale programs that have been stressed during the pandemic.  I quote from a letter he sent to the Secretary of Defense in May of this year:  

“…as nonappropriated fund instrumentalities of the United States government, these operations are not able to take advantage of the aid programs made available to American businesses by the Congress, Treasury or Federal Reserve.  We can’t afford to have these programs fall through the cracks due to their unique nature and status.  

The exchanges are facing extraordinary costs for personal protective gear and added costs for operating safely in the pandemic.  Further, the exchanges face major re-opening costs when the pandemic subsides, and these costs will further exacerbate an already disastrous financial condition.  

The list is long, and the effects are cascading across the supply chain that supports the exchanges as vendors face curtailment of orders, backed-up inventories, and severe business interruption.   Already there are reports that the exchanges are seeking extended forbearance terms from suppliers to aid the exchanges in their cash flow.  These businesses that support the exchanges should be given the same financial consideration as businesses in the Department of Defense that supply weapons systems and other essential defense needs.”

 “funding should be made available to compensate these suppliers in order to help them weather the pandemic and continue to get vital food products to military bases.  We urge the Department of Defense to make available the funding from resources made available from Congress to the Department to provide a mechanism for needed financial infusion to these programs in order to optimize this critical supply channel.”

 Congressman Wittman led the way on including language in the Defense Bill to provide a path for keeping commissaries open during budget impasse-driven government shutdowns.   He has always been there for this system and for our military people. “

Defense guidance is expected on President’s Executive Order on diversity training.  DoD officials say that they are working on guidance to implement a recent Presidential Executive Order on diversity training.  The officials say the guidance will describe how Government contractors must comply.  Stay tuned.   

What’s going on here?  In April, the Food Industry Association and the International Foodservice Distributors Association (IFDA) formed an ad-hoc partnership in response to rising shopper needs amid the coronavirus pandemic. The program connects foodservice distributors that have excess capacity in the areas of products, transportation services and warehousing services with food retailers and wholesalers in need of additional resources to meet grocery stores’ surging demand.  Last week, Longtime Target supply chain executive Bill Hancock has joined US Foods Holdings Corp. as EVP and chief supply chain officer to help the foodservice distributor execute its “Great Food. Made Easy,” strategy.  Hancock joins the $26 billion company at a time when its core foodservice customers have been hit hard by the pandemic and ceded market share to food retailers. Hancock will oversee all warehousing, transportation, supply chain strategy and operations, safety, labor relations and continuous improvement at US Foods and report to chairman and CEO Pietro Satriano.

In April, US Foods paid $970 million to acquire 70 small format cash and carry stores that Smart & Final operated under the banner of Smart Foodservice Warehouse. The stores, located in California, Washington, Oregon, Idaho, Nevada, Utah and Montana, serve small and mid-sized restaurants and other food business customers and offer about 8,000 items.  More recently, US Foods launched US Foods Ghost Kitchens to help its customers establish and operate facilities dedicated to off-premise dining. A recent National Restaurant Association survey found that 75% of restaurant operators consider off-premise dining their best growth opportunity.  “The Ghost Kitchens program was developed in response to growing interest among our customers, but we’ve also been tracking the trend, and ghost kitchens are projected to reach a $1 trillion global market by 2030, making them an attractive concept for operators even after dine-in restrictions are lifted,” Jim Osborne, US Foods SVP of customer strategy and innovation said when the program was launched in August.  The moves could help US Foods rebound from the devastating effects COVID-19 has had on the foodservice industry. Those effects were evident when the company reported second quarter results which saw sales decline 29.2% to $4.6 billion.

As military resale programs look to more curbside and BOPIS options, the commercial grocery industry has added a new twist to customer pickup.  Albertsons Cos. is adding PickUp lockers to its e-commerce arsenal in select Chicago Jewel-Osco and Bay Area Safeway stores.  The Boise, Idaho-based company is testing lockers as the newest easy fulfillment option for e-commerce shoppers. Albertsons already offers in-house Delivery and Drive Up & Go options through its websites and apps and has partnerships with third-party operators to provide fast delivery options.  Albertsons, reported a 276% increase in digital sales in its first fiscal quarter and continues to add Drive Up & Go stores throughout the country, said that it’s looking at all of the ways that it can make customers’ lives – and their grocery shopping – easier.  “Contactless PickUp through our state-of-the-art, temperature-controlled lockers makes it even easier to shop with us,” said Chris Rupp, EVP and chief customer and digital officer. “Whether customers choose to shop in our familiar neighborhood stores or through our websites and apps, we are ready to provide them with extraordinary service where and how they want to get their groceries. Our strategy to leverage technology and innovation to continue to grow our digital business is focused on creating products customers love that truly make their lives easier.”  Delivered by Bell and Howell, the lockers are modular, temperature-controlled, and suitable for both indoor and outdoor environments. Individual columns in the modular setup can be adjusted dynamically to ensure specific temperatures required to meet the wide needs of a variety of customers’ online orders are maintained.

Said Larry Blue, CEO of Wheeling, Illinois-based Bell and Howell. “With our temperature-controlled grocery lockers, Albertsons Cos. customers can quickly and conveniently pick up their entire order, from heated to frozen food items, whenever and wherever they want.” 

The lockers will first be available in select Jewel-Osco locations in Chicago and are expected to be installed at select Safeway locations in the Bay Area later in the year. Customers who live in neighborhoods with stores that feature the lockers will notice a new “PickUp” option when they shop on the store’s website or app. 

Customers who select the PickUp option will be asked to select a time window to pick up their groceries. Once customers complete their purchase, they receive a unique code that they will use to quickly pick up their order from the self-serve lockers.  Albertsons operates 2,252 retail stores with 1,726 pharmacies, 402 associated fuel centers, 23 dedicated distribution centers and 20 manufacturing facilities. The company’s stores predominantly operate under the banners Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw’s, Star Market, United Supermarkets, Market Street and Haggen.

 Kellogg Brown & Root Services Inc., Houston, Texas, has been awarded a ceiling $974,000,000 indefinite-delivery/indefinite-quantity contract for U.S. Air Forces in Europe – Air Forces Africa (USAFE-AFAFRICA) base operating support. This contract provides day-to-day base operations and maintenance services throughout locations within USAFE-AFAFRICA. Work will be performed at Morón Air Base (AB), Spain; Incirlik AB, Turkey; Izmir Air Station, Turkey; Office of Defense Cooperation-Turkey; and Ankara Support Facility, Turkey, and is expected to be completed by Aug. 27, 2028. This award is the result of a competitive acquisition and three offers were received. Fiscal 2020 operations and maintenance funds in the amount of $10,000,000 will be obligated via the first two task orders, which will be awarded immediately after the basic contract. Air Force Installation Contracting Command, Ramstein AB, Germany, is the contracting activity (FA5641-20-D-0009).

The Army & Air Force Exchange Service surprised 52 military families this week with news that their layaway balances had been paid in full by the nonprofit Pay Away the Layaway.  Families from Joint Base San Antonio-Lackland Air Force Base; Maxwell Air Force Base; and Forts Hood, Campbell, Bragg and Lewis were asked to join one of three Zoom calls held Oct. 13, 14 and 15. Told to expect a “special surprise,” they didn’t know their layaway balances—totaling $10,000 in back-to-school purchases—were going to be paid off until the call’s big reveal.  “With all the stress and uncertainty military families have experienced this year, we wanted to give these lucky military families something special,” said Air Force Chief Master Sgt. Kevin Osby, Exchange senior enlisted advisor. “It was truly heartwarming to see the faces of these hardworking and patriotic families when they received the news.”  The Department of Defense’s largest retailer, the Exchange has partnered with Pay Away the Layaway for four consecutive years to pay off military shoppers’ layaway plans.

ALA’s Commissary Council Chairman Sizemore: Collaboration ramping up between industry and DeCA.  ALA’s Larry Lapka reports that the COVID-19 pandemic has greatly impacted every sector in our society, and much like civilian grocers, Defense Commissary Agency (DeCA) stores have not been immune to this scourge, but the mission remains the same: to bring a top assortment of grocery items to all eligible shoppers in the military sector at the best prices.

Alex Sizemore, senior director of marketing, EURPAC Marketing Retail and Logistics Group and chairman, American Logistics Association (ALA) Commissary Council, noted that the council is steadfast in its focus on continuing to build the business and strengthen the benefit.  Working with DeCA and other agency partners, this goal will be met through teamwork and collaboration.

The ALA Commissary Council has a number of business-building initiatives with its DeCA partners. Briefly describe a few of these initiatives.

Alex Sizemore: One of the most exciting initiatives is the joint business planning sessions recently conducted with industry. The sessions allowed DeCA category managers to present their strategies and tactics within key categories for the next fiscal year. The sessions provided industry an opportunity to gain insight, engage in question/answer and understand the category manager’s “go-to-market” strategy.

As a result of the open dialogue, suppliers have an opportunity to reassess their brand plans based on key insights and feedback provided by the category mangers.

Other noteworthy action items to come out of the session are DeCA’s desire to take advantage of “deals of the week,” cross-merchandising opportunities, theme events, need to get innovation to the shelf, appropriate patron savings levels and optimizing their assortment. DeCA and industry will be tackling these together in order to aggressively drive sales.

Can you speak a little bit further about some of these things? Why are they needed, what the goals are?

Sizemore: The goal is, of course, to drive sales. And it is to engage the patron, not only the current patron, but also the patron who may not be visiting DeCA right now.

We understand there are active duty, retirees and disabled veterans not using the benefit. They may not fully recognize or realize the commissary offers them savings on groceries, and we are attempting to educate our community of shoppers on this vital point.

We are employing vehicles to assist us, such as media outlets like magazines or base web sites, VA hospitals or billboards, to raise awareness about the savings. Again, it’s all about creating mindshare with the patron.

We know there is a fair percentage of our customer base not fully realized; our efforts remain focused on how we attract those patrons into their respective commissary.

You’ve got to make visiting the commissary an experience! Patrons drive by many competitive retailers en-route to their commissary. We are challenged with generating excitement and making the commissary a true destination … social media and eCommerce will help with messaging and expanding our reach moving forward.

Because of COVID-19, there has been a big surge in the use of social media and eCommerce, because people aren’t getting out as much, so how do you engage in that, making the patrons aware of what is happening at the commissaries, making these stores a “must-stop shop” for them on their grocery list?

How do you do that in this type of environment? Some installations have been forced to limit access to various patrons, in particular older ones, who cannot even get on base due to different protocols. How do you spread the word about the value of the commissaries in this type of situation?

Sizemore: A number of bases have started to ease restrictions, especially in the CONUS area. Part of it is getting the information out, and posting it on the base web sites, letting customers know to go to the base web site to see what the access restrictions are on the base.

My father is a retired Marine, and he is not a big social media person. But if he is going to come down to Fort Lee, he needs to get to the web site to see what the restrictions are.

If there is a way to tapping into those base web sites, and putting information out about the commissary, that would be a way of getting them to know about it.

My dad is a big reader of the Navy Times and the Marine Corps Times, so how do we engage him, someone who is his age, who still reads those magazines, and as an industry, how do we tap into that type of media to communicate to him?

You have people on the younger end, people who are new to the military, and then on the other end, you have retirees and older people … do you tap into the same things? You do have older people who will go on the Internet, but there are others in this age group who probably have not been on the Internet in their entire life. But then you have younger people who have grown up with the Internet as part of their lives, and they are very in tune with the Internet and surfing the web. Are there different strategies to use for both ends of the spectrum, and on top of that, you have everyone in the middle …?

Sizemore: I think it is the same message, I just think it is different media that you have to engage in. I don’t think that the strategy is different, the strategy is always going to be about the commissaries being the place to save money, the commissaries are part of the base community.

It is more about how you get that message to the different generations. You have your 18 to 35-year old’s who are social media savvy, who have never known a time without social media and the Internet. They are the ones you can engage that way. Then you have the 40 to 76-year old’s, that is where my father falls in, who knew a time without social media and without the Internet who might still rely on some things, the newspaper …

My dad is not on social media at all, but he does get emails from the Navy Times or the Marine Corps Times, he reads those types of trade magazines on the computer, but he does not go to the social media sites.

It’s about taking the message, the same message, across all different platforms, and getting it out to them so that patrons can understand that “the commissaries present a value, here is why you should come to the commissary, and here are the savings being offered.”

Is there a message beyond the fact that the commissary should be their go-to place to get value and savings and to get what they want? Any shopper who goes to a supermarket or a commissary is looking for items that they want, and if they don’t find them there, they will go elsewhere. How do you get that across that the commissary is the place where they won’t be disappointed, that they will be able to find what they want?

Sizemore: That is one of the things that we talked about in the joint business planning. DeCA wants to be the first to market with innovation, so again, that is up to industry and the council and DeCA to put that information out there: “Here’s the latest new item, here’s what’s available.”

Again, it’s communicating using those different platforms to say, “This week, here’s what’s happening, here is what’s available, here’s your Halloween candy if you are looking for Halloween candy” … “Here is what we have available at the commissary,” or “Here is your holiday turkey, here is what is available.”

It’s about getting the word out to the consumer through those different platforms and having them know what is available in the commissary.

 We are coming up to a big time of year, with the holidays such as Thanksgiving and the end-of-the-year holidays, including Christmas. How are these initiatives going to be focused on those special periods?

Sizemore: Right now, DeCA is doing a contest for Halloween, where kids are being asked to submit their picture in their costume, and they are giving away a turkey at every store.

It’s about getting the information out to the patrons, it’s about having those in-store demos, talking about the products in the stores, having the big displays in the stores … you go to Fort Lee, and there is Halloween candy at the queuing line, so it’s about getting all that product out to stores in displays, showing that we have it, we are here for you and are ready to meet your needs for what you need for the holidays.

Looking at the remainder of calendar year 2020 into calendar year 2021, do you have any business-building programs or initiatives that you are looking to implement going forward that you could speak about?

I think one of the biggest initiatives that we’re getting ready to embark on, it is big with the council and with DeCA too, is “how do we engage the patron?”

We started another committee within the commissary council, and the whole purpose of that committee is to devise ways to engage the patron … how do we involve industry, the third-party media companies and DeCA, how do we get everybody involved to reach out and get that message across?

I think that, industry-wise, that is one of the biggest initiatives that we have … getting that message out to them so that we can get the patrons back into the building.

I think that the biggest opportunity is creating initiatives to engage the patron to see what the commissaries have to offer.

Have you had to kind of shift gears in mid-stream because of the coronavirus? It has had a tremendous impact on everything that we do, and it has had a tremendous impact on everything related to the commissaries and their partners and what the council does. Have you had to make any major shifts in focus or theme related to the pandemic?

Sizemore: I think the biggest focus across industry would be getting product to the commissaries. As the demand for product has outpaced supply, that has been the one big focus, where you really haven’t had an issue before. There had always been product availability, so it hasn’t been a big issue, but overall, it’s about meeting the demand that is out there.

The demand is still high. We are still having issues; suppliers are still having issues meeting the demand. And I don’t think it is going to end any time soon.

The entire focus of the council is spearheaded by teamwork between different factions of the industry, the agency, its various partners, the American Logistics Association, and others. Can you tell us how teamwork propels all of this going forward?

Sizemore: That is the critical part of it, that DeCA, the council and industry are working together to meet patrons’ needs. It is about teamwork. We can’t do it without DeCA and DeCA can’t do it without industry.

How can we supplement them, and how can they help us? It is teamwork, and that is propelled by collaboration. It is through having some open conversations and honest conversations on either the issues or the opportunities that we can bring to the plate.

How can all factions make the benefit stronger?

Sizemore: DeCA has been very collaborative over the past two-and-a-half years with the council. Industry and DeCA need to continue that collaboration and find ways to get past the hurdles.

Remember, we are here to serve the best patrons in the world, and that is what everyone has to keep in mind. The council needs to focus on finding solutions.

I tell people that one of the biggest things is that it is easy to complain and gripe; it’s harder to find the solutions and to work together.

Let’s not complain and gripe, let’s find the solutions together and work together.

It was always that patrons wanted the product, they wanted it when they wanted it, they wanted it to be there when they were looking for it, and if they didn’t find it, that is the biggest complaint. Why should they go to the commissary if they cannot find what they want? Have you heard from patrons at all? What do they say to you? What is on their mind?

Sizemore: Based on what my father has told me, he is concerned about the commissary remaining viable. That is one of the main things for him, that it stays viable, it’s a place where he can come and shop, and it is offering him the savings that he is used to.

I get a lot of cues and feedback from him. He is very vocal on a few things, when things aren’t working right or broken.

I would agree with the product being there when they want it. If you are a retiree or a disabled veteran, you are driving to come to the commissary, you are going to drive by other grocery stores, you are going to drive by Walmart, so you do not want them to get there and not have the product and they have wasted their time.

 So, it is critical, and it something that patrons will mention and complain about. If the product is not there, they will say they could have gone to the grocery store down the street.

Availability during the pandemic was spotty at times. The commissaries are like civilian supermarkets. They are doing as good as they can do to serve their patrons.

Sizemore: And that comes with collaboration from industry, that the commissary is a vital necessity for patrons, this is something that they count on.

That is why they call it the benefit.

 DeCA Commissary Leaders Recognized As ‘Top Women in Grocery’ by Progressive Grocer.  Two Defense Commissary Agency (DeCA) store leaders were recognized as “Top Women in Grocery” for 2020 by Progressive Grocer.Meralie Ervin, store director at MCB Quantico, Va., and Melquiadeth Supinger, assistant store director at Spangdahlem AB, Germany, were cited for excellence by the online and print magazine, which reports on grocery and supermarket industry news. DeCA’s winners were recognized in the June print issue of the magazine, as well as on progressivegrocer.com.  “I want to extend my congratulations to Meralie and Melquiadeth,” said DeCA Director/Chief Executive Officer (CEO) William Moore. “It’s quite a prestigious honor for them and for DeCA. It shows their hard work and achievements are noticed, appreciated and valued by their peers in the grocery business.”

NCTRF Begins Study of 3D Knitted Face Coverings.  The Navy Clothing and Textile Research Facility (NCTRF) announced the commencement of a study and evaluation of 3D-knitted face coverings.   NCTRF is a business line of the Navy Exchange Service Command (NEXCOM), whose parent command is the Naval Supply Systems Command (NAVSUP). As such, in March 2020, NAVSUP directed NCTRF to pivot their 3D-knitting research from flight deck jerseys to personal protective face coverings to prevent the spread of COVID-19.  “At the onset of COVID-19, when the Honorable James Geurts [assistant secretary of the Navy, (Research, Acquisition and Development)] asked to pull together ideas to respond to COVID-19 and support the defense industrial base, the Navy’s Small Business Innovative Research (SBIR)/Small Business Technology Transfer (STTR) team rose to the challenge,” said Brian Shipley, Commercialization program manager, Department of the Navy’s SBIR/STTR Program Office.   “This effort was quickly determined to be a way to pivot an existing SBIR Phase II project to support COVID-related efforts to assemble a solution using technology already in development in our SBIR Program,” Shipley explained.

 “The utilization of 3D-knitting technology has proven to provide a more streamlined and efficient approach to producing an item,” said Laura Winters, director of NCTRF. “Our continued work with small businesses and new technologies like 3D knitting will continue to move technology forward and greatly benefit our Navy’s warfighters.”   NEXCOM said that seamless 3D-knit technology enables rapid prototyping, short lead times and sustainable production of textile products.

 Using the standards of the N95 mask as a baseline, NCTRF developed the laboratory evaluation protocol for these non-medical face coverings. The yarns used to construct the 3D-knitted face coverings are evaluated for comfort and filtration efficiency and the designs are assessed for durability.

 A wear test was conducted over the summer, and included a broad range of participants within NAVSUP, NEXCOM and Naval Sea Systems Command (NAVSEA).

 Using data collected during the wear test of the initial prototypes, a second face covering prototype was developed with design and performance improvements.

 The wear test of the second prototype is scheduled to occur this fall, and the full evaluation of the second prototype is expected to conclude by the end of 2020. Anticipated commercialization is expected in 2021.

 “Assembling a team. and collaborating on solving a problem by identifying a technological solution, has served as a great example of our ‘Team of Teams’ approach to innovation at NAVSUP,” said Karl Larson, command science advisor and Innovation program manager, NAVSUP. 

 NEXCOM said that NCTRF will continue to pursue new technologies and present new solutions to meet the requirements of Sailors within variable Navy environments.

 Defense looking to ramp up its small business contracts for the Federal response to COVID.  Over recent months, the Defense Logistics Agency has awarded hundreds of millions of dollars in contracts for the federal response to the COVID pandemic, but that’s not necessarily benefitting the Defense Department’s usual vendors.   In fact, the Pentagon contracting arm is seeing fewer small businesses in its traditional supplier base competing for contracts in the wake of the coronavirus pandemic, the director of the DLA’s Office of Small Business Programs, Dwight Deneal, said Tuesday.  “Our percentages [of small business involvement] are as high as they’ve ever been over the past five years, but we are recognizing that the participation level from our supplier base’s standpoint has steadily declined,” Deneal said at a small business panel at the Association of the U.S. Army’s annual meeting, which was being conducted virtually.  “So [the DLA is] looking at the gaps in there and how do we strategically attack those areas where some of our suppliers are just not participating in or winning some DLA contracts,” Deneal said, adding that the agency plans to roll out a new virtual outreach effort next month to reengage its small suppliers.

Schedule for Day 2 of the ALA Annual Convention, October 22, 2020 

10:00 a.m. – 10:05 a.m.: Singer and songwriter John Woodall will perform his wonderful song Stand Tall—a call to America to stand with its military and first responder heroes.

10:05 a.m.-10:20 a.m.: Presentation of the ALA Lifetime Achievement Award to Ms. Joyce Raezer, former Executive Director, National Military Family Association by Michael Sleighter (ALA Chairman of the Board) and Stephen Rossetti (ALA President).  Ms. Raezer’s distinguished career advocating for military families will be recognized at this ceremony.  Remarks by Joyce Raezer. 

10:20 a.m. to 10:25 a.m.—Mr. Michael Sleighter (Advantage Sales Inc.) and ALA’s Chairman of the Board will discuss the agenda for the Association in 2021.  

 10:25 a.m.- 11:00 a.m.: Captain Jeffery Eldridge, Commander, Coast Guard Exchange, will discuss pandemic experience, and programs and agenda for the Exchange going forward.

11:15 a.m.11:20 a.m.: Presentation of the AlA’s Distinguished Service Award to Congressman Rob Wittman.  Congressman Wittman has served Virginia’s 1st District since 2007.  He is the Ranking Member of the Seapower and Projection Forces Subcommittee, House Armed Services Committee.  Congress Wittman has been a consistent supporter for a strong defense and for military quality of life programs including the commissary and exchange programs.  Most recently, he has promoted relief for military resale programs that have been stressed during the pandemic.   Congressman Wittman will receive ALA’s prestigious Distinguished Service Award and provide some remarks.

11:20 a.m.-12:00 p.m.: Susan Eisenhower.  Author and granddaughter of President Dwight “Ike” Eisenhower will talk about leadership principles and her new book “How Ike Led”. 

12:00 p.m. – 1:30 p.m.: Military resale agency collaboration and future merchandising and marketing efforts.  A panel of discussion of efforts resale agencies are taking to come together to improve operations and patron service.  The panel will include: Scott Poteet Director of Marketing, Coast Guard Exchange; Amy Kafner, Chief Merchandising Officer, Veterans Canteen Service; Rich Honiball, Executive Vice-President, Global Chief Merchandising and Marketing Officer; Jennifer Wible, Deputy Director, Business Operations Chief Operating Officer, Marine Corps Community Services; Ana Middleton, President, Chief Merchandising Officer, Army and Air Force Exchange Service; Chris Burns, Executive Director, Sales, Marketing and Logistics, Defense Commissary Agency. 

 1:30 p.m. – 2:00 p.m.: Mr. Marc Childs and Mr. Mark Baum, consumer products industry experts will discuss the outlook for the CPG industry and its effect on military resale programs.

 2:00 – 3:00 p.m.:  Gaining a larger share of wallet.  A panel discussion of marketing efforts by resale agencies and their media trading partners to reach patrons with the value proposition for military resale programs.  Sandi Lute, Vice-President, Marketing and Customer Engagement, Army and Air Force Exchange Service; Scott Poteet, Director of Marketing, Coast Guard Exchange; Sandi Bates; Chief Marketing Officer, Marine Corps Community Services; Marc Michaels, Military Media; Shane McCarthy, Sandboxx; Mark Igo, MyMilitarySavings.com; Moderated by Christine Roussey, IRI.   

3:00 p.m.-3:10 p.m.—Closing remarks by Mr. Marty Johnson, Chairman of the ALA’s Annual Conference and special performance by John Woodall singing “Home”.

Pentagon News/Military News

INDUSTRY NEWS 

Pandemic doesn’t scare off Spirit Halloween  


Full Story:
The New York Times (tiered subscription model) (10/12)   Seasonal retailer Spirit Halloween opened more than 1,400 locations around the US this year, with a mission to provide pandemic-weary consumers with an escape outlet, CEO Steven Silverstein said. The retailer, which generates about 90% of its sales between Labor Day and Halloween, is encouraging consumers to enjoy socially distanced activities including contactless trick-or-treating.
 

C-store Industry Fuel Sales Continue to Lag With COVID-19 Disrupting Commuting Patterns

NACS research finds that 61 percent of c-store retailers expect fuel sales to be down the remainder of the year.

 

RESALE NEWS:

Approval expected soon for DoD civilians to shop in military exchanges

Berry Patrick, who works in the DoD Office of Morale, Welfare and Recreation and Nonappropriated Fund Policy, during a virtual conference o…

Commissaries offer special pricing on specific products during October

Vietnam War-era air base terminal gets $25 million makeover in Tokyo

customs facility, distinguished visitor and business lounges, an Army and Air Force Exchange Service eatery, car rental counter, vending

Exchange Director/CEO Recognized For Supporting Military Readiness, Recruiting, Retention and Resiliency

DALLAS – Army & Air Force Exchange Service Director/CEO Tom Shull received the Department of Defense Distinguished Service Award …

Navy Exchange Service Command announces NEX holiday return policy

NORFOLK, Va. – Navy Exchange (NEX) customers can make post-holiday returns at any location worldwide through Jan. 23, 2021. This …

Mark your Calendar

Date                                               Event                                              More Information

. 20 and Oct. 22 ALA National (Virtual) Convention


Pending Coordination                 NEX-MCX Virtual Update                           TBD

Pending Coordination                  AAFES-Industry Virtual Work Shop’s         Consumables TBD

American Logistics Association

From the desk of the ALA President

“Congratulations to ALA on its 100th Anniversary from the Department of Defense.  Secretary Esper and I are aware of the services you provide…. Your partnership is critical and key to preserving our competitive advantage.”   “We are harnessing the skills of a generation of digital natives…which is exactly the kind of talent we need to attract; retain the people we recruit.”  Matthew Donovan, Under Secretary of Defense (Personnel and Readiness) at the opening day of the ALA Annual Convention. 

The Navy leadership walked the talk and came through in allocating funding to allow us to weather the storm.”   “Sustaining the military resale infrastructure during this pandemic with APF support is a small investment in an insurance policy that represents a worldwide network of ongoing quality of life services, always operating, we just turn up the dial in times of crisis—impossible to replicate this capability with commercial entities.” Rob Bianchi (RAdm-Ret.), NEXCOM CEO at ALA Annual Conference.

We’re leveraging brand equity and gaining more insight into how Marines Shop.”  Cindy Whitman Lacy, CEO/Director, Business and Support Services, HQ US Marine Corps.

“AAFES is working hard to improve cash and liquidity and provide a safe, secure and sanitized shopping environment.” AAFES CEO Tom Shull to the ALA Annual Convention

“We are very grateful to Secretary Wilke and the entire VA leadership in recognizing our difficulty and coming forward with support.”  Ray Tober, Executive Director, Veterans Canteen Service at the Annual ALA Conference. 

‘The goal is, of course, to drive sales. And it is to engage the patron, not only the current patron, but also the patron who may not be visiting DeCA right now.”  Alex Sizemore, senior director of marketing, EURPAC Marketing Retail and Logistics Group and Chairman, American Logistics Association (ALA) Commissary Council

ALA convention packed with information for resale industry and agency partners.  Major announcements are emanating from the ALA convention.  Yesterday, a line-up of top executives from described their major initiatives both during the pandemic and post-pandemic era.  The event featured presentations from: Rob Bianchi, NEXCOM; Cindy Whitman Lacy, MCCS; Tom Shull, AAFES; Bill Moore, DeCA, Ray Tober, Veterans Canteen Service; Berry Patrick, Office of the Secretary of Defense.   More detailed descriptions of the action of the Convention are forthcoming.  The schedule for the October 22 day of the convention appears at the end of this message.

Matthew Donovan, Under Secretary of Defense for Personnel and Readiness congratulated ALA on its 100th Anniversary and pledged collaboration with industry to advance military quality of life programs.  Secretary Donovan described:

  • Defense efforts to contend with COVID including enhanced infrastructure and backbones.
  • A tripling of the workload in his vast operation that includes health care, quality of life programs and military readiness programs.
  • Base access and force protection guidance.
  • Supporting the National “whole of government” response to the pandemic.
  • Ensuring installation commanders were provided the authority they needed to meet the pandemic including base access procedures and flexibility.
  • Designating military commissaries as “mission critical”.
  • ALA’s critical partnership with the DoD.
  • The importance of the exchange and commissary benefit in assisting Defense with the National Defense Strategy
  • Harnessing the skills of a generation of digital natives.
  • Efforts of the DOD to attract talent.
  • Looking at logistics and digital modernization in shoring up Defense supply chains
  • Working toward attaining digital dominance in DoD personnel and readiness programs.

Marine Corps Community Services at forefront of customer insights.  Cindy Whitman Lacy, CEO/Director, Business and Support Services, HQ US Marine Corps described pandemic measures taken by MCCS.  Proud of her workforce, she said that her folks “showed up and stepped up” to meet the pandemic.  She highlighted the Marine’s strategic priorities including: Mission First; Innovation and Modernization; and Sustainability.  The Marine organization is at the forefront of developing customer insights and Whitman Lacy noted the “further maturation of our model of fully aligning mission and Marine needs and business as a force multiplier leveraging partners and innovation.  She highlighted the results of their recent customer survey on COVID shopping behavior and continuing to strive to remove friction from Maines’ lives.  She described a unified experience with on-line ordering, in-store experience and friend and family contributions.

Other highlights of her presentation:

  •      58 percent increase in sales at micro-marts
  •       A drop of 13 percent in tobacco sales due to age minimum change
  •       Major increases in sales of electronics, sporting goods, gaming, alcohol.
  •       Major decreases in cosmetics and soft lines.
  •       40 percent of shoppers shopping earlier in season.
  •       Focusing on brand innovation
  •       Continued examination of the marine Corp base ecosystem and potential for growth incorporating eco-system planning into assessments for master planning
  •       Deployment of micro-marts to barracks, fitness centers and maintenance facilities
  •       Innovation pipeline is rolling out and becoming operational, morphing from vision to commercialization.

Landmark COVID rapid reaction by NEXCOM.  Way early in the pandemic, NEX moved to establish a Crisis Action Team.  The team leveraged vendor relationships and joint buying, sourced PPE and increased the quantity and quality of shipment frequency of critical items.  Bianchi said ALA can help by keeping inventory in stock; ensuring NEX is prioritized for limited inventory; strengthen value of offerings; promote our events, support our patrons, and be more innovative.  Post COVID present a lot of pent-up opportunity.

Other highlights of Bianchi’s presentation to the Convention:

  •        Didn’t have a choice—commanders said we had to stay open.  Immediately responded to fleet pandemic-related demand signals.
  •        Agility of being a NAF activity enabled NEX to get out in front of DLA and other appropriated fund entities in responding.
  •        Supported deployment of the hospital Ships Comfort and Mercy
  •        Rushed aid to quarantined sailors
  •      Reduced inventory 14 percent.
  •        Supplied 558 face coverings to the Fleet
  •        Leveraged NEXCOM’s communications programs to amplify pandemic safety messaging.
  •        Received $80 million in CARES I money from Navy and OSD.  MWR received another $200 million.
  •        Task force looming at 2021 and needs for comfort, safety, capacity and convenience.
  •        Added deployment of WIFI in customer facing operations.
  •        65.7 percent increase in web retail sales
  •        Delivered 98 percent of e-commerce packages on time.
  •        Challenged by closures and apparel sales drops.       NEX scores 4.5 out of 5 on store safety
  •        Drive private brands and eliminate brands that offer less value
  •        Enhance CRM
  •        June to September sales up 1.2 percent
  •        Launch of Better Together campaign with MCX
  •        Striving toward relevance post COVID
  •        Stabilizing margin.
  •        Providing “value and Exclusivity” brand strategy
  •        Continue to several collaboration and cooperation among military resale partners.

AAFES strategic overview and pandemic response.  Tom Shull, AAFES CEO descried the AAFES three-year strategy and Herculean efforts on the part of his team to cope with the pandemic from an operational and financial view.   Shull said that AAFES is working hard to improve cash and liquidity and provide a safe, secure and sanitized shopping environment.  He noted that pandemic impact will affect dividends to MWR programs and doesn’t expect full-strength return to dividends until FY 2022 at the earliest and “more likely 2023 or 2024”.  He commended the Navy leadership for coming forward with pandemic relief funding for NEXCOM and said that AAFES is awaiting and looking forward to help but has to plan to meet all scenarios.  Shull noted an AAFES point of sale program has resulted in nearly $1.5 million in donations to Army Emergency Relief.

Other highlights of CEO Shull’s presentation:

  •        Continue to press vendors for products.  AAFES FY 2020—conserve cash, stabilize the workforce, build and preserve access to debt markets.  Driving to $287 to $687 million increase in liquidity.
  •      Focusing on CAPEX and emerging customer service requirements in 2021
  •       Forecasting $116 million decline in Q1 sales-       Restore earnings performance in FY 2022 and return to full dividend levels in 2-3 years
  •        24,000 personal shopping visits for quarantined troops
  •       Vaccine support offered by AAFES to Operation Warp Speed (National vaccine response)
  •        AAFES has a strong balance sheet
  •        A shortage of five million of computers to meet customer demand
  •        Looking forward to DoD civilian exchange benefit in November
  •       E-com up 88 percent
  •        Manufacturer breadth of assortment dramatically culled as they focus supply on demand and managing to financial constraints
  •        Computers, TVs and sporting goods all showing major gains
  •        224,000 of COVID related associate leave
  •       Deploying mobile field exchanges for pandemic relief
  •       The Veteran on-line shopping benefit has had 178,000 shoppers with 741,000 orders and nearly $13 million in sales tax savings

DeCA collaboration with industry amplified by new DeCA Director Bill Moore.   “My goal is to ensure that every eligible patron enjoys the benefit,” said Bill Moore, Defense logistics expert and now Director of the Defense Commissary Agency at the ALA Annual Convention.  Moore said that he is working to ramp up curbside service with possible innovative interim solutions to jump-start the effort.  He noticed an uptick in sales in the past year but is interested in what it looks like “when you take COVID out of the equation.”  Moore also highlighted his commitment to reinvigorate the collaborative partnership with the resale industry and accelerate the deployment of the Agency’s business systems.  Moore presented a contrast of the commissary benefit versus business attributes and their ability to straddle both sides of that equation.  He implored industry to come forward with increased commodities and recognize the difficult and extended supply chain for troops and families in remote and overseas areas.

Other highlights of Director Moore’s presentation:

  • 214 COVID cases reported, 194 recovered, and 19 actives
  • DeCA designated as mission essential during the pandemic
  • HPCON levels impacting sales
  • DAV and retiree shoppers had limited or no access to the benefit
  • Supply channels stressed and higher than normal out of stocks
  • Concerned about eligible patrons not enjoying the benefit
  • IT modernization to slow
  • EBS roll-out underway:
  • Vendor portal planned for 2022
  • Fast lane and mobile shopper in 2021
  • RTI signage and labels in 2020

Authority for civilians to use exchanges under active review in DoD.  Berry Patrick, an official in Secretary Donovan’s operation announced that Defense Department civilian employees may be able to use exchanges under a policy change working its way through the final approval process and being considered by the Department of Defense. If approved, it is expected to add 575,000 new eligible customers.  Berry Patrick works in the DoD Office of Morale, Welfare and Recreation and Nonappropriated Fund Policy and announced the move at the ALA convention.  There are about 796,000 DoD civilians in the U.S., but about 221,000 of those employees already have exchange benefits resulting from another beneficiary category such as retiree or military spouse, he said. The new benefit would apply to both appropriated fund and nonappropriated fund employees, he said.

Employees would use their Common Access Card to shop.  Patrick said officials believe the benefit will be used more by the civilian employees than by disabled veterans, who were granted commissary, exchange and some MWR benefits as of Jan. 1, 2020. The usage by that population has been less than expected, he said, largely because of the pandemic which has forced restrictions on access to many installations. In addition, many of the 4.2 million newly eligible disabled veterans don’t live near an installation, according to an article in the Military Times.  DoD civilians are on the base every day, he noted. Based on projections of buying patterns, he said, they estimate exchange sales could increase by about $287 million a year, with a potential increase of $48 million in profits going back to support the services’ MWR programs. DoD has been deliberating the policy change for about three years.

One indicator of the popularity of the benefit among DoD employees was the situation in March, when DoD gave base commanders temporary authority to give commissary and exchange privileges to DoD civilians and contractor employees considered mission critical. Many people misinterpreted that to mean that every DoD mission-critical civilian employee automatically got those privileges, and DoD officials were getting phone calls from those potential customers, he said. But it was up to each installation, and some commanders gave the privileges while others didn’t, for various reasons such as concern about the strains on the supply chain’s ability to provide enough products for the stores.

Patrick said as the new benefit rolled out in January to disabled veterans, caregivers and others authorized by law, everything was in place within the resale community, MWR and for installation access. A post-implementation assessment showed there was no negative impact on the facilities, he said.

But COVID came along, resulting in impacts from a variety of reasons, to include some installations limiting access to their installations. Those issues have ebbed and flowed, he said. Currently only about 200,000 in this population of 4.2 million are using their benefits, and exchanges and commissaries have the capacity to take on larger numbers, Patrick said.

Through Sept. 30, commissaries logged about 503,000 transactions from the newly eligible population, and the exchanges estimated about 1.2 million combined transactions over that time period, he said.

He asked for industry’s help in continuing to promote the benefit to the newly eligible population. “We have a long way to go to get from 200,000 to the 4.2 million” extra disabled veterans and others who can use the benefits now, he said.

Other OSD announcements by Mr. Patrick: 

  •        Authorized MWR access on base to emergency workers
  •           Making American Forces Travel available to Veterans
  •          Working to implement the change to the tobacco law
  •         Ramping up efforts and working with ALA to promote the expanded commissary and exchange benefit for disabled veterans
  •         Removing impediments to fast-tracking NAF IT expenditures by having a separate official to work NAF IT issues
  •         Continuing to limit beverage alcohol sales in commissaries to beer and wine and not distilled spirits due to shelf space considerations
  •         Moving to an all-NAF model for lodging

VCS aid, innovative pandemic workarounds. Ray Tober, Executive Director of the Veterans Canteen Service described the tremendous difficulty faced by the pandemic and announced that they are beginning to see the beginnings pandemic relief appropriations coming to support the VCS and head off what would have been the only furloughs in Government due to the pandemic.   Mr. Tober described the work-around that VCS has been accomplishing to keep operations running and changes to the product assortment in the VCS stores to make operations more pandemic-relevant.

Active ALA 2021 agenda.  ALA’s President Steve Rossetti presented an active agenda for the coming year and a multitude of challenges and opportunities for the resale system.  ALA has 100 years of public service and 2021 is going to be no exception.  During the ALA Annual Conference, Rossetti said that ALA is mobilizing for 2021 with some 12 conferences in the works including DeCA, AAFES, Marine Corps, and NEXCOM.  He also announced pop-up sessions dealing with specific policy issues.   In a far-reaching discussion of the pandemic, Rossetti said that distributors were incurring heavy pandemic costs and that ALA was working to gain funding relief.  Rossetti also cited the extraordinary efforts of the exchanges and DeCA in confronting the pandemic, including active participation with the DoD industrial policy group on a wide range of issues including protective gear, contracting relief, and PPP, vaccine distribution, and contracting and payment issues.  He described the state of play for major legislation passing through the Congress including the Continuing Resolution, pandemic stimulus bills, the NDAA, and appropriations bills.

Other areas of emphasis were ensuring that all of the exchanges received their fair and equitable share of pandemic relief funding and explained the legislative process for making this funding available.  He cited major costs to resale programs because of strategic restationing of forces that are amounting to over $100 million in construction costs and called for reimbursement of resale entities because these projects were commissary surcharge and nonappropriated funded.  Rossetti reviewed the state of play on legislation moving through the Congress and regulations being considered by the Administration that will affect resale programs including Uyghur forced labor report and sanction, food labeling, diversity training, Section 889 implementation, and the Cybersecurity Maturity Model Certification compliance requirements.

Rossetti warned of continued pressure to reduce commissary appropriations and the need for continued vigilance.  He also cited the consolidation efforts and the need for continued validation of the cost savings and expense associated with this effort.

He pointed to language in the defense bills encouraging DoD to keep commissaries open and the inclusion of funding mechanisms to bridge the commissary funding gap between any Government closure to ensure the stores stay open.

Rossetti cited the ALA membership for their active involvement including the outgoing Chairman Bill Doyle (EURPAC) and he incoming Chairman Michael Sleighter (Advantage Sales) along with the dedication and hard work of the ALA Commissary and Exchange Councils.

Congressman Rob Wittman to be recognized by ALA with the Distinguished Service Award on Day 2 of the ALA’s Annual Convention. In prepared remarks, Steve Rosetti, President of the ALA will say:“Congressman Wittman has served Virginia’s 1st District since 2007.  He is the Ranking Member of the Sea power and Projection Forces Subcommittee, House Armed Services Committee.  As the ranking Republican on the subcommittee, Congressman Wittman works tirelessly to support a defense and the vital role that our forces play in protecting our commerce sea lanes and projecting U.S. military power in the defense of Freedom.   The Tidewater region includes a vast military Seapower presence and shipbuilding  industry.  Congressman Wittman recognizes this contribution and provides a steady and strong voice in representing United States Maritime interests in the United States Congress. 

 Congressman Wittman has been a consistent supporter for a strong defense and for military quality of life programs including the commissary and exchange programs.  Virginia is the center of gravity and a powerful commerce engine for military resale programs with four of the six resale headquarters located in the state and hundreds of companies serving military resale with their thousands of employees and hundreds of millions of dollars in commerce.  He has led the way in preserving these benefits and in creating and preserving jobs in his district, in Virginia and in the Nation.   Virginia is the chief transit point for moving products and services to commissaries and exchanges on the East Coast and to far flung areas of Europe and the Middle East.  Most recently, he has promoted hundreds of millions of dollars in relief for military resale programs that have been stressed during the pandemic.  I quote from a letter he sent to the Secretary of Defense in May of this year:  

“…as nonappropriated fund instrumentalities of the United States government, these operations are not able to take advantage of the aid programs made available to American businesses by the Congress, Treasury or Federal Reserve.  We can’t afford to have these programs fall through the cracks due to their unique nature and status.  

The exchanges are facing extraordinary costs for personal protective gear and added costs for operating safely in the pandemic.  Further, the exchanges face major re-opening costs when the pandemic subsides, and these costs will further exacerbate an already disastrous financial condition.  

The list is long, and the effects are cascading across the supply chain that supports the exchanges as vendors face curtailment of orders, backed-up inventories, and severe business interruption.   Already there are reports that the exchanges are seeking extended forbearance terms from suppliers to aid the exchanges in their cash flow.  These businesses that support the exchanges should be given the same financial consideration as businesses in the Department of Defense that supply weapons systems and other essential defense needs.”

 “funding should be made available to compensate these suppliers in order to help them weather the pandemic and continue to get vital food products to military bases.  We urge the Department of Defense to make available the funding from resources made available from Congress to the Department to provide a mechanism for needed financial infusion to these programs in order to optimize this critical supply channel.”

 Congressman Wittman led the way on including language in the Defense Bill to provide a path for keeping commissaries open during budget impasse-driven government shutdowns.   He has always been there for this system and for our military people. “

Defense guidance is expected on President’s Executive Order on diversity training.  DoD officials say that they are working on guidance to implement a recent Presidential Executive Order on diversity training.  The officials say the guidance will describe how Government contractors must comply.  Stay tuned.

What’s going on here?  In April, the Food Industry Association and the International Foodservice Distributors Association (IFDA) formed an ad-hoc partnership in response to rising shopper needs amid the coronavirus pandemic. The program connects foodservice distributors that have excess capacity in the areas of products, transportation services and warehousing services with food retailers and wholesalers in need of additional resources to meet grocery stores’ surging demand.  Last week, Longtime Target supply chain executive Bill Hancock has joined US Foods Holdings Corp. as EVP and chief supply chain officer to help the foodservice distributor execute its “Great Food. Made Easy,” strategy.  Hancock joins the $26 billion company at a time when its core foodservice customers have been hit hard by the pandemic and ceded market share to food retailers. Hancock will oversee all warehousing, transportation, supply chain strategy and operations, safety, labor relations and continuous improvement at US Foods and report to chairman and CEO Pietro Satriano.

In April, US Foods paid $970 million to acquire 70 small format cash and carry stores that Smart & Final operated under the banner of Smart Foodservice Warehouse. The stores, located in California, Washington, Oregon, Idaho, Nevada, Utah and Montana, serve small and mid-sized restaurants and other food business customers and offer about 8,000 items.  More recently, US Foods launched US Foods Ghost Kitchens to help its customers establish and operate facilities dedicated to off-premise dining. A recent National Restaurant Association survey found that 75% of restaurant operators consider off-premise dining their best growth opportunity.  “The Ghost Kitchens program was developed in response to growing interest among our customers, but we’ve also been tracking the trend, and ghost kitchens are projected to reach a $1 trillion global market by 2030, making them an attractive concept for operators even after dine-in restrictions are lifted,” Jim Osborne, US Foods SVP of customer strategy and innovation said when the program was launched in August.  The moves could help US Foods rebound from the devastating effects COVID-19 has had on the foodservice industry. Those effects were evident when the company reported second quarter results which saw sales decline 29.2% to $4.6 billion.

As military resale programs look to more curbside and BOPIS options, the commercial grocery industry has added a new twist to customer pickup.  Albertsons Cos. is adding PickUp lockers to its e-commerce arsenal in select Chicago Jewel-Osco and Bay Area Safeway stores.  The Boise, Idaho-based company is testing lockers as the newest easy fulfillment option for e-commerce shoppers. Albertsons already offers in-house Delivery and Drive Up & Go options through its websites and apps and has partnerships with third-party operators to provide fast delivery options.  Albertsons, reported a 276% increase in digital sales in its first fiscal quarter and continues to add Drive Up & Go stores throughout the country, said that it’s looking at all of the ways that it can make customers’ lives – and their grocery shopping – easier.  “Contactless PickUp through our state-of-the-art, temperature-controlled lockers makes it even easier to shop with us,” said Chris Rupp, EVP and chief customer and digital officer. “Whether customers choose to shop in our familiar neighborhood stores or through our websites and apps, we are ready to provide them with extraordinary service where and how they want to get their groceries. Our strategy to leverage technology and innovation to continue to grow our digital business is focused on creating products customers love that truly make their lives easier.”  Delivered by Bell and Howell, the lockers are modular, temperature-controlled, and suitable for both indoor and outdoor environments. Individual columns in the modular setup can be adjusted dynamically to ensure specific temperatures required to meet the wide needs of a variety of customers’ online orders are maintained.

Said Larry Blue, CEO of Wheeling, Illinois-based Bell and Howell. “With our temperature-controlled grocery lockers, Albertsons Cos. customers can quickly and conveniently pick up their entire order, from heated to frozen food items, whenever and wherever they want.”

The lockers will first be available in select Jewel-Osco locations in Chicago and are expected to be installed at select Safeway locations in the Bay Area later in the year. Customers who live in neighborhoods with stores that feature the lockers will notice a new “PickUp” option when they shop on the store’s website or app.

Customers who select the PickUp option will be asked to select a time window to pick up their groceries. Once customers complete their purchase, they receive a unique code that they will use to quickly pick up their order from the self-serve lockers.  Albertsons operates 2,252 retail stores with 1,726 pharmacies, 402 associated fuel centers, 23 dedicated distribution centers and 20 manufacturing facilities. The company’s stores predominantly operate under the banners Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw’s, Star Market, United Supermarkets, Market Street and Haggen.

Kellogg Brown & Root Services Inc., Houston, Texas, has been awarded a ceiling $974,000,000 indefinite-delivery/indefinite-quantity contract for U.S. Air Forces in Europe – Air Forces Africa (USAFE-AFAFRICA) base operating support. This contract provides day-to-day base operations and maintenance services throughout locations within USAFE-AFAFRICA. Work will be performed at Morón Air Base (AB), Spain; Incirlik AB, Turkey; Izmir Air Station, Turkey; Office of Defense Cooperation-Turkey; and Ankara Support Facility, Turkey, and is expected to be completed by Aug. 27, 2028. This award is the result of a competitive acquisition and three offers were received. Fiscal 2020 operations and maintenance funds in the amount of $10,000,000 will be obligated via the first two task orders, which will be awarded immediately after the basic contract. Air Force Installation Contracting Command, Ramstein AB, Germany, is the contracting activity (FA5641-20-D-0009).

The Army & Air Force Exchange Service surprised 52 military families this week with news that their layaway balances had been paid in full by the nonprofit Pay Away the Layaway.  Families from Joint Base San Antonio-Lackland Air Force Base; Maxwell Air Force Base; and Forts Hood, Campbell, Bragg and Lewis were asked to join one of three Zoom calls held Oct. 13, 14 and 15. Told to expect a “special surprise,” they didn’t know their layaway balances—totaling $10,000 in back-to-school purchases—were going to be paid off until the call’s big reveal.  “With all the stress and uncertainty military families have experienced this year, we wanted to give these lucky military families something special,” said Air Force Chief Master Sgt. Kevin Osby, Exchange senior enlisted advisor. “It was truly heartwarming to see the faces of these hardworking and patriotic families when they received the news.”  The Department of Defense’s largest retailer, the Exchange has partnered with Pay Away the Layaway for four consecutive years to pay off military shoppers’ layaway plans.

ALA’s Commissary Council Chairman Sizemore: Collaboration ramping up between industry and DeCA.  ALA’s Larry Lapka reports that the COVID-19 pandemic has greatly impacted every sector in our society, and much like civilian grocers, Defense Commissary Agency (DeCA) stores have not been immune to this scourge, but the mission remains the same: to bring a top assortment of grocery items to all eligible shoppers in the military sector at the best prices.

Alex Sizemore, senior director of marketing, EURPAC Marketing Retail and Logistics Group and chairman, American Logistics Association (ALA) Commissary Council, noted that the council is steadfast in its focus on continuing to build the business and strengthen the benefit.  Working with DeCA and other agency partners, this goal will be met through teamwork and collaboration.

The ALA Commissary Council has a number of business-building initiatives with its DeCA partners. Briefly describe a few of these initiatives.

Alex Sizemore: One of the most exciting initiatives is the joint business planning sessions recently conducted with industry. The sessions allowed DeCA category managers to present their strategies and tactics within key categories for the next fiscal year. The sessions provided industry an opportunity to gain insight, engage in question/answer and understand the category manager’s “go-to-market” strategy.

As a result of the open dialogue, suppliers have an opportunity to reassess their brand plans based on key insights and feedback provided by the category mangers.

Other noteworthy action items to come out of the session are DeCA’s desire to take advantage of “deals of the week,” cross-merchandising opportunities, theme events, need to get innovation to the shelf, appropriate patron savings levels and optimizing their assortment. DeCA and industry will be tackling these together in order to aggressively drive sales.

Can you speak a little bit further about some of these things? Why are they needed, what the goals are?

Sizemore: The goal is, of course, to drive sales. And it is to engage the patron, not only the current patron, but also the patron who may not be visiting DeCA right now.

We understand there are active duty, retirees and disabled veterans not using the benefit. They may not fully recognize or realize the commissary offers them savings on groceries, and we are attempting to educate our community of shoppers on this vital point.

We are employing vehicles to assist us, such as media outlets like magazines or base web sites, VA hospitals or billboards, to raise awareness about the savings. Again, it’s all about creating mindshare with the patron.

We know there is a fair percentage of our customer base not fully realized; our efforts remain focused on how we attract those patrons into their respective commissary.

You’ve got to make visiting the commissary an experience! Patrons drive by many competitive retailers en-route to their commissary. We are challenged with generating excitement and making the commissary a true destination … social media and eCommerce will help with messaging and expanding our reach moving forward.

Because of COVID-19, there has been a big surge in the use of social media and eCommerce, because people aren’t getting out as much, so how do you engage in that, making the patrons aware of what is happening at the commissaries, making these stores a “must-stop shop” for them on their grocery list?

How do you do that in this type of environment? Some installations have been forced to limit access to various patrons, in particular older ones, who cannot even get on base due to different protocols. How do you spread the word about the value of the commissaries in this type of situation?

Sizemore: A number of bases have started to ease restrictions, especially in the CONUS area. Part of it is getting the information out, and posting it on the base web sites, letting customers know to go to the base web site to see what the access restrictions are on the base.

My father is a retired Marine, and he is not a big social media person. But if he is going to come down to Fort Lee, he needs to get to the web site to see what the restrictions are.

If there is a way to tapping into those base web sites, and putting information out about the commissary, that would be a way of getting them to know about it.

My dad is a big reader of the Navy Times and the Marine Corps Times, so how do we engage him, someone who is his age, who still reads those magazines, and as an industry, how do we tap into that type of media to communicate to him?

You have people on the younger end, people who are new to the military, and then on the other end, you have retirees and older people … do you tap into the same things? You do have older people who will go on the Internet, but there are others in this age group who probably have not been on the Internet in their entire life. But then you have younger people who have grown up with the Internet as part of their lives, and they are very in tune with the Internet and surfing the web. Are there different strategies to use for both ends of the spectrum, and on top of that, you have everyone in the middle …?

Sizemore: I think it is the same message, I just think it is different media that you have to engage in. I don’t think that the strategy is different, the strategy is always going to be about the commissaries being the place to save money, the commissaries are part of the base community.

It is more about how you get that message to the different generations. You have your 18 to 35-year old’s who are social media savvy, who have never known a time without social media and the Internet. They are the ones you can engage that way. Then you have the 40 to 76-year old’s, that is where my father falls in, who knew a time without social media and without the Internet who might still rely on some things, the newspaper …

My dad is not on social media at all, but he does get emails from the Navy Times or the Marine Corps Times, he reads those types of trade magazines on the computer, but he does not go to the social media sites.

It’s about taking the message, the same message, across all different platforms, and getting it out to them so that patrons can understand that “the commissaries present a value, here is why you should come to the commissary, and here are the savings being offered.”

Is there a message beyond the fact that the commissary should be their go-to place to get value and savings and to get what they want? Any shopper who goes to a supermarket or a commissary is looking for items that they want, and if they don’t find them there, they will go elsewhere. How do you get that across that the commissary is the place where they won’t be disappointed, that they will be able to find what they want?

Sizemore: That is one of the things that we talked about in the joint business planning. DeCA wants to be the first to market with innovation, so again, that is up to industry and the council and DeCA to put that information out there: “Here’s the latest new item, here’s what’s available.”

Again, it’s communicating using those different platforms to say, “This week, here’s what’s happening, here is what’s available, here’s your Halloween candy if you are looking for Halloween candy” … “Here is what we have available at the commissary,” or “Here is your holiday turkey, here is what is available.”

It’s about getting the word out to the consumer through those different platforms and having them know what is available in the commissary.

We are coming up to a big time of year, with the holidays such as Thanksgiving and the end-of-the-year holidays, including Christmas. How are these initiatives going to be focused on those special periods?

Sizemore: Right now, DeCA is doing a contest for Halloween, where kids are being asked to submit their picture in their costume, and they are giving away a turkey at every store.

It’s about getting the information out to the patrons, it’s about having those in-store demos, talking about the products in the stores, having the big displays in the stores … you go to Fort Lee, and there is Halloween candy at the queuing line, so it’s about getting all that product out to stores in displays, showing that we have it, we are here for you and are ready to meet your needs for what you need for the holidays.

Looking at the remainder of calendar year 2020 into calendar year 2021, do you have any business-building programs or initiatives that you are looking to implement going forward that you could speak about?

I think one of the biggest initiatives that we’re getting ready to embark on, it is big with the council and with DeCA too, is “how do we engage the patron?”

We started another committee within the commissary council, and the whole purpose of that committee is to devise ways to engage the patron … how do we involve industry, the third-party media companies and DeCA, how do we get everybody involved to reach out and get that message across?

I think that, industry-wise, that is one of the biggest initiatives that we have … getting that message out to them so that we can get the patrons back into the building.

I think that the biggest opportunity is creating initiatives to engage the patron to see what the commissaries have to offer.

Have you had to kind of shift gears in mid-stream because of the coronavirus? It has had a tremendous impact on everything that we do, and it has had a tremendous impact on everything related to the commissaries and their partners and what the council does. Have you had to make any major shifts in focus or theme related to the pandemic?

Sizemore: I think the biggest focus across industry would be getting product to the commissaries. As the demand for product has outpaced supply, that has been the one big focus, where you really haven’t had an issue before. There had always been product availability, so it hasn’t been a big issue, but overall, it’s about meeting the demand that is out there.

The demand is still high. We are still having issues; suppliers are still having issues meeting the demand. And I don’t think it is going to end any time soon.

The entire focus of the council is spearheaded by teamwork between different factions of the industry, the agency, its various partners, the American Logistics Association, and others. Can you tell us how teamwork propels all of this going forward?

Sizemore: That is the critical part of it, that DeCA, the council and industry are working together to meet patrons’ needs. It is about teamwork. We can’t do it without DeCA and DeCA can’t do it without industry.

How can we supplement them, and how can they help us? It is teamwork, and that is propelled by collaboration. It is through having some open conversations and honest conversations on either the issues or the opportunities that we can bring to the plate.

How can all factions make the benefit stronger?

Sizemore: DeCA has been very collaborative over the past two-and-a-half years with the council. Industry and DeCA need to continue that collaboration and find ways to get past the hurdles.

Remember, we are here to serve the best patrons in the world, and that is what everyone has to keep in mind. The council needs to focus on finding solutions.

I tell people that one of the biggest things is that it is easy to complain and gripe; it’s harder to find the solutions and to work together.

Let’s not complain and gripe, let’s find the solutions together and work together.

It was always that patrons wanted the product, they wanted it when they wanted it, they wanted it to be there when they were looking for it, and if they didn’t find it, that is the biggest complaint. Why should they go to the commissary if they cannot find what they want? Have you heard from patrons at all? What do they say to you? What is on their mind?

Sizemore: Based on what my father has told me, he is concerned about the commissary remaining viable. That is one of the main things for him, that it stays viable, it’s a place where he can come and shop, and it is offering him the savings that he is used to.

I get a lot of cues and feedback from him. He is very vocal on a few things, when things aren’t working right or broken.

I would agree with the product being there when they want it. If you are a retiree or a disabled veteran, you are driving to come to the commissary, you are going to drive by other grocery stores, you are going to drive by Walmart, so you do not want them to get there and not have the product and they have wasted their time.

So, it is critical, and it something that patrons will mention and complain about. If the product is not there, they will say they could have gone to the grocery store down the street.

Availability during the pandemic was spotty at times. The commissaries are like civilian supermarkets. They are doing as good as they can do to serve their patrons.

Sizemore: And that comes with collaboration from industry, that the commissary is a vital necessity for patrons, this is something that they count on.

That is why they call it the benefit.

DeCA Commissary Leaders Recognized As ‘Top Women in Grocery’ by Progressive Grocer.  Two Defense Commissary Agency (DeCA) store leaders were recognized as “Top Women in Grocery” for 2020 by Progressive Grocer.Meralie Ervin, store director at MCB Quantico, Va., and Melquiadeth Supinger, assistant store director at Spangdahlem AB, Germany, were cited for excellence by the online and print magazine, which reports on grocery and supermarket industry news. DeCA’s winners were recognized in the June print issue of the magazine, as well as on progressivegrocer.com.  “I want to extend my congratulations to Meralie and Melquiadeth,” said DeCA Director/Chief Executive Officer (CEO) William Moore. “It’s quite a prestigious honor for them and for DeCA. It shows their hard work and achievements are noticed, appreciated and valued by their peers in the grocery business.”

NCTRF Begins Study of 3D Knitted Face Coverings.  The Navy Clothing and Textile Research Facility (NCTRF) announced the commencement of a study and evaluation of 3D-knitted face coverings.   NCTRF is a business line of the Navy Exchange Service Command (NEXCOM), whose parent command is the Naval Supply Systems Command (NAVSUP). As such, in March 2020, NAVSUP directed NCTRF to pivot their 3D-knitting research from flight deck jerseys to personal protective face coverings to prevent the spread of COVID-19.  “At the onset of COVID-19, when the Honorable James Geurts [assistant secretary of the Navy, (Research, Acquisition and Development)] asked to pull together ideas to respond to COVID-19 and support the defense industrial base, the Navy’s Small Business Innovative Research (SBIR)/Small Business Technology Transfer (STTR) team rose to the challenge,” said Brian Shipley, Commercialization program manager, Department of the Navy’s SBIR/STTR Program Office.   “This effort was quickly determined to be a way to pivot an existing SBIR Phase II project to support COVID-related efforts to assemble a solution using technology already in development in our SBIR Program,” Shipley explained.

“The utilization of 3D-knitting technology has proven to provide a more streamlined and efficient approach to producing an item,” said Laura Winters, director of NCTRF. “Our continued work with small businesses and new technologies like 3D knitting will continue to move technology forward and greatly benefit our Navy’s warfighters.”   NEXCOM said that seamless 3D-knit technology enables rapid prototyping, short lead times and sustainable production of textile products.

Using the standards of the N95 mask as a baseline, NCTRF developed the laboratory evaluation protocol for these non-medical face coverings. The yarns used to construct the 3D-knitted face coverings are evaluated for comfort and filtration efficiency and the designs are assessed for durability.

A wear test was conducted over the summer, and included a broad range of participants within NAVSUP, NEXCOM and Naval Sea Systems Command (NAVSEA).

Using data collected during the wear test of the initial prototypes, a second face covering prototype was developed with design and performance improvements.

The wear test of the second prototype is scheduled to occur this fall, and the full evaluation of the second prototype is expected to conclude by the end of 2020. Anticipated commercialization is expected in 2021.

“Assembling a team. and collaborating on solving a problem by identifying a technological solution, has served as a great example of our ‘Team of Teams’ approach to innovation at NAVSUP,” said Karl Larson, command science advisor and Innovation program manager, NAVSUP.

NEXCOM said that NCTRF will continue to pursue new technologies and present new solutions to meet the requirements of Sailors within variable Navy environments.

Defense looking to ramp up its small business contracts for the Federal response to COVID.  Over recent months, the Defense Logistics Agency has awarded hundreds of millions of dollars in contracts for the federal response to the COVID pandemic, but that’s not necessarily benefitting the Defense Department’s usual vendors.   In fact, the Pentagon contracting arm is seeing fewer small businesses in its traditional supplier base competing for contracts in the wake of the coronavirus pandemic, the director of the DLA’s Office of Small Business Programs, Dwight Deneal, said Tuesday.  “Our percentages [of small business involvement] are as high as they’ve ever been over the past five years, but we are recognizing that the participation level from our supplier base’s standpoint has steadily declined,” Deneal said at a small business panel at the Association of the U.S. Army’s annual meeting, which was being conducted virtually.  “So [the DLA is] looking at the gaps in there and how do we strategically attack those areas where some of our suppliers are just not participating in or winning some DLA contracts,” Deneal said, adding that the agency plans to roll out a new virtual outreach effort next month to reengage its small suppliers.

 

Schedule for Day 2 of the ALA Annual Convention, October 22, 2020 

10:00 a.m. – 10:05 a.m.: Singer and songwriter John Woodall will perform his wonderful song Stand Tall—a call to America to stand with its military and first responder heroes.

10:05 a.m.-10:20 a.m.: Presentation of the ALA Lifetime Achievement Award to Ms. Joyce Raezer, former Executive Director, National Military Family Association by Michael Sleighter (ALA Chairman of the Board) and Stephen Rossetti (ALA President).  Ms. Raezer’s distinguished career advocating for military families will be recognized at this ceremony.  Remarks by Joyce Raezer. 

10:20 a.m. to 10:25 a.m.—Mr. Michael Sleighter (Advantage Sales Inc.) and ALA’s Chairman of the Board will discuss the agenda for the Association in 2021. 

 10:25 a.m.- 11:00 a.m.: Captain Jeffery Eldridge, Commander, Coast Guard Exchange, will discuss pandemic experience, and programs and agenda for the Exchange going forward.

11:15 a.m.11:20 a.m.: Presentation of the AlA’s Distinguished Service Award to Congressman Rob Wittman.  Congressman Wittman has served Virginia’s 1st District since 2007.  He is the Ranking Member of the Seapower and Projection Forces Subcommittee, House Armed Services Committee.  Congress Wittman has been a consistent supporter for a strong defense and for military quality of life programs including the commissary and exchange programs.  Most recently, he has promoted relief for military resale programs that have been stressed during the pandemic.   Congressman Wittman will receive ALA’s prestigious Distinguished Service Award and provide some remarks.

11:20 a.m.-12:00 p.m.: Susan Eisenhower.  Author and granddaughter of President Dwight “Ike” Eisenhower will talk about leadership principles and her new book “How Ike Led”. 

12:00 p.m. – 1:30 p.m.: Military resale agency collaboration and future merchandising and marketing efforts.  A panel of discussion of efforts resale agencies are taking to come together to improve operations and patron service.  The panel will include: Scott Poteet Director of Marketing, Coast Guard Exchange; Amy Kafner, Chief Merchandising Officer, Veterans Canteen Service; Rich Honiball, Executive Vice-President, Global Chief Merchandising and Marketing Officer; Jennifer Wible, Deputy Director, Business Operations Chief Operating Officer, Marine Corps Community Services; Ana Middleton, President, Chief Merchandising Officer, Army and Air Force Exchange Service; Chris Burns, Executive Director, Sales, Marketing and Logistics, Defense Commissary Agency. 

 1:30 p.m. – 2:00 p.m.: Mr. Marc Childs and Mr. Mark Baum, consumer products industry experts will discuss the outlook for the CPG industry and its effect on military resale programs.

 2:00 – 3:00 p.m.:  Gaining a larger share of wallet.  A panel discussion of marketing efforts by resale agencies and their media trading partners to reach patrons with the value proposition for military resale programs.  Sandi Lute, Vice-President, Marketing and Customer Engagement, Army and Air Force Exchange Service; Scott Poteet, Director of Marketing, Coast Guard Exchange; Sandi Bates; Chief Marketing Officer, Marine Corps Community Services; Marc Michaels, Military Media; Shane McCarthy, Sandboxx; Mark Igo,MyMilitarySavings.com; Moderated by Christine Roussey, IRI.   

3:00 p.m.-3:10 p.m.—Closing remarks by Mr. Marty Johnson, Chairman of the ALA’s Annual Conference and special performance by John Woodall singing “Home”.

From the desk of the ALA President

ALA’s Resale Resurgence Annual Convention October 19, 20, 22.  We are working hard to pull together a great event and the latest agenda appears at the end of this communication.  A long list of distinguished speakers will discuss trends and policies affecting exchanges and commissaries along with highlighting efforts by military retailers and industry to inject excitement into the military shopping experience.  We’re also going to be talking about political events that will shape the course of the military’s resale system.  Many ALA member companies have stepped up as sponsors to make the event extra special and we very much appreciate and value their participation.  If you haven’t registered, please contact Mr. Bob Ellis at bellis@ala-national.org

Mark your calendar for DeCA/ALA category management meeting.  November 10, 12:30 p.m. to 2:00 p.m.  Opportunity for industry to discuss direction of Joint Business Planning with all DeCA category management teams.  Share ideas such as cross merchandising on how to take program into 2021.  Final agenda is in the works.  Stay tuned.

Democrat defense funding fight?  A subject to be discussed at next week’s ALA Convention is the defense budget and its implications for resale programs.  The Chairman of the House Armed Services Committee, Rep. Adam Smith is predicting a fight over defense funding in the new Congress.  Smith has been promoting a “rational Democratic, progressive National Security policy that may materialize in cuts to the Pentagon budget.  ALA is closely tracking this debate as it will have a bearing on the pressure on funding for community programs such as the Defense Commissary Agency.  The Democratic split over the size of future defense budgets will come to a head in the new Congress, the chairman of the House Armed Services Committee, Rep. Adam Smith, D-Wash., predicted.   “I think the reasonable assumption is yeah, the defense budget is going to be flat for a while ― and there is no reason on Earth in my view that we cannot defend the United States of America for $700 to $740 billion,” Smith said. “So, I think the better question, the question to focus on, is how do we get more out of it?”

“Section 889” emerges as a resale issue.  Section 889 of the fiscal year 2019 Defense Authorization Act places restrictions on telecommunications equipment of services purchases produced by five named Chinese companies.  Military resale stores are being asked to agree to requirements of the law and its implementing regulations.  This will have major implications on industry as DOD is proposing that it extend to include all goods and services obtained by nonappropriated fund instrumentalities and this includes exchanges.  ALA is concerned that requiring NAF programs to implement this law and extend it to all purchases will wither directly or indirectly affect military consumers.  We are concerned that until it is a National policy that extends to commercial entities, that military consumers should not be singled out and forced to bear the burden of restrictions that the rest of American consumers do not have to face.  We are dealing with the Congress and with the Administration to ensure fair treatment of military consumers.

Family advocate to be honored at ALA Annual Convention.  Joyce Raezer, a long-time advocate for military families and former Executive Director of the National Military Family Association, will be honored at ALA’s Annual Convention to be held on-line October 20 & 22.  In announcing the award to Ms. Raezer, ALA said: “Your efforts are no more illustrated than during the National pandemic crisis that our Nation is confronting.  Unlike traditional wartime mobilizations undertaken by the Department of Defense, the COIVD-19 pandemic was first and foremost a human problem requiring immediate and sustained efforts by the Department to meet the needs of military families.  DoD did so; ensuring that our families received what they needed.  Whether for housing, health care or commissaries and exchanges, the system and services for our military families were there.  This was no accident.  DoD was prepared.  Your advocacy for military families over the years helped ensure that DoD was prepared, just as it has been prepared to care for families in countless mobilizations to defend our Nation.   It is the true definition of the military family readiness for which you advocated for so staunchly and steadily in your splendid career.  

“You were the voice for military families and when you spoke, members of Congress and Administration officials took note and took action.  They did so because they knew that when you spoke, you spoke not only from years of experience in dealing with military family matters but also from the heart.  Today, a military spouse is nurturing her children while her spouse is in harm’s way defending our Nation.  While they may not be fully aware of your contributions, they are the beneficiaries of your sustained efforts and expertise.   They feel it each and every day as they stand with their families on the frontiers of freedom.”

“It is a proud legacy that we are pleased to recognize and be associated with.  Our Nation is stronger for this legacy and we are proud to provide you with this most deserved recognition.”

Under Secretary of Defense for Personnel and Readiness to speak at ALA convention.  The Honorable Matthew Donovan will be addressing the ALA’s Annual Convention next week.  Donovan is expected to discuss a wide range of issues that faced the military resale system.  As Under Secretary, he is heavily involved with military resale, with DeCA coming under his purview along with the Executive Resale Board and policy proponency for commissaries and non-appropriated fund programs including exchanges.   

ALA steps up as a sponsor and supporter of an upcoming unified military resale Veterans Day event.  Veterans Day falls on November 11 this year and all five of the military resale agencies are getting together to recognize America’s Veterans with a major “In Recognition Of” event.  ALA is participating as a sponsor and we are urging all member companies participate as well.  Sponsors will get their company logos displayed, have in-store recognition, and videos to be included in the lead up to Veterans Day.  Participating are AAFES, NEXCOM, MCX, DeCA, and CGX.  In a joint letter to industry, the five agencies said that inclusion in the event “will be inclusive within the collective marketing efforts across all military resale entities and within any cross-promotional activities. Companies wishing to sponsor should contact   William.Marx@nexweb.org

Small businesses not reaping their share of pandemic awards.  The Defense Logistics Agency has awarded hundreds of millions of dollars in contact for the Federal response to the pandemic.  DLA’s director of small business said that they are seeing fewer small businesses in its traditional supplier base competing for contracts in the wake of the coronavirus pandemic.   Thee director of the DLA’s Office of Small Business Programs, Dwight Deneal, said that the agency plans to roll out a new virtual outreach effort next month to reengage its small suppliers.  The Pentagon faces congressional scrutiny amid reports it awarded lucrative contracts for disposable medical gowns to a handful of unexpected and inexperienced companies despite bids from more than 100 vendors with track records of

Commissary at Naval Submarine Base Groton temporarily closes to deal with COVID.  In an October 12 release, the base said that the store would be closed until further notice after an “after hours stocker” tested positive.  The store is being inspected by a health team.

Amazon and Spartan Nash.  Spartan Nash, a major commissary distributor, has struck a deal with Amazon where the online retailer will become one of its largest shareholders. The company issued stock warrants to Amazon and said in its SEC filing that the warrant for the Amazon affiliate comes “in connection with its entry into a commercial agreement with Amazon.” Spartan has had had Amazon as a customer for at least four years when in 2016 they did a deal to supply dry and chilled dry and chilled groceries to Amazon distribution centers, including support of the Seattle-based e-tailer’s Amazon Prime Now grocery delivery program and emerging AmazonFresh perishables delivery service.  SpartanNash is the nation’s fifth-largest food distributor, operating 12 grocery distribution centers and seven military DCs. The company also operates 155 corporate-owned supermarkets in nine states and supplies more than 2,100 independent grocers nationwide.

Romania and U.S. deal.  We have been reporting on U.S. and NATO expansion further east.  In another development, The U.S. and Romania have signed a 10-year road map for defense cooperation.   “The deal “captures our common strategic goals and interests, such as defense modernization and Black Sea security,” Defense Secretary Mark Esper said. The road map could help pave the way for a larger U.S. mission in the country. Esper has said he wants to increase the U.S. troop presence in Romania, an emerging hub for NATO on its southern flank.  It comes as the U.S. is also expanding its presence in Poland and as the Administration is looking to reduce its presence in Germany.  Romania also is investing in the modernization of Mihail Kogalniceanu Air Base, “to become a pivotal hub in the Black Sea,” according to Romanian officials.   The U.S. military has invested heavily in Romania in recent years to support expanded troop rotations in places such as Mihail Kogalniceanu Air Base and Campia Turzii Air Base.

Christmas comes earlier and earlier.  Some of the Nation’s largest retailers will begin rolling out Black Friday sales this weekend — earlier than ever and the latest sign of how the pandemic is reshaping the biggest shopping season of the year.

Walmart, Target and other major brands were spurred to push up their holiday timetables by Amazon’s decision to move Prime Day, which is usually in July, to October.  More than a dozen major retailers have filed for bankruptcy during the pandemic, and several others are at risk of running out of cash. By kicking off sales in October, [retailers] are hoping to spread consumer traffic and demand over the next few months, helping them maintain social distancing in stores, consistently move inventory and adjust their strategies based on early consumer demand, according to industry experts.

Malls taking a beating.  Only 45 percent of shoppers plan to visit a mall to do some or all of their holiday shopping, down from 64 percent last year according to the International Council of Shopping Centers.  More than three-quarters of respondents said they expected to start shopping earlier than usual. The survey was based on responses from more than 1,000 U.S. shoppers between Sept. 28 and 30. Traffic at the country’s largest malls dropped 51 percent in the first eight months of 2020 compared to the same period last year.

Dollar General with over 16,000 stores wants to attract more high-income shoppers.   The company plans to open a new brand of stores called Popshelf that mostly sells things shoppers don’t need but might want, such as party supplies, home decor or beauty products. Stores will be in the suburbs of larger cities, with two planned for the Nashville, Tenn., area in the next few weeks and 30 by the end of next year. Items will be priced low, mostly under $5, but designed to appeal to women from households that earn as much as $125,000 a year.  Sales at Dollar have risen 19 percent year over year.

Amazing Amazon.  This from a just released House of Representatives Judiciary Committee Report “Investigation of Competition in Digital Markets”

“As Amazon’s e-commerce business has grown, it has also developed a significant logistics business surrounding fulfillment and delivery of third-party orders with its Fulfillment by Amazon (FBA) program. More than 73% of all Amazon Marketplace sellers reportedly rely on this program to fulfill their orders.

 Because of this, a trade association that represents third-party sellers refers to Amazon’s fulfillment operation “as the railroad of [e-commerce]. ”In addition to its fulfillment operation, Amazon is also one of the largest shippers in the world. The company provides global shipping services for its own products and independent sellers that sell on Amazon.com, as well as other e-commerce sites.

“Amazon’s ground shipping infrastructure consists of “trucks, trailers, intermodal containers, and delivery vehicles.” Its truck fleet consists of more than 10,000 trailers. It also has its own freight airline, Amazon Air, with about 50 leased aircraft, and plans to expand its fleet to 70 by 2021. Amazon has also built hundreds of package sorting and delivery centers across the United States and has established its own network of contracted delivery providers exclusively dedicated to delivering packages for Amazon.

“In recent years, the size and scope of Amazon’s delivery services and network has grown significantly. When Amazon first launched Fulfillment by Amazon, it stored products and packed orders in its warehouses, but relied on other carriers to handle shipping and delivery. Today, Amazon ships a growing number of products itself. In 2019, “Amazon delivered about half of its own packages, up from 15 percent just two years before.” Amazon has also lessened its use of large delivery companies during this time, using “800 small, independent contractors [which] are now responsible for around 48 percent of Amazon’s last mile deliveries.” These smaller providers are economically- dependent on Amazon, and “many are in fact reliant on Amazon for 100 percent of their business.”

“Parcel volume handled by Amazon’s delivery service now rivals the top carriers, including UPS, FedEx, and the U.S. Postal Service. “In 2019, Amazon delivered 2.5 billion parcels, or about one-fifth of all e-commerce deliveries, and anticipates growth. In a July 2020 investor call, Amazon CFO Brian Olsavsky stated that Amazon “expect[s] a meaningfully higher year-over-year square footage growth of approximately 50%,” which includes “strong growth in new fulfillment center space as well as sort centers and delivery stations.”

“An analysis by Morgan Stanley concluded that Amazon will overtake UPS and FedEx in market share for delivery by 2022. Amazon has already surpassed the U.S. Postal Service, which has been downsized dramatically under its current leadership. Last year, the U.S. Postal Service had a decrease in parcel volume for the first time in a decade.  

Leading CPG expert Mark Baum at ALA convention.  Mr. Baum will describe the exploding online marketplace and its implications for the industry and the military resale channel along with the latest in the CPG industry.

Instacart market value doubles in one year to $18 billion.  Instacart has raised $200 million in new funding, further solidifying the company’s position as a leader in grocery e-commerce.  It has expanded to more than 500 retailers, deliver from nearly 40,000 store locations across North America and move grocery delivery into the mainstream as millions of people across North America now rely on Instacart.

The company partners with more than 500 retailers and delivers from nearly 40,000 store locations across the U.S. and Canada. Instacart is available to more than 85% of U.S. households and more than 70% of Canadian households with delivery and pickup services across more than 5,500 cities in North America. The company expects to deploy the new capital in a number of ways, including: product development focused on introducing new features and tools to enhance the customer experience, continued investment in Instacart Enterprise to support retailers’ end-to-end e-commerce needs, and further investment in Instacart Ads to help connect Consumer Packaged Goods (CPG) brands of all sizes to customers shopping online from their favorite local retailers.

Instacart just rolled out its Senior Support Service, a high-touch support offering for customers over age 60, has brought more than 60,000 seniors online with online grocery delivery in the past month.

Kroger ClusterTruck deal.  Kroger is the largest U.S. grocer and it has teamed with ClusterTruck to operate delivery only restaurants.  ClusterTruck is a technology start-up that operates delivery-only restaurants, the kitchens will provide a variety of freshly prepared meals on-demand with no service or delivery fees.  Different from the off-premise concept, the new concept will repurpose approximately 1,000 square feet at each participating store to create a culinary space for ClusterTruck staff to prepare meals for quick delivery and in-store pickup. Customers can order from a menu of more than 80 meals, spanning a variety of ingredients – and best characterized as food quality you can get at a sit-down restaurant with the personality of street food. The expansion of Kroger’s relationship with ClusterTruck reflects the retailer’s ongoing investments in providing a variety of prepared fresh food options and creating a seamless experience for customers. Kroger experienced a 127% digital sales lift in second quarter 2020, as customers continued to use digital ordering options, including pickup, delivery, and ship to home.

The Department of Defense has published a new Data Strategy with implications for military resale companies.  ALA is working with the Department of Defense on implementing the CMMC or Cyber Security Model Certification and looking at how military resale companies will have to comply.  It also has implications on the roll-out of DeCA’s data systems.  This comes as DoD issued a new data strategy.  The Strategy emphasizes managing data as a strategic resource, highlighting the criticality of data to build and maintain battlefield advantage, and the need to treat information systems on par with the priority given to weapon systems.    DOD Chief Information Officer Dana Deasy stated, “Data is the ammunition in the Digital Modernization Strategy and is increasingly central to warfighter advantage on and off the battlefield. The National Defense Strategy directed us to be more lethal, efficient, and interoperable with partners. This strategy is our first step to making that ammo persistently available to the men and women of the DOD regardless of echelon or geographic location.”

Defense does a deal with Rheaply to process surplus goods,  Each year DoD processes about $50 billion in surplus property and DoD has just done a deal with Rheaply, a Chicago startup that specializes in recycling and sourcing unused items, has landed a contract with the U.S. Defense Logistics Agency to help government entities, like the Department of Defense and the U.S. Air Force, streamline the redeployment of military property. Through the partnership with the DLA, Rheaply will study the government agency’s disposition processes and provide improvement suggestions using its software.  The DLA gather unused military equipment, refurbish it and redeploy it to a department or person who needs it. Each year, the DLA processes approximately $50B of surplus property, which can range from hardware and fitness equipment, to weapons and vehicles.

Shipt is hiring an additional 100,000 shoppers this holiday season. 

The new hiring push will bring the company’s personal shopper base to over 300,000 (rival Instacart has amassed an army of 750,000 shoppers this year.)  It is now available to 80% of households in more than 5,000 U.S. cities

 

ALA Annual Conference Agenda:  

Resale Resurgence 

An agenda for resale growth

The vast network of military businesses is weathering the pandemic—responding to patron needs.  At the Defense Commissary Agency and the exchange commands of the armed services, managers and their industry partners are exploring new avenues to ensure that the system emerges from the pandemic stronger, and more relevant and responsive.  This year’s ALA agenda focuses on these efforts.  

 ALA’s Annual Convention 

Monday, October 19, 2020

ALA business meeting (members only)

1:00 p.m. to 1:15 p.m.: Call to order—Mr. Bill Doyle (EURPAC), Chairman of Board.  Mr. Doyle will describe the state of the Association along with business and policy priorities. 

1:15 p.m. to 1:30 p.m.:  Treasurers report—Mr. Joe Campagna (Kellogg’s, Inc.), ALA Treasurer

1:30 p.m.- 2:00 p.m.—Board of Directors, Commissary Council and Exchange Council recognition—Mr. Bill Doyle (EURPAC, Inc.)

2:00 p.m.-2:05 p.m.—Passing of the Gavel from Bill Doyle to Michael Sleighter (Advantage).

2:05 p.m.-2:20 p.m.—Incoming Chairman’s remarks

Tuesday, October 20, 2020

10:20 a.m.- 10:25 a.m.—National Anthem—John Woodall

Musician, songwriter and performer John Woodall will sing the National Anthem.  John is not only a wonderful artist; he loves America’s military.  He is founder of Camp4Heroes, a caring respite for injured Veterans and first responders located in North Carolina.  He regularly performs for the U.S. military, most recently on the USS Eisenhower. 

10:25 a.m.– 10:30 a.m.—Opening remarks.  Conference Chairman Mr. Marty Johnson (E&J Gallo, Inc.) will set the tone for the convention and describe the sequence of events.

10:30 a.m.- 11:00 a.m.—Mr. Rob Bianchi (RADM, USN, Ret.) Chief Executive Officer, Navy Exchange Command

 The Navy Exchange Command or NEXCOM circles the globe providing vital retail services and mission support for the U.S. Navy.  Admiral Bianchi will describe major initiatives, accomplishments and goals.

 11:00 a.m.-11:45 a.m.—Mr. Tom Shull, Chief Executive Officer, Army and Air Force Exchange Service

 Mr. Shull describes the major initiatives of the Exchange including mission support, pandemic reaction, and major initiatives to pitch AAFES into the future. 

 11:45 a.m.-12:30 p.m.–Defense Department programs and policies—Mr. Berry Patrick, Office of MWR and NAF Policy, Under Secretary of Defense for Personnel and Readiness

 Mr. Patrick will describe emerging military resale issues and programs and policies being examined by the Department of Defense.

 12:30 p.m.- 1:30 p.m.: Government affairs update–Mr. Stephen Rossetti, President, American Logistics Association

–       Democrat and Republican views on resale and Department of Defense issues

–       Resale issues before Congress

–       Commissary transformation

–       Exchange system issues

–       ALA member relevance initiatives

–       Industry support for resale programs

–       Base access

–       Geo-political factors affecting Defense spending

–       Status and outlook for Defense spending.  

–       Force structure outlook.  

–       Military personnel reforms and implications for military base operations and resale programs.  

–       4th Estate reforms and effect of DeCA

–       Congressional action on the fiscal years 2020 and 2021 VA, DoD, and DHS budget affecting resale programs

–       Resale consolidation 

–       Base closures and global re-stationing of forces 

–       Compliance restrictions in the FY 2021 NDAA

–       The politics of defense and National security, supporting military families, status of budgetary deliberations

–       Changes in business practices and relationships between sectors of the industry

–       Defense plans and studies on consolidation and resale restructuring

–       The politics of defense and National security, supporting military families, status of budgetary deliberations

1:30 p.m. – 2:15 p.m.: Marine Corps exchange issue.  Ms. Cindy Wittman-Lacy, CEO/Director Business and Support Services HQ USMC will discuss accomplishments and objectives for Marine Corps exchanges and MWR programs. 

2:15 p.m.-2:45 p.m.: Mr. Ray Tober, Executive Director, Veterans Canteen Service will discuss VCS efforts during the pandemic and the prospects for VCS going forward in the post-pandemic world. 

2:45 p.m.- 3:30 p.m.-The Honorable Matthew Donovan, Under Secretary of Defense for Personnel and Readiness.  Secretary Donovan will discuss Department of Defense personnel programs including quality of life efforts and programs and policies affecting the military resale system.

3:30 p.m.- 4:15 p.m.: Mr. Bill Moore, Director, Defense Commissary Agency.  Mr. Moore just took over at DeCA and is expected to discuss his agenda for improving commissary operations.  

Thursday, October 22, 2020

 10:00 a.m. – 10:05 a.m.: Singer and songwriter John Woodall will perform his wonderful song Stand Tall—a call to America to stand with its military and first responder heroes.

10:05 a.m.10:15 a.m.: Presentation of the AlA’s Distinguished Service Award to Congressman Rob Wittman.  Congressman Wittman has served Virginia’s 1st District since 2007.  He is the Ranking Member of the Seapower and Projection Forces Subcommittee, House Armed Services Committee.  Congress Wittman has been a consistent supporter for a strong defense and for military quality of life programs including the commissary and exchange programs.  Most recently, he has promoted relief for military resale programs that have been stressed during the pandemic.   Congressman Wittman will receive ALA’s prestigious Distinguished Service Award and provide some remarks.

10:15 a.m. to 10:20 a.m.—Mr. Michael Sleighter (Advantage Sales Inc.) and ALA’s Chairman of the Board will discuss the agenda for the Association in 2021. 

10:20 a.m.- 11:00 a.m.: Captain Jeffery Eldridge, Commander, Coast Guard Exchange, will discuss pandemic experience, and programs and agenda for the Exchange going forward.

11:00 a.m.-11:20 a.m.: Presentation of the ALA Lifetime Achievement Award to Ms. Joyce Raezer, former Executive Director, National Military Family Association by Michael Sleighter (ALA Chairman of the Board) and Stephen Rossetti (ALA President).  Ms. Raezer’s distinguished career advocating for military families will be recognized at this ceremony.  Remarks by Joyce Raezer. 

11:20 a.m.-12:00 p.m.: Susan Eisenhower.  Author and granddaughter of President Dwight “Ike” Eisenhower will talk about leadership principles and her new book “How Ike Led”.  

12:00 p.m. – 1:30 p.m.: Military resale agency collaboration and future merchandising and marketing efforts.  A panel of discussion of efforts resale agencies are taking to come together to improve operations and patron service.  The panel will include: John Reiley, Chief Operating Officer, Coast Guard Exchange; Amy Kafner, Chief Merchandising Officer, Veterans Canteen Service; Rich Honiball, Executive Vice-President, Global Chief Merchandising and Marketing Officer; Jennifer Wible, Deputy Director, Business Operations Chief Operating Officer, Marine Corps Community Services; Ana Middleton, President, Chief Merchandising Officer, Army and Air Force Exchange Service; Chris Burns, Executive Director, Sales, Marketing and Logistics, Defense Commissary Agency. 

1:30 p.m. – 2:00 p.m.: Mr. Mark Baum, consumer products industry expert will discuss the outlook for the industry and its effect on military resale programs.

 2:00 – 3:00 p.m.:  Gaining a larger share of wallet.  A panel discussion of marketing efforts by resale agencies and their media trading partners to reach patrons with the value proposition for military resale programs.  Sandi Lute, Vice-President, Marketing and Customer Engagement, Army and Air Force Exchange Service; Scott Poteet, Director of Marketing, Coast Guard Exchange; Sandi Bates; Chief Marketing Officer, Marine Corps Community Services; Marc Michaels, Military Media;, Sam Meek, Sandboxx; Rich Carroll, D&R Communications; Mark Igo, MyMilitarySavings.com; Vince Santoro, MilitaryLife Publishing Co (invited);  Joe Mugnai, Family and Salute Magazine (invited).  Moderated by Christine Roussey, IRI.   

 3:00 p.m.-3:10 p.m.—Closing remarks by Mr. Marty Johnson, Chairman of the ALA’s Annual Conference and special performance by John Woodall singing “Home”.

 

Best regards,

Stephen Rossetti
President

Presidents Message/Washington Update 10/6

Resale Resurgence is the theme for this year’s ALA virtual annual convention to be held October 20 and Because of the rapid moving parts of the resale program, the agenda for the event is being assembled in real-time and will highlight all of the great efforts of commissaries and exchanges to weather the pandemic and boost business both during and after COVID.  Resale resurgence is real: There has been a surging emphasis on building sales at DeCA with DeCA leaders and business managers revitalizing the partnership with industry to get patrons back to the stores, boosted by increased activity of ALA’s commissary and exchange councils.  Exchanges are powering up their promotional programs as well.  The conference builds on joint business planning sessions already held by ALA and DeCA and other business building cooperative ventures between ALA and the exchanges.  And, as mentioned below, Congress and the Administration and Defense leadership are stepping forward, recognizing the contributions that these programs make and putting their shoulder to the wheel as well.  We’ll be discussing what is happening with business both inside and outside the gate both in the pandemic and post pandemic world.  Speakers are being confirmed but include leaders from the resale programs, DoD and the Administration, industry experts, base access experts, media and family advocacy leaders.  Registration details have been distributed.   A virtual ALA membership business meeting will be held October 19.  Contact Bob Ellis at bellis@ala-national.org.

Happy New (fiscal) Year…Continuing Resolution fund Government until at least December Commissary and exchange business will continue uninterrupted at least for a couple of months as the Senate passed and the president signed on October 1 a bill to keep the Federal Government open until at least December 11.  Appropriations for the Government expired on September 30 and unless the Congress acted, the Government would have had to shut down.  This didn’t happen.  This means that DeCA will be funded at last (fiscal) year’s levels plus another $34 million that was appropriated to DeCA in the first pandemic stimulus bill that passed earlier this year.  Exchanges get funding for transportation of products overseas and these funds will also continue to flow under the Continuing Resolution.  Exchanges and other NAF programs of the DoD are getting appropriations to cope with the pandemic, but these funds are being provided by the Services and DoD from money Congress allocated in the first pandemic stimulus bill, a move supported by ALA and endorsed by Congress.  $300 million was provided for the first two months of the pandemic and more funding from the first stimulus bill is in the pipeline.  Because funds were directly appropriated to the Army, Navy, Air Force and Marine Corps, they have to be “reprogrammed” to be provided to offset pandemic costs by the exchanges.  So far, the Navy and Marine Corps leadership have done with Army and Air Force funding reportedly beginning to flow. 

$140 million provided to offset VCS losses.  The Continuing Resolution contained a major lifeline–supported by ALA–for the hard-pressed Veterans Canteen Service by providing $140 million to underwrite VCS operations and offset pandemic costs.  VCS has been struggling after the pandemic reduced patient and visitor flow to the VA hospitals around the Nation.  Ray Tober, head of the VCS will speak at the ALA’s Annual Conference and discuss their pandemic experience and the noble efforts of the VCS leadership and workforce to continue the great work of this organization. 

House-passed bill includes $1.4 billion for exchanges and other Defense NAF programs. In a remarkable and welcome move, one that is endorsed by ALA, the House passed a massive pandemic stimulus bill called “Making Emergency Supplemental Appropriations for the Fiscal Year Ending 2021 and for other Purposes.” that includes $1.4 billion for helping exchanges and other NAF programs of the DoD to cope with the pandemic.  A press release from the House appropriators said:

$1.4 billion for salaries and other needs of over 55,000 base employees of childcare centers, lodges, food operations, exchanges and other recreational activities that are normally paid by revenue.” The legislators have asked the DOD for a plan how they to allocate the funding.

It’s far from a done deal.  Agreement by the Senate and enactment of the House bill is uncertain as negotiations between the White House and the Senate continue.  Regardless of how the bill progresses, it represents a clear and unequivocal statement by the Congress of the critical contribution that these programs provide to the National defense mission. 

Here’s the paraphrased House legislative language providing the funding: SEC. 301. For an additional amount for ‘‘Operation 12  and Maintenance, Army’’, $400,000,000, to prevent, prepare for, and respond to coronavirus, domestically or internationally: Provided, That such amount shall be used for necessary expenses, including salaries, cleaning, utilities and personal protective equipment, for recreational entities, childcare development centers and other entities affected by the coronavirus that derive funding from non appropriated accounts: Provided, That prior to the obligation of such funds the Secretary of the Army shall submit to the Committees on Appropriations of the House of Representatives and the Senate a spend plan on the use of funds made available by this section: Provided further, That such amount is designated by the Congress as being for an emergency requirement pursuant to section 251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Control Act of 1985  The $1.4 billion breaks down like this: Army, $400 million; Navy, $400 million; Air Force, $500 million; Marine Corps, $100 million.  Besides the $1.4 billion for NAF programs, the DoD got $320 million in the bill for their operating accounts. 

Better together.  Congratulations to NEX and MCX on their new joint e-commerce website designed to bring both Navy and Marine Corps customers a world-class online shopping experience. The new co-branded site will officially launch with a combined marketing campaign called #BetterTogether. This campaign will kick off on the Navy’s birthday, Oct. 13, and run through the Marine Corps’ birthday on Nov. 10. This campaign includes a virtual concert series, virtual 5k and a kids’ baking competition, as well as a joint Navy-Marine Corps Relief Society fundraising effort. In-store signage will also announce the collaboration in both NEX and MCX locations starting Oct. 1.   October 1 marked the launch of the Navy Exchange (NEX) and Marine Corps Exchange (MCX) online retail and uniform stores transition to a new unified online e-commerce portal at myNavyExchange.com.

As part of the collaboration, myNavyExchange.com will undergo a design change to reflect the new co-branding, as well as add a new wealth of product assortments and an expansion in several areas including: Tactical gear, male and female Marine uniform assortments, sports nutrition, and  Marine Pride merchandise.

“We have always embraced the time-honored bond between the U.S. Navy and U.S. Marine Corps, and we believe this joint partnership will forge a stronger, higher-quality experience for our online customers,” said retired Rear Adm. Robert J. Bianchi, CEO, Navy Exchange Service Command. “The decision to partner under one website will create better alignment and additional resources for our joint patrons.”  “The U.S. Marine Corps and U.S. Navy are a combined force when serving our country, and we are thrilled to bring that spirit of partnership and collaboration to this strategic alliance,” said Cindy Whitman Lacy, CEO, Marine Corps Business and Support Services Division. “We are especially thrilled to be adding the option of order online and pick up at your MCX as an added convenience for our Marines and their families.”

All authorized customers who currently shop on the myNavyExchange.com site will be able to access the redesigned site using their existing accounts. MCX customers will need to setup a new account on the myNavyExchange.com site if one is not already established. Additionally, while both organizations will continue to promote the #BetterTogether initiative, MCX and NEX will still continue independent marketing and social media channels. 

Pentagon News/Military News:

EB 9 October 2020:

ALA’s annual conference gathering steam.  The agenda for the virtual event to be held on October 20 and 22 includes speakers from DoD, all of the resale agencies and some special surprise headliners including Susan Eisenhower, grand daughter of former President and Supreme Allied Commander General Ike Eisenhower.  Susan just released a great book “How Ike Led”.  Registration details have been sent to industry. Those who have not received the registration information can register here https://ala.enoah.com/73rd-Annual-Convention or contact Bob Ellis at ALA  bellis@ala-national.org    ALA’s membership business meeting will be held on October 19th, the day before the general sessions

 

Democrats face internal ‘fight’ on defense spending, says Smith
(Defense News) The Democratic split over the size of future defense budgets will come to a head in the new Congress, the chairman of the House Armed Services Committee, Rep. Adam Smith, D-Wash., predicted Tuesday.

 1. Top military leadership quarantines after Coast Guard vice commandant tests positive for COVID-19
(Air Force Times) Much of the nation’s top military leadership is now in quarantine after the vice commandant of the Coast Guard tested positive for COVID-19, a senior Defense Department official said Tuesday.
 

Top House lawmakers launch investigation into Pentagon redirecting COVID-19 funds
(The Hill) The heads of several House subpanels on Friday called for the Pentagon to turn over documents on how it used $1 billion in coronavirus relief funds, citing the Defense Department’s use of much of the money to pay defense contractors rather than buy medical supplies.
   

VA expands caregiver stipend to cover eligible Vietnam, Korea and World War II veterans
(Military.com) A major change to a popular Department of Veterans Affairs program means the family caregivers of Vietnam, Korea and World War II veterans may qualify to get paid for their help and have access to caregiver training, mental health services and counseling and more.
   

Here’s the USPS suggested deadlines for getting your holiday goodies to overseas troops in time
(Military Times) While there are still a few weeks to go before Halloween, it’s time to start thinking about getting those Christmas and Hanukkah packages and cards to overseas military locations.
   

2. Trump: US will be out of Afghanistan by Christmas
(Military Times) President Donald Trump announced via tweet Wednesday night that all remaining U.S. troops serving in Afghanistan should be withdrawn by Christmas, putting an end to the 19-year American military conflict there.

INDUSTRY NEWS

Walmart to add digital features in supercenter remodels

Walmart will remodel 200 of its US super centers this year, with technology and other features designed to combine the best of in-store and in-app shopping, said Janey Whiteside, the retailer’s chief customer officer. Remodels, which will be expanded to 1,000 locations next year, will feature contactless checkout options, improved signage that works with the Walmart mobile app and separate sections for major product categories.

How Best Buy has grown during the pandemic

Best Buy’s decision to close its stores in March hasn’t slowed sales in the pandemic; rather, it shifted sales to online as the electronics retailer quickly retooled to serve consumers who were suddenly doing work and school from home, CEO Corie Barry said. Stores reopened after six weeks for appointment-only visits and began to reopen fully in June, and strong sales allowed Best Buy to call back two-thirds of its furloughed workforce.

RESALE NEWS:

DeCA docks store brand pricing this month

DeCA (The Defense Commissary Agency), which operates a chain of commissaries and groceries to military personnel…

Commissaries honor Navy’s 245 years of service

said. –DeCA– About DeCA: The Defense Commissary Agency operates a worldwide chain of commissaries providing …

Stars and Stripes  CHAD GARLAND(1 other source)USAOct 210:27 am

Hot Pockets in short supply at AAFES, commissaries because of coronavirus

Army and Air Force Exchange Service’ class=” src=’/polopoly_fs/1.627760.1588131435!/image/image.jpg_gen/derivatives/150×100/image…

In-store Specialty Delicatessen and Bakery Resale Operations, to include Sushi where applicable for 24 Defense Commissary Agency Commissary…

: Defense Commissary Agency, Building P11200, 1300 East Avenue, Fort Lee, VA 23801-1800 Description The Defense Commissary …

NEX and MCX Announce Transition to a Unified Online e-Commerce Portal

Photo By Kristine Sturkie | Beginning Oct. 1, the Navy Exchange and Marine Corps Exchange online retail and…… read …

 

American Logistics Association

73rd Annual Convention

General Sessions

October 20th and 22nd

10:00a.m. – 3:00p.m. Eastern Time

Virtual (WebEX)

Annual Meeting of Members

October 19, 12:00p.m.-2:00pm Eastern Time

Industry Registration: Industry registrants must be employees of ALA member companies to attend the 73rd Annual Convention. Admittance to all sessions. Please view the agenda for details on sessions.

Payment Information: Full payment must be received $395.00 with the registration form by the date specified to receive the discounted rates. Registration forms submitted without full payment will not be processed until payment is received. Discounted rates are applicable on the date full payment is received, NOT on the date the registration form is submitted. Registration forms must be submitted by October 15, 2020

Cancellation Policy: Cancellation requests must be submitted in writing. Cancellations received by October 15th will receive a full refund. Cancellations received between October 16th and October 19th, No refunds. Cancellation refunds will be processed by original method of payment. All refunds will be processed post-meeting and mailed directly to the individual on the registration form. Cancelled registrations may be transferred to individuals within the same company, upon written request. Cancelled registrations may not be transferred to another ALA meeting. Any cancellations resulting due to a family or medical emergency must be submitted in writing by within three days of the start of the meeting to receive a refund.

Register using the link below:

https://ala.enoah.com/73rd-Annual-Convention

Industry Registrant:

________________________________________________

Name

________________________________________________

Company

________________________________________________

Address

________________________________________________

City State Zip

________________________________________________

Phone 

________________________________________________

Email

Upon registration, attendees will get an email with a link to the sessions. 

Payment:

Registration Rate – $395.00 

Registrations must be received with full payment by the date specified above to qualify for discounted fees. Please refer to the Cancellation Policy on this page.

Payment Information:

Total Due: $______________ 

AmEx         MasterCard      Visa      Discover      

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Signature (By signing this form, you are giving ALA the authority to charge this credit card for the total amount due.)

Sessions may be limited to 1000 attendees

 

Date                                               Event                                              More Information

October 20& 22 , 2020                   ALA National (Virtual) Convention           Virtual Event

Oct. 20 and Oct. 22 ALA National (Virtual) Convention


Register using the link below:

https://ala.enoah.com/73rd-Annual-Convention

Pending Coordination                 NEX-MCX Virtual Update                           TBD

Pending Coordination                  AAFES-Industry Virtual Work Shop’s         Consumables TBD

 

Best regards,

Stephen Rossetti

President

From the desk of the ALA President

Quotes of note

“DW OrganizationTransition to Chief Management Officer (CMG) Governance: The CMOoperating under the Deputy Secretarys guidancewill be responsible for the business functions of DW organizations. The CMO will focus on reforming business processes, overseeing resource planning and allocation, and evaluating each DW organizations performance against business goals. The CMO will establish methods to strengthen oversightcontinue reform momentumand instill fiscal discipline across DW organizations and accountsThe CMOs immediate focusin coordination with DirectorCost Assessment and Program Evaluation (CAPE) and the Under Secretary of Defense (USD) (Comptroller)will be to develop a consolidated FY 2022-2026 program and budget for the DW accounts. I expect DW leaders to provide their full support to the CMOs effortsand I will ask for regular progress updates”.   Secretary of Defense Mark Esper in guidance to the DoD.  DeCA oversight is now diffused between the Pentagon’s Chief Management Officer Lisa Hershman, the Commissary Operating Board, and the Pentagon’s personnel chief Under Secretary Matthew Donovan.

“I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business.  “The House & Senate should IMMEDIATELY Approve 25 Billion Dollars for Airline Payroll Support, & 135 Billion Dollars for Paycheck Protection Program for Small Business. Both of these will be fully paid for with unused funds from the Cares Act. Have this money. I will sign now!”  President Donald Trump on the latest pandemic stimulus bill negotiations.

“DoD’s success lies in a strategically ready force through cultivation of digitally savvy service members and civilians to successfully operate within a global security environment fueled by ground-breaking technological advancements.”  From the DoD’s just released personnel strategy.

‘Our CLICK2GO program factors greatly in DeCA’s future digital migration. As we continue to deploy our Enterprise Business Solution (EBS), even more options will become available.”  Willie Watkins, Chief, DeCA eBusiness Division

ALA’s annual conference gathering steam.  The agenda for the virtual event to be held on October 20 and 22 includes speakers from DoD, all of the resale agencies and some special surprise headliners including Susan Eisenhower, grand daughter of former President and Supreme Allied Commander General Ike Eisenhower.  Susan just released a great book “How Ike Led”.  Registration details have been sent to industry. Those who have not received the registration information can register here https://ala.enoah.com/73rd-Annual-Convention or contact Bob Ellis at ALA  bellis@ala-national.org    ALA’s membership business meeting will be held on October 19th, the day before the general sessions.

Stimulus II back and forth.  ALA has been advocating for emergency pandemic funding to be provided to offset pandemic impact to exchanges.  Funding for DoD and for military exchanges pandemic relief are included in the House and Senate versions of bills providing funding for the Nation to cope with the pandemic.  These negotiations were taking place between the White House and the Speaker of the House with the Senate largely observing.  Yesterday, the President called off negotiations saying that “I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business. “ The President then said last night that he was open to several free-standing bills that would provide airline, paycheck protection funding, and small business aid.  Stay tuned.  The House bill contains includes $1.4 billion specifically targeted to aid exchanges and MWR programs.  The Senate bill doesn’t specify or direct funding to exchanges and MWR programs but includes nearly $5 billion for Defense that could be used for exchanges and MWR programs.  Meanwhile, exchanges and other nonappropriated fund programs are being provided nearly $300 million in funding from appropriations that were passed earlier in the year with more funding from this source in the works.  The Veterans Canteen Service received $140 million in another bill passed last week to keep the federal government open until December 11.

Senator Inhofe told of resale’s critical role in pandemic.  ALA Chairman Bill Doyle and ALA President Steve Rossetti met with Senator Jim Inhofe, Chairman of the Senate Armed Services Committee.  We emphasized the key role that commissaries and exchanges had played in the pandemic, especially in the early days and said that the Senator’s and the Committee’s long-standing support for the system had paid off in being able to keep products flowing during the emergency.  Senator Inhofe thanks the system for its response and said that he believes that the commissaries and exchanges also serve as a hub of family life on military bases all the time including during the pandemic.

NDAA in November or December.  Speaking of Senator Inhofe: A number of key provisions of law and policy are for military resale programs is being held in limbo because of a delay in the passage and enactment of the National Defense Authorization Act for Fiscal Year 2021.  These provisions include language on validating data associated with DoD’s recommendation to consolidate commissaries and exchanges, language asking the GAO to examine commissary sales declines and business practices, and several reporting requirements being placed on DoD and the resale industry for product labeling and other policy matters.  The National Defense Authorization Act is the annual policy bill developed by the House and Senate Armed Services Committees.  Both the House and Senate have passed their versions of the bill and are preparing to formally go to conference to work out their differences.  Staffers are meeting informally to work out differences, but the bill is delayed this year because of a number of contentious issues and because of the election.  ALA learned yesterday that the House conferees won’t be appointed until mid-November.  Until the Speaker of the House appoints these conferees, formal negotiations cannot get underway.  The bill is late but is expected to ultimately pass as it has done for some 50 years.

Here we go again.  Military bases in the southeastern United States are again hunkering down for a Hurricane Delta expected to hit the Gulf Coast.  The storm is gathering strength and is expected to affect operations at several baes including; Fort Polk, La.; Keesler AFB, Miss.; Barksdale AFB, La.; and possibly Eglin and Tyndall Air Forces Bases in Florida.  Military bases in Louisiana are just recovering from a hurricane strike last month.   AAFES, NEXCOM, MCX, CGS, VCS and DeCA all have been mobilizing in recent years to ensure minimal disruption to operations during these storm events and other natural disasters, exacerbated recently by the pandemic.  This mission support criticality continues to be highlighted by the ALA to policy-makers in Washington.

Another Federal NAFI hits the skids.  A largely unknown nonappropriated fund program The Smithsonian Institution has laid off 237 employees from its shops, theaters and concessions this week, part of ongoing cost-cutting measures meant to limit the financial losses related to covid-19.The Smithsonian lost $49 million — from store and restaurant revenue as well as canceled ticketed events, classes and tours — between March and September, spokeswoman Linda St. Thomas said. An additional 66 Smithsonian Enterprises employees earning $100,000 or more were hit with 5 percent cuts. The division had 550 employees before the pandemic.

The majority of the institution’s 6,300 employees are federal workers and not affected by these moves. A survey by the American Alliance of Museums found that 44 percent of the museums initiated furloughs or layoffs as a result of the pandemic; a report from this summer estimated that about 1,500 employees nationwide had been laid off since March. Federal funds from Congress make up two-thirds of the Smithsonian’s $1.5 billion annual budget, allowing the museums to offer free admission. The $500 million balance comes from endowment funds and donations, the revenue it earns from ticketed programs, shop receipts, parking and other activities. The layoffs don’t include those who work in the Smithsonian’s eight cafeterias and cafes, which are operated by Restaurant Associates and remain closed.

Data driven service member of the future.  The OSD personnel Chief Matthew Donovan has been invited to speak at the ALA Annual Convention.  Donovan has policy oversight of the military’s resale programs.  He also is the Department of Defense human resource officer.  He just issued the DoD’s Personnel and Readiness Strategy for 2030.  In it, DoD talks about an image of a service member working in tandem with a robust IT infrastructure, one who is constantly informed by data and who is surrounded by a diverse cast of highly educated peers.  The picture is a long way from the WWII stereotypes of grunts digging ditches and plodding across rough terrain, though the military still expects its employees to do that as well.  The strategy outlines the need for a “technologically dominant force that is strategically ready, globally relevant and flexibly sustainable,” the authors wrote. “The cornerstone to this vision is achieving data dominance through digital modernization, seamlessly connecting all our data in real-time and harnessing the skills of a generation of digital natives.”  While service members will be self-sufficient, they will also be constantly working with technology like artificial intelligence, GPS and various software, which require an interplay between man, machine and data.  To build this new kind of employee, DoD says it needs to provide the right kind of infrastructure. That includes having a robust IT model, room for innovation from all ranks and ways to digest data in a coherent way. “This digitally savvy workforce must intuitively understand how to effectively validate, analyze, interpret, and extrapolate data to provide information, knowledge, and wisdom for department leaders.  DoD also says it needs to change the way it approaches personnel. The strategy rejects the “industrial-era” personnel system DoD currently uses. It calls into question the “up or out” policy that forces service members to promote or leave the military.

More than 200 commissary store brands are going to be sold at a 20% discount until Oct.25. Brands include the Freedom’s Choice food brand and HomeBase non-food brand, as well as the non-exclusive store brands TopCare (health and beauty), Full Circle Market (natural and organic food options), Tippy Toes (baby products), Flock’s Finest (wild bird food for hopper, tube or platform feeders); Pure Harmony (high quality pet food that provides grain-free options using meat, poultry or fish as the first ingredient; and Wide Awake (ready to drink coffee beverages). DeCA partners with retailer SpartanNash on its private brands.  “Our customers will see some of our leading private label products in several categories put together in a unique sales promotion,” said Tracie Russ, the agency’s sales director. “This sale brings together the best of all worlds – quality products at deeper savings, video recipes and more.”

Temporary COVID commissary closure.  Joint Base Lewis-McChord’s Lewis Main Commissary reopened yesterday after being shut down last weekend by a coronavirus infection. Saturday, base officials announced that a commissary employee had tested positive for the virus— the employee reportedly took the test Friday, and received results Saturday, forcing officials to close the commissary immediately and prepare for a deep cleaning Sunday.

Commissary curbside push.  We are hearing that the leadership of DeCA is examining ramping up e-Commerce purchasing to include curbside service.  ALA’s Commissary Council is working with DeCA to promote the service at new sites with industry promotions.  ALA’s Larry Lapka interviewed the head of DeCA’s curbside program Willie Watkins.

With customers looking for both convenience and safety when doing their exchange and commissary shopping, the need for new and innovative pickup options became greater than ever before when the COVOD-19 pandemic enveloped the world late last year and during the entirety of 2020.

Curbside pickup had been around in various forms for a number of years, but once the coronavirus struck, it almost seemed to be the safest way to get the needed items that families desired.

“Curbside pickup provides an additional way for authorized commissary patrons to access their well-deserved benefit, and in turn, it provides our store staff an additional option to drive sales,” Watkins said. “Our CLICK2GO program factors greatly in DeCA’s future digital migration. As we continue to deploy our Enterprise Business Solution (EBS), even more options will become available.”

Not all stores are currently able to offer this option to their customers. “A variety of factors, such as sales and transactions, existing infrastructure and demographics are being used to determine if a commissary will be suitable for CLICK2GO,” Watkins said.

The agency currently offers CLICK2GO at Fort Eustis, NAS Oceana, Fort Belvoir, MCB Quantico and Fort Lee, all in Virginia; McGuire AFB, N.J.; and Charleston AFB, S.C.

There are plans to offer the service at three more commissaries later this year: Minot AFB, N.D., and Offutt AFB, Neb., in October and NAS Jacksonville, Fla., in December.

Watkins added that Fort Polk, La., “is pending assessment from Hurricane Laura,” and “other stores are scheduled to come next year as we roll out our new business and front-end systems.”

Each CLICK2GO service is customized to serve a particular location. “If the demand calls for it, DeCA will adjust its service accordingly,” Watkins noted. “For example, the Fort Belvoir Commissary increased the service capacity of CLICK2GO at the end of March as customers turned to online shopping during the COVID-19 outbreak. The store experienced an increase in curbside orders, so DeCA boosted its capacity about 35 percent, adding 100 more pickup times during a week.”

At those installations that offer curbside pickup, Watkins said authorized commissary shoppers access the service through DeCA’s CLICK2GO page on commissaries.com.

“Customers use a computer or mobile device to make their orders online, where they select from commissary products offered based on the store’s stock assortment,” he explained. “After products are selected, the shopper selects a pickup time and completes the checkout process. At their appointed time, they park in designated parking spaces, where commissary workers bring their groceries and complete the transactions.”

A $4.95 service fee is applied for each order except for the first 30 days of a new deployment, when the service fee is waived.

“The commissary has the Rewards Card program, so patrons can load up their coupons, and the CLICK2GO staff uses them for customers while filling orders, and the staff also picks coupons on the shelf for curbside shoppers,” Watkins explained, adding that most items sold in the commissary are available through CLICK2GO.

The executive noted that safety is the most major priority in the program, for both patrons and store personnel. “All employees engaged in CLICK2GO use proper face coverings and protective gloves,” he explained. “They also ensure all surfaces that come in contact with customer orders are wiped down throughout the process.”

Watkins reported that online ordering and curbside pickup “increased significantly” at the height of the pandemic; he said that curbside sales increased by 11 percent “at one of our CLICK2GO locations,” and approximately 2 percent of sales are derived from curbside pickup.

Watkins said that that percentage has held steady over the course of the past few months, and convenience “has always been the No. 1 driver” for the success of CLICK2GO.  “Of course, customers appreciate that they can do their grocery shopping and pick them up without having to go inside,” he said. “Since the pandemic, more and more people are taking advantage of the convenience and social distancing that CLICK2GO provides.”  At the present time, delivery services are not offered to patrons. “Delivery is impractical to implement logistically,” Watkins noted.

“For example, during the month of March, Fort Detrick, Md., conducted over 15,000 patron transactions, and of these, 60.64 percent were from military retirees,” Watkins said. “Approximately 420 retirees shopped at the commissary every day.

“As Fort Detrick is a small store, with a limited number of employees, it would create a real burden on these employees to try and maintain the processing of the remaining 39.36 percent of customers and run a veritable curbside pickup process. There simply are not enough employees to establish, monitor, and run this type of effort.”

DeCA’s curbside program enters a rapidly evolving commercial marketplace. 

  • The US retail grocery marketplace has become a severely competitive marketplace and is now dominated by large and strong regional players.
  • Amazon and other E-commerce CPG players have become very aggressive and gaining share
  • Consumer shopping behavior is rapidly evolving.
  • Technology has become more advanced and is a core part of today’s marketplace
  • On-Line ordering has progressively gained acceptance
  • Curbside & Delivery has captured roughly 1% per year with 6.4% in 2019
  • COVID, as with most crisis events, has accelerated a trend already in motion.
  • Current forecasts all indicate that 20-25% of all grocery sales will be Curbside/Delivery in next 2 years
  • his is the “Retail Battlefront” of this generation.  This type of event has not happened in many decade
  • Retailers are pouring massive resources to gain/maintain share
  • A Retailer must conform to the Consumer because they will seek those Retailer that do
  • Everyone is racing to capture the Consumer’s “Share of Wallet”
  • Retailers with just a brick & mortar strategy will not succeed
  • This is the “Retail Battle of the Decade” and the winners will dictate the “Shape of Retail” in the future
  • This month, Walmart launched its subscription Walmart Plus, for $98/year-unlimited delivery & discounts on gas
  • In May, InstaCart hired 550,000 employees
  • Target reports 141% sales increase and expands Curbside to 3,000 stores
  • Aldi expanded curbside to 600 of its stores
  • Amazon (B2C) is coming the other way by expanding its brick & mortar play with Whole Foods
  • Walmart is hiring an incremental 100,000 and almost all stores now have curbside
  • Target reported a 141% increase in Ecommerce sales and have expanded to 3,000+ stores
  • Walmart is going directly after Amazon Prime with Walmart Plus…Major Battle will ensue
  • This is a rapid 13% -18% shift in market share to Retailers with On-Line Strategies
  • Those without a Curbside Strategy will lose an incremental 13+% year-over-year•
  • Target said its digital sales growth accelerated from 33% in February to about 100% in March to 282% in April, for a total first quarter e-commerce increases of 141%

Driving sales. Bruce Cameron, an Army & Air Force Exchange Service (AAFES) driver who rides out of the Waco Distribution Center in Texas, was named a 2020 All-Star Driver by the National Private Truck Council (NPTC). He is the Exchange’s sixth driver in the past 11 years to earn All-Star status.  The NPTC, a trade association that advocates on behalf of private trucking fleets and their drivers, co-sponsors the award along with International Truck/Navistar. The All-Star designation recognizes 100 drivers who have exhibited an exceptional commitment to safety, compliance and customer service from June 2019 through May 2020.  “It’s an all-encompassing nomination process that looks at a driver’s record — safety on the job, injuries, traffic history and compliance with internal policies,” said Col. Douglas Vallejo, the Exchange’s deputy director of Logistics. “Bruce’s record shows a totality of excellence and a commitment to living up to Exchange values to serve those who serve.”

Meat packing plants stabilizing.  Another wave of coronavirus-driven closures of meatpacking plants is unlikely because worker testing and safety practices have improved since the spring.   Major meat companies have installed automated temperature checkpoints, distributed safety gear to plant workers and installed partitions between some workstations to catch Covid-19 symptoms and prevent its spread in plants. “I’m pretty confident we are not going to have the size of the disruption we saw in April and May,” said JBS CEO Andre Nogueira at The Wall Street Journal’s Global Food Forum, held remotely on Monday.

AAFES-run military Star card rates the highest on a survey of the best cards.  A survey released this month found that the interest rate of 10.24 bests all other store cards.  The Star Card offers a variety of programs to aid distressed military and their families as well.

Uniform contractor indicted.  An operations manager of a North Dakota-based company that sells clothing and others items to the U.S. military, U.S. government, police, and others, has been indicted by a federal grand jury in Providence, RI, for his alleged role in a conspiracy that sold more than twenty million dollars-worth of counterfeit goods to military and government purchasers.  It is alleged that Terry Roe, 48, of Burlington, ND, conspired with at least one other individual, Ramin Kohanbash, 50, of Brooklyn, NY, to obtain counterfeit clothing, apparel, and gear. Kohanbash in turn worked with Bernard Klein, 39, also of Brooklyn, to arrange for these goods to be manufactured in China and Pakistan and imported into the United States. The indictment alleges that Roe, and others working at his direction through his position as an operations manager for the North Dakota company, then arranged for these counterfeit goods to be sold and delivered to the U.S. military, and other government and law enforcement agencies, including to the Rhode Island National Guard in East Greenwich, RI, as part of an investigatory controlled purchase. As alleged, Roe and others working at his direction falsely represented to the U.S. military and its suppliers that the counterfeit goods were manufactured in the United States as required.

What’s hot and what’s not?  Cortera, a data company that tracks US businesses reports that within the reshaped landscape, some companies have adapted faster than others.

  • As foot traffic evaporated, Chipotle Mexican Grill Inc. saw online orders more than triple in the second quarter, rising to 61% of total sales from about a quarter. The chain added staff and said it would include drive-through “Chipotlanes” at most new restaurants.
  • Lululemon Athletica Inc., after closing stores in the spring, was able to capture purchases by Americans working from home and eager for more comfortable “athleisure” clothing. The seller of high-end yoga pants embraced the shift to at-home fitness by buying Mirror, a startup that sells Internet-connected equipment and class subscriptions.  Other companies found the virus stoked demand for their wares.
  • Spending by data hosting and processing companies rose 7% in April, from a year earlier, and slightly in May, as consumption of cloud services soared. Supermarket business thrived as families ate at home more and stockpiled staples.
  • Electronics retailers saw business rise as people worked from home and went out for entertainment less.  Home-improvement chains like Home Depot Inc. and Lowe’s Cos. saw business soar as home-bound Americans went to work on their lawns and spare rooms and the housing market boomed.
  • Walmart Inc. and rival Target Corp. recorded year-over-year sales jumps as Americans stocked up on essentials and turned to their e-commerce offerings. Amazon.comInc. said last month that it would hire 100,000 more employees across North America.
  • Oxford Economics reports some types of businesses are unlikely to recover before 2024, the firm says, citing textiles and apparel, electrical equipment and appliance manufacturing as well as the petroleum, mining and coal industries. It could take until early 2022 for U.S. manufacturing to return to late-2019 levels, and until the end of next year for retailing and transportation, the firm says.
  • Broadly, sales and profits are showing signs of recovery. Retail sales have grown for four months straight through August, but the pace of that growth has slowed significantly.

Best regards,

Steve Rossetti

President

From the desk of the ALA President

Resale Resurgence is the theme for this year’s ALA virtual annual convention to be held October 20 and 22.  Because of the rapid moving parts of the resale program, the agenda for the event is being assembled in real-time and will highlight all of the great efforts of commissaries and exchanges to weather the pandemic and boost business both during and after COVID.  Resale resurgence is real: There has been a surging emphasis on building sales at DeCA with DeCA leaders and business managers revitalizing the partnership with industry to get patrons back to the stores, boosted by increased activity of ALA’s commissary and exchange councils.  Exchanges are powering up their promotional programs as well.  The conference builds on joint business planning sessions already held by ALA and DeCA and other business building cooperative ventures between ALA and the exchanges.  And, as mentioned below, Congress and the Administration and Defense leadership are stepping forward, recognizing the contributions that these programs make and putting their shoulder to the wheel as well.  We’ll be discussing what is happening with business both inside and outside the gate both in the pandemic and post pandemic world.  Speakers are being confirmed but include leaders from the resale programs, DoD and the Administration, industry experts, base access experts, media and family advocacy leaders.  Registration details have been distributed.    An ALA membership business meeting will be held on October 19.  Contact Bob Ellis at bellis@ala-national.org .

Happy New (fiscal) Year…Continuing Resolution fund Government until at least December 11.  Commissary and exchange business will continue uninterrupted at least for a couple of months as the Senate passed and the president signed on October 1 a bill to keep the Federal Government open until at least December 11.  Appropriations for the Government expired on September 30 and unless the Congress acted, the Government would have had to shut down.  This didn’t happen.  This means that DeCA will be funded at last (fiscal) year’s levels plus another $34 million that was appropriated to DeCA in the first pandemic stimulus bill that passed earlier this year.  Exchanges get funding for transportation of products overseas and these funds will also continue to flow under the Continuing Resolution.  Exchanges and other NAF programs of the DoD are getting appropriations to cope with the pandemic, but these funds are being provided by the Services and DoD from money Congress allocated in the first pandemic stimulus bill, a move supported by ALA and endorsed by Congress.  $300 million was provided for the first two months of the pandemic and more funding from the first stimulus bill is in the pipeline.  Because funds were directly appropriated to the Army, Navy, Air Force and Marine Corps, they have to be “reprogrammed” to be provided to offset pandemic costs by the exchanges.  So far, the Navy and Marine Corps leadership have done with Army and Air Force funding reportedly beginning to flow.

$140 million provided to offset VCS losses.  The Continuing Resolution contained a major lifeline–supported by ALA–for the hard-pressed Veterans Canteen Service by providing $140 million to underwrite VCS operations and offset pandemic costs.  VCS has been struggling after the pandemic reduced patient and visitor flow to the VA hospitals around the Nation.  Ray Tober, head of the VCS will speak at the ALA’s Annual Conference and discuss their pandemic experience and the noble efforts of the VCS leadership and workforce to continue the great work of this organization.

House-passed bill includes $1.4 billion for exchanges and other Defense NAF programs. In a remarkable and welcome move, one that is endorsed by ALA, the House passed a massive pandemic stimulus bill called “Making Emergency Supplemental Appropriations for the Fiscal Year Ending 2021 and for other Purposes.” that includes $1.4 billion for helping exchanges and other NAF programs of the DoD to cope with the pandemic.  A press release from the House appropriators said:

$1.4 billion for salaries and other needs of over 55,000 base employees of childcare centers, lodges, food operations, exchanges and other recreational activities that are normally paid by revenue.” The legislators have asked the DOD for a plan how they to allocate the funding.

It’s far from a done deal.  Agreement by the Senate and enactment of the House bill is uncertain as negotiations between the White House and the Senate continue.  Regardless of how the bill progresses, it represents a clear and unequivocal statement by the Congress of the critical contribution that these programs provide to the National defense mission.

Here’s the paraphrased House legislative language providing the funding: SEC. 301. For an additional amount for ‘‘Operation 12  and Maintenance, Army’’, $400,000,000, to prevent, prepare for, and respond to coronavirus, domestically or internationally: Provided, That such amount shall be used for necessary expenses, including salaries, cleaning, utilities and personal protective equipment, for recreational entities, childcare development centers and other entities affected by the coronavirus that derive funding from non-appropriated accounts: Provided, That prior to the obligation of such funds the Secretary of the Army shall submit to the Committees on Appropriations of the House of Representatives and the Senate a spend plan on the use of funds made available by this section: Provided further, That such amount is designated by the Congress as being for an emergency requirement pursuant to section 251(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Control Act of 1985  The $1.4 billion breaks down like this: Army, $400 million; Navy, $400 million; Air Force, $500 million; Marine Corps, $100 million.  Besides the $1.4 billion for NAF programs, the DoD got $320 million in the bill for their operating accounts. 

Better together.  Congratulations to NEX and MCX on their new joint e-commerce website designed to bring both Navy and Marine Corps customers a world-class online shopping experience. The new co-branded site will officially launch with a combined marketing campaign called #BetterTogether. This campaign will kick off on the Navy’s birthday, Oct. 13, and run through the Marine Corps’ birthday on Nov. 10. This campaign includes a virtual concert series, virtual 5k and a kids’ baking competition, as well as a joint Navy-Marine Corps Relief Society fundraising effort. In-store signage will also announce the collaboration in both NEX and MCX locations starting Oct. 1.   October 1 marked the launch of the Navy Exchange (NEX) and Marine Corps Exchange (MCX) online retail and uniform stores transition to a new unified online e-commerce portal at myNavyExchange.com.

As part of the collaboration, myNavyExchange.com will undergo a design change to reflect the new co-branding, as well as add a new wealth of product assortments and an expansion in several areas including: Tactical gear, male and female Marine uniform assortments, sports nutrition, and  Marine Pride merchandise.

“We have always embraced the time-honored bond between the U.S. Navy and U.S. Marine Corps, and we believe this joint partnership will forge a stronger, higher-quality experience for our online customers,” said retired Rear Adm. Robert J. Bianchi, CEO, Navy Exchange Service Command. “The decision to partner under one website will create better alignment and additional resources for our joint patrons.”  “The U.S. Marine Corps and U.S. Navy are a combined force when serving our country, and we are thrilled to bring that spirit of partnership and collaboration to this strategic alliance,” said Cindy Whitman Lacy, CEO, Marine Corps Business and Support Services Division. “We are especially thrilled to be adding the option of order online and pick up at your MCX as an added convenience for our Marines and their families.”

All authorized customers who currently shop on the myNavyExchange.com site will be able to access the redesigned site using their existing accounts. MCX customers will need to setup a new account on the myNavyExchange.com site if one is not already established. Additionally, while both organizations will continue to promote the #BetterTogether initiative, MCX and NEX will still continue independent marketing and social media channels.

Best regards,

Stephen Rossetti

President

Presidents Message/Washington Update 10/1

Congress recognizes plight of exchanges and MWR programs with $1.4 billion. ALA has been actively advocating for supplemental funding to offset the losses experience by exchanges and other nonappropriated fund programs in DoD.  Hundreds of millions are already flowing from the first round of stimulus money that Congress enact this year to the Navy and Marine Corps in particular and lately beginning to flow to the Army and Air Force.  .  And, now, in an additional, major and unprecedented recognition of the need for and the plight of NAF programs, the House, in its latest version of the $2.2 trillion pandemic stimulus legislation has allocated $1.4 billion for salaries and other needs of over 55,000 base employees of childcare centers, lodges, food operations, exchanges and other recreational activities that are normally paid by revenue generating accounts that have been detrimentally impacted by the pandemic.  House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are making a last attempt at forging another coronavirus relief deal.  The House will probably pass the bill tomorrow and toss it to the Senate.  The bill also includes funding for Defense operating funds that can be used for supply chain enhancements including funding for supply chain difficulties.  We commend and thank the House appropriators and the House leadership for recognizing these programs.  We also commend the Defense leadership including Secretary of  Defense Mark Esper, Deputy Secretary of Defense David Norquist, and Under Secretary of Defense Matthew Donovan for recognizing the need to augment NAF programs during the pandemic. We urge all Service Secretaries to use their authority to flow funding to their respective exchanges.  The bill is 2,152 pages long in case anyone has some spare reading time. 

Government shutdown avoidance bill is set to move today.  The Senate is expected to move a government funding measure today to keep the government open until at least December 11.  The bill is expected to include $140 million in much needed funding for the Veterans Canteen Service, funding that was included in the House bill passed last week. 

One Family, One Mission program launched by resale agencies.   ALA is participating with its resale partners in the launch of a program to boost business and enhance collaboration.  The “One Family, One Mission program includes CGX, MCX, AAFES, NEXCOM, and DeCA. 

The program will be discussed at the upcoming ALA Annual Conference to be held virtually on October 20 and 22.  According to a joint letter signed by all of the senior marketing and operating officers of the agencies, the program launches with a Veterans Day promotion.  The launch letter describes the program as an “all hands on deck call for support to make the “In Recognition Of” celebration one to remember.”  The launch letter says: “As the world and our armed forces continue to navigate COVID-19, military resale and its vendor partners have leaned forward to strengthen support of Warfighters and their families. Thank you for all you have done, and continue to do, to support every member of the military community during this extremely challenging time.”  The letter further states: “Our goal is to acknowledge the service and sacrifice of service members through this special virtual event featuring musical performances from top artists, intimate conversations with true heroes and a fun and fitness challenge to bring the military community together.”  “These efforts will be broadcast through all military resale social media and extensively promoted through print, digital, in-store signing and PA channels, to maximize brand visibility, community goodwill and positive consumer perception.”  ALA will be participating as a sponsor and urges all member companies to get behind the effort.  A copy of the letter appears below: 

DeCA brings grocery expert on board as Chief Transformation Officer, Grocery Operations.  Last month I reported that DeCA was looking to gain additional grocery management expertise by hiring what is in Government parlance a “Highly Qualified Expert” as Chief transformation Officer, Grocery Operations.  We have learned that the person selected for the job is Jim Flannery.  Mr. Flannery comes from the private sector, most recently as CEO of Summit Ventures.  Linked-in describes Summit Ventures as “experienced business to consumer and business to business consulting”.   He spent 36 years at Procter and Gamble as Managing Director for their Customer Development focusing on “commercial collaboration efforts and the internal capabilities required to deliver them.”  Before going to Summit Ventures, he worked for five years at the Grocery Manufacturers Association which relaunched itself in January of this year as the Consumer Brands Association where he led work to launch a program to enable consumers to get access to information about hundreds of attributes on food, beverage, personal care, household product and pet care products. 

According to the position announcement; “The employee will advise and drive the DeCA leadership to embrace and pursue reform within the enterprise. This will include setting the conditions to empower and favor individual contributor’s ideas over the rigid processes and tools that prevent creative thinking. The employee will capitalize on outside expertise in the grocery industry and the respective Associations that support the supply chain and marketing industries.”

Among the duties set forth in the position description, Mr. Flannery would:

·      Work with and directly for the Director / CEO of DeCA to develop high quality business strategies and plans.

·      Build relationships of trust with key partners and stakeholders, to include suppliers, manufactures, and distributors

·      Be the lead executive in implementing the Community Services Reform transformation plan according to the Business Case Analysis presented by the Office of the Chief Management Officer.

·      Oversee operations and business activities to ensure they produce the desired results and are consistent with the overall strategy and mission of the agency and various studies (i.e. achieve the mandated savings targets currently set at 23.7%)

·      Establish professional contacts with high-level executives and representatives of industry partners, trade and professional associations, veterans and military service organizations, and special interest, constituent, and advocacy groups

·      Meet with industry experts to discuss innovations in the grocery business, and the impact COVIV-19 had on the industry and how DeCA can position itself to take advantage of industry and consumer shopping pattern changes. 

·      Assist the Executive Resale Board in implementing ideas from the Reform Group

·      Work with DeCA leadership to draft, if necessary, legislation to enable a more flexible and agile DeCA and commissary operations

This position will be located in (DeCA), an agency of the Department of Defense (DoD), aligned to the Office of the Assistant Secretary of Defense for Manpower and Reserve Affairs (OASD(M&RA)), within the Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)). 

New defense official nominated by POTUS for oversight of resale programs.    Speaking of OSD (M&RA): DeCA reports to the Department of Defense through two channels.  As a Defense Agency, it falls under the Defense efforts to reform “4th Estate” entities of the DoD.  As a quality of life program, it falls under the Under Secretary of Defense for Personnel and Readiness. (USD P&R) The USD (P&R) also issues policy for exchange operations and coalesces cooperative efforts through an Executive Resale Board. 

Ms. Vee Penrod has been working in the role as Acting Assistant Secretary for Manpower and Reserve Affairs.  She also served as the DeCA Director before Mr. Bill Moore came on board last month, with Admiral Rob Bianchi (USN-ret.) serving as both the ”Special Assistant for Commissary Operations” and the NEXCOM CEO. 

Now, President Trump announced yesterday that he will nominate Brian Davis to be the assistant secretary of defense for manpower and reserve affairs.  Davis currently serves as the Director of the Defense Personnel and Family Support Center for the Department of Defense.  He is an Air Force Command Pilot and served in various command position for the Air Force.   His confirmation hearing before Senator Jim Inhofe’s’ Armed Services Committee has not yet been set.  Until he is confirmed by the Senate, Ms. Penrod will expect that Ms. Penrod will continue in the acting role. 

AAFES Executive promotions and assignments:

Chad Lucas to position of Senior VP for Information Technology

Sean Applegate, Business Development Manager, Exchange HQ, Customer Experience Directorate to ECommerce Operations Manager, Exchange HQ, Customer Experience Directorate.

Keola Chan, General Manager (Dual), JB Charleston Exchange, Eastern Region to General Manager, Wright Patterson AFB Exchange, Central Region

 Bettina CicirielloFrederick Program Specialist, Exchange HQ, Executive Group to the position of PB 5/1, General Manager (Dual), Dyess AFB Exchange, Western Region

Tammy Hairston, Store Manager (MS), Wright Patterson AFB Exchange, Centra Region to General Manager, Hill AFB Exchange,

Christel Kelly, Sales & Merchandise Manager, JB Fort LewisMcChord Exchange, Western Region to the position of PB 5/1, General Manager (Dual), Denver Consolidated Exchange (DS: Buckley AFB), Western

Jerry Myers, Financial Systems Administrator, Exchange HQ, Finance &Accounting Directorate to Financial Analysis Manager, Exchange HQ, Finance & Accounting Directorate.

Jessica Provan, Sales & Merchandise Manager, Fort Hood Exchange, Central Region to Store Manager (MS), EUCOM Consolidated Exchange (DS: Panzer), Europe Region 

Brian Read, General Manager (Dual), Grand Forks Exchange, Central Region to General Manager, Minot AFB Exchange, Central Region in October 2020.

Patricia Tinker, General Manager (Dual), Dyess AFB Exchange, Western Region to Store Manager (MS), Fort Bliss Exchange, Western Region

Jermaine Wilson, General Manager, Wright Patterson AFB Exchange, Central Region to General Manager, Fort Riley Exchange, Central Region

Thea Sarver General Manager, JB Andrews AFB Exchange, Eastern Region to General Manager, Fort Buchanan Exchange, Eastern Region 

Nanami Taniguchi, Store Manager (MS), Fort Leonard Wood Exchange, Central Region to Store Manager (MS), Hawaii Consolidated Exchange Schofield Barracks), Pacific Region.

Stephanie Wilson General Manager, Fort Buchanan Exchange, Eastern Region to General Manager, JB Andrews AFB Exchange, Eastern Region

Resale Roundup-August 2020 ($ in thousands)*

Service              Aug. 20                Aug. 19           Diff.               FY20 YTD              FY19 YTD             Diff.

AAFES            $572,593             $638,147        -10.3%            $4,162,642           $4,730,249          -12.9%    

 

NEXCOM           163,316               183,674        -11.1%              1,195,159             1,313,374           -9.0%    

 

MCX                 58,026                64,720        -10.3%                439,115               484,388           -9.4%    

 

VCS                  25,110                38,820        -35.3%                190,514               288,105          -33.9%    

 

CGX                  16,778                12,921       +29.9%                108,268                 91,570         +18.2%    

____________________________________________________________________________________________

 

Service              Aug. 20                Aug. 19           Diff.               FY20 YTD              FY19 YTD             Diff.

DeCA             $346,785             $385,172        -10.9%            $4,173,615           $4,137,299           +0.9%

 Note: AAFES’s sales figures are cumulative, and include direct sales.

* Fiscal years vary by service, as do computation methods. Sales figures are provided by the services on a monthly basis. Some information provided by the services reflects incomplete sales totals or flash figures. Audited figures are used when provided by the services. Sales figures are approximate and are rounded off. AAFES, NEXCOM, MCX and CGX sales totals include gasoline, and fluctuations in prices can impact monthly and yearly performance. Most exchange sales do not include concession sales. All year-to-date charts on this page refer to the month shown in this table unless otherwise specified. Totals may not agree because of rounding.

And by the way, we see conditions changing across the country all the time, and so you will see, in some cases, condition levels going up or going down based on what they see, again at the local installation and the capabilities they have at that installation, and then what’s happening in the state in which they are located. Or if they’re overseas, if they’re OCONUS, what’s happening in the country in which they are located.

 And by the way, we see conditions changing across the country all the time, and so you will see, in some cases, condition levels going up or going down based on what they see, again at the local installation and the capabilities they have at that installation, and then what’s happening in the state in which they are located. Or if they’re overseas, if they’re OCONUS, what’s happening in the country in which they are located.  Secretary of Defense Mark Esper at a DoD Town Hall Meeting last week. 

 Well, the short answer is yes, at some point in the future these restrictions will be lifted. But for right now, and you said, ‘the foreseeable future,’ for right now, it’s conditions-based, and it depends on where you are, what the situation is at your local camp, post, station, ship, et cetera. But we have to be mindful that the number one priority is the health and safety of the force writ large. So, we know, we know factually that masks work. We know that social distancing works. We know that proper sanitation and hygiene and washing of hands, we know those things work, so we’re going to continue to do those.

In the meantime, we’re also developing a vaccine. You’ve heard about Operation Warp Speed. That is on the fast track. I fully expect that we’re going to have successful, safe and effective vaccines in the near-term. I don’t know what that means in terms of exact numbers, but sometime in the fall and towards the end of the year you’re going to see vaccines rolling out that will be administered to various parts of the population and the military. The numbers will increase as we get into the winter and the spring. You’ve heard, probably, the CDC and other officials talk about that.

So, you’ve got the vaccine out there, and that’ll eventually be a great solution, and it will defeat the COVID virus over time. But in the meantime, we’re going to have to maintain our restrictions that we have and continue to enforce the self-discipline that we use for masks and hygiene and social distancing and so on and so forth. And it’s all very, very locally dependent. It depends on where exactly you are, and the commanders will make those calls.   General Mark Milley, Chairman of the Joint Chiefs of Staff at a recent DoD Town Hall meeting

In a matter of 90 days, we have vaulted forward 10 years in consumer and business digital adoption.  From McKinsey consultants commenting on the need for agility and speed in grocery evolution

The foundation of all of these efforts is product availability,” she noted. “You will see this theme through all of the teams, through all of the plans. It might not be called ‘product availability,’ it might be reflecting as ‘reducing slow movers,” or taking action on ‘H-coded’ items, or quickly moving through ‘P-coded’ items … these are all items taking space at our distribution point, in our warehouses, and most importantly, on our shelves.   DeCA’s Director of Sales Tracie Russ at ALA and DeCA’s Joint Business Planning Conference. 

 Amazon has been really respectful of the Whole Foods culture. They’ve let us be ourselves. At the same time, there are things that Amazon does better than Whole Foods does. One of the reasons we wanted to do this merger is we saw Amazon as a technology leader, and Whole Foods was just a follower. Since Covid struck, our online sales have tripled. Could we have done that prior to Amazon? No way. From the very first day we merged with them, they pushed us to make the changes we needed to be more effective at online delivery.Another thing Amazon has changed is that our culture at Whole Foods tended to be intuitive, managing more by the gut. Amazon is very much a company that manages through data. And if you don’t have good data and good arguments, then that’s the end of the discussion. That’s been a positive change for our company because we are making more data-driven decisions than we made previously, and, therefore, I think we’re making better decisions.  James Mackey, Founder of Whole Foods, reflecting on the August 2017 merger of the company with Amazon.

 ShopCGX.com, the online store of the CGX, has experienced unprecedented growth in 2020. Through August, sales online are 300 percent above last year for the same period, as many new customers have visited the site for the first time and chose to make purchases safely and securely from home during the pandemic.’  Hope Thompson, Director of Ecommerce, Coast Guard Exchange (CGX)

 ALA’s annual conference is continuing to come together.  Registration details are on the way for ALA’s virtual conference planned for October 20 and 22.  The event will include speakers from the Department of Defense, resale agencies and the Congress.  There are a lot of moving parts in the system and the Convention will cover all of it. 

Overheard.  Word is that the Department of Defense is looking to adapting their identification and base access strategies to adapt to the deployment of the vaccine with great implications for on-base access.  Base access is going to be a major topic at the ALA’s Annual Convention on October 20 and 22 and officials from the DoD’s Defense Manpower Data Center are being asked to participate to brief attendees on this and other base access developments. 

Government shutdown update.  It looks like we have a deal.  The House has passed a “continuing resolution” that keeps government open until at least December 11.  The Senate is expected to act today and tomorrow to pass a similar measure.  Commissary operations would not be disrupted, and Federal planners have not even begun to develop contingency plans for a shutdown, indicating that the deal is done.  The continuing resolution is especially critical for the Veterans Canteen Service because a provision in the bill allows for the transfer of $140 million to augment their operations and avoid major layoffs and curtailment of operations. 

Two issues in Defense bill being tracked and worked by ALA that would have an effect on industry.  One is a provision that would require regular reports from all companies doing business with exchange and commissaries on their use of goods made in the Xinjiang Uyghur Autonomous Region (XUAR) imported into the United States and sold in the military commissary and exchange systems are not made with forced labor.  ALA is concerned about the burden placed on companies and the fact that companies doing business with exchanges and commissaries are being singled out when other companies in the U.S.   are not.   

 Another issue we are tracking, and working is food ingredient labeling.  Here’s the text of the House and Senate versions. 

 Senate–SEC. 381. CLARIFICATION OF FOOD INGREDIENT REQUIREMENTS FOR FOOD OR BEVERAGES PROVIDED BY THE DEPARTMENT OF DEFENSE.

(a) IN GENERAL.—Before making any final rule, statement, or determination regarding the limitation or prohibition of any food or beverage ingredient in military food service, military medical foods, commissary food, or commissary food service, the Secretary of Defense shall publish in the Federal Register a notice of a preliminary rule, statement, or determination (in this section referred to as a ‘‘proposed action’’) and provide opportunity for public comment.

(b) MATTERS TO BE INCLUDED. —The Secretary shall include in any notice published under subsection

(a) the following:

(1) The date of the notice.

(2) Contact information for the appropriate office at the Department of Defense.

(3) A summary of the notice.

(4) A date for comments to be submitted and specific methods for submitting comments.

 The House version of the NDAA includes the following provision.  NOTICE AND COMMENT FOR PROPOSED ACTIONS OF THE SECRETARY OF DEFENSE RELATING TO FOOD AND BEVERAGE INGREDIENTS.  

(a) NOTICE AND COMMENT.—Before promulgating any service-wide or Department-wide final rule, statement, or determination relating to the limitation or prohibition of an ingredient in a food or beverage item provided to members of the Armed Forces by the Department of Defense (including an item provided through a commissary store, a dining facility on a military installation, or a military medical treatment facility), the Secretary of Defense shall—

(1) publish in the Federal Register a notice of the proposed rule, statement, or determination (in this section referred to as a ‘‘proposed action’’); and

(2) provide interested persons an opportunity to submit public comments with respect to the proposed action.

(b) MATTERS TO BE INCLUDED IN NOTICE. —The Secretary shall include in any notice published comment period would be limited to ingredient decisions that span an entire Service, or Department (of Navy, of Air Force, of Army, of Defense). The intent is to allow small-unit or individual bases or forward-deployed locations to make ingredient decisions that would have no effect on other bases or locations. However, were a Service or Department to make a proposed ingredient, the rule that would go into effect for the entire Service or Department

Trump Administration filling three positions that will influence resale programs.  Rear Admiral (Ret.) Jon C. Kreitz, of Virginia, to be an Assistant Secretary of the Air Force (Manpower and Reserve Affairs).  Kreitz was most recently the Deputy Director for Operations of the Defense POW/MIA Accounting Agency, where he led daily operations spanning the Indo-Pacific, Americas, Europe, North Africa, and the Middle East.  Previously, Rear Admiral Kreitz served as the President of the Board of Inspection and Survey within the Department of the Navy. 

Matthew B. Shipley is being nominated as Assistant Secretary of Defense for Readiness.  He currently serves as the Deputy Assistant Secretary of Defense for Force Readiness.  Prior to this role, Mr. Shipley served as the Military Legislative Assistant to Senator Ted Cruz, where he advised the Senator on a broad portfolio of veterans’ affairs, foreign affairs, and national security matters. 

Michael Rigas, of Massachusetts, to be Deputy Director for Management, Office of Management and Budget.  Rigas currently serves as the Acting Director of the United States Office of Personnel Management (OPM). He also recently served as the Acting Deputy Director for Management of the United States Office of Management and Budget (OMB).

Congratulations to DeCA on 29 years.   October 1 marks DeCA’s 29th year in existence.  “Throughout its history DeCA has earned a great reputation for serving the military community in good and bad times,” DeCA Director Bill Moore said. “Our employees have shown their dedication and innovation, combined with the support of our industry partners, in keeping commissary shelves stocked amid the COVID-19 pandemic.”

Senate emphasis on resale loyalty programs.  In its report accompanying the fiscal year 2021 defense policy bill, the Senate Armed Services Committee included the following.  Military commissaries offer many benefits to their patrons through the Commissary Rewards Program, such as digital coupon offers, digital receipts, and at-cashier discounts. To improve sales and revenues at commissaries and military exchanges, the committee encourages the Military Exchange Service to adopt a loyalty program using lessons learned from the Defense Commissary Agency. The committee believes that both retail venues would benefit from cross-linking loyalty programs, which would further incentivize commissary customers to patronize both commissaries and exchanges. Similar loyalty programs in the private retail industry have proven to be highly successful in expanding sales. “

Amazing Amazon.  Amazon has added 50 million prime members since 2018 and now has 150 million, paying $119 a year.  Sold 175 million items on Prime Day last year.  Will expand its fulfillment footage by 50 percent this year

Another sales surge?  Military commissaries experienced a sales surge in March and April when the pandemic was kicking into full stride.  And, suppliers to the stores were slammed with increasing competition and demand from commercial accounts and worked hard to meet commissary demand as well.  Now, another sales surge is looming, and commissary suppliers and distributors are working to avoid the same problems that affected operations in the Spring.  Military distributors have stepped up with strict sanitation and other COVID prevention measures in order to ensure that the vital supply hubs are not compromised, especially for long-lead shipments to military overseas.  Supermarkets are stockpiling groceries and storing them early to prepare for the fall and winter months, when some health experts warn the country could see another widespread outbreak of virus cases and new restrictions.  Southeastern Grocers LLC secured holiday turkeys and hams over the summer, months before it normally starts inventory planning, said Chief Executive Anthony Hucker.  Grocery wholesaler United Natural Foods Inc. has loaded up on extra inventory of cranberry sauce, herbal tea and cold remedies, said President Chris Testa.  Associated Food Stores recently started building “pandemic pallets” of cleaning and sanitizing products so it always has some inventory in warehouses.  These changes, a reaction to the sudden and massive shortages grocers experienced in the spring.   Now, food sellers are stockpiling months, rather than weeks, worth of staples such as pasta sauce and paper products to better prepare for this winter, when people are expected to hunker down at home. Many retailers are expanding distribution capacity, augmenting warehouse space and modifying shifts.  A fresh increase in demand in the event that officials reinstate restrictions on restaurants or workplaces would also run up against the normal holiday boom in grocery sales, further elevating demand for items like baking products, pasta, meat and paper towels.  Ahold Delhaize, owner of the Giant and Food Lion chains, is storing 10% to 15% more inventory than it did before the pandemic to ensure it won’t run out of fast-selling items.  Industry executives say they don’t think a potential wintertime burst in grocery demand will be as extreme as it was in March, when people panic-shopped, fearing grocery-store closures or food shortages. Consumers are better prepared this time around, said Sean Connolly, chief executive of Conagra Brands.  Manufacturers have given priority to making their fastest selling products.  And, Walmart is overriding their ordering algorithms to stock up. 

Curbside catch-up.   DeCA is working to deploy more curbside locations and industry statistics show that the drive to more curb side must pick up speed if commissaries are to meet or match what’s going on outside the gate.  Reports are that the new Commissary Director, Bill Moore, is eying a speed-up in deployment of curbside service.  And it comes none too soon.  Curbside and delivery were already experiencing a significant multi-year upward trend before the pandemic.  The COVID-19 event created an “Explosive” 10X+ increase in the usage of Curbside.  Forecasts now predict 20%-25% of all future grocery sales will be curbside/delivery, one out of every four grocery dollars going forward.   This is the “Retail Battle of the Decade” and the winners will dictate the “Shape of Retail” in the future. Instacart is hiring 550,000 to support On-line Grocery. Walmart is hiring an incremental 100,000 and almost all stores now have curbside.  Target has reported a 141% increase in Ecommerce sales and have expanded to 3,000+ stores. Aldi has expanded 600 incremental stores. Walmart is going directly after Amazon Prime with Walmart Plus.  This is a rapid 13% -18% shift in Market Share to Retailers with On-Line Strategies.  Those without a Curbside Strategy will lose an incremental 13+% year-over-year.  The DeCA Consumer is even more likely to migrate to Curbside.  Over 64% are under 30 years of age.   Consumers are now establishing relationships with civilian curbside providers and these relationships are shifting brand loyalty.  These relationships will create Brand Loyalty over time.  Competitor Curbside will exceed 10,000 US Retail locations by year-end 2020 and the ability to dislodge this loyalty will be extremely difficult.

 Agility in store formats and technology is not optional.   According to McKinsey, a management consulting group, the pandemic has pushed technology and store format evolution forward 10 years within 90 days. 

As a result of the pandemic, many retailers discovered that they lacked the IT agility to implement changes swiftly and effectively, illuminating a challenge that the industry must address so it can thrive moving forward: the need for an open, flexible infrastructure that can adapt to rapidly evolving customer journeys.  Flexible technology enables retailers to introduce new shopping concepts, support new types of consumer journeys, and offer new services and technologies to enhance the customer experience.  Systems shouldn’t drive sales; sales need to drive systems.  Embracing openness allows retailers to keep up with ever-changing consumer expectations. Gone are the days of vendor monopolies and rip-and-replace of existing implementations. Future-ready retailers in the commercial marketplace are discovering that they need to be open to working with multiple vendors, open in their approach to IT infrastructure and open with regard to business processes. Being open accelerates time to market for new implementations and leads to higher business agility while lowering total cost of ownership (TCO). Openness can also reduce barriers to implementing new technologies in the context of existing IT systems.  The concept of open retailing comprises an open IT philosophy and flexible infrastructure. This platform approach, which combines open API software, a modular hardware setup and a flexible services portfolio.  According to the 2020 International Grocery Shopper and Technology Survey, conducted by Nielsen and commissioned by Diebold Nixdorf, 37% of shoppers experienced frustration due to time spent waiting in line.  Of those shoppers, 72% would prefer to use self-checkout when there’s a line — a preference shared by almost two-thirds of grocery shoppers in general. The survey also found that 57% of shoppers use some mobile device at least rarely while shopping in store, and 86% of them would be interested in using a mobile device to accelerate the checkout by self-scanning items. 79% of consumers intend to continue or increase their usage of self-checkout after the pandemic.

Food prices rose 4.6 percent in August.  Continues food inflation upward trend. 

The Pentagon announced that 117 of 231 installations, or about 51%, have lifted travel restrictions, meaning that military can change locations between these bases.    The Department of Defense deems installations where local health protection conditions are below “Charlie” as being secure for personnel movement.

A stop-movement order was put into place in March by Defense Secretary Mark Esper at the outset of the pandemic. The result of the travel restrictions has caused a major delay in permanent change of station orders.  As of last Wednesday, the DoD had 43,851 coronavirus cases, an increase of 1,892 cases during the past seven days.

Prescription kiosks may boost commissary and exchange traffic.  The Military Health System recently announced an expansion of the prescription pick-up locker, or “ScriptCenter” program, nearly doubling the number of locations that offer the self-service option, including commissaries and exchanges. The new ScriptCenter dispenses your medications while you wait. The units will also have video capabilities one day, allowing a patient to communicate directly with a pharmacist if necessary.

Patients at participating locations will be given the option to get their medication either from the pharmacy or ScriptCenter when they order refills. The ExpressScript mail-order home delivery pharmacy option will still be available.

Active-duty military, dependents, retirees and all authorized Defense Department ID holders are eligible to use the ScriptCenter. Once requested, prescription refills will be available for pickup after three duty days and will stay within the system for 14 days. If not picked up, the prescriptions will return to the pharmacy.

The ScriptCenter offers refills on most common medications; controlled substances and refrigerated medications must still be received in-person from the pharmacist.

In use by the Air Force since 2009, the locker lets users scan their government-issued ID and enter a second personal identifier, such as date of birth or fingerprint scan, to have their medications automatically dispensed to them.

ScriptCenters are normally located in places such as the exchange or commissary, which are generally open longer hours than the base pharmacy is; however, they can be located anywhere. The ScriptCenter machine is available 24/7, allowing convenient prescription pickup options for busy folks, shift workers and the parents of children (who tend to get sick only on weekends).

There are currently 27 units at Air Force bases in the U.S. and Europe, with plans to add more than 20 additional units throughout the Military Health System in the next year.

The expansion of the program depends on each location’s individual situation, such as safety and security, ease of access and availability of power and secure network communications.

Troop movements.   The Army’s fall unit rotations are out.  The 2nd Infantry Brigade Combat Team, 10th Mountain Division from Fort Drum, New York, will deploy approximately 1,600 soldiers to Afghanistan to Operation Freedom Sentinel.   Another 3,500 soldiers from the 1st Armored Brigade Combat Team, 3rd Infantry Division from Fort Stewart, Georgia, will be rotating into Korea.  And the 1st Armored Brigade Combat Team, 1st Cavalry Division from Fort Hood, Texas, will be sending 3,500 soldiers to Europe to support U.S. commitments to NATO allies and partners.

Hawaii product conference.  ALA’s Sharon Zambo-Fan is orchestrating an innovative approach to ALA’s annual Hawaii’s trade show, ALA’s Larry Lapka reports. Zambo-fan handles Pacific/Hawaii issues for the American Logistics Association’s (ALA), including political interface with the Hawaii delegation and PACRIM issues affecting exchanges  and commissaries.  

 Zambo-Fan is planning a virtual session at the ALA-DeCA Joint Business Planning (JBP) Workshop for suppliers and the Defense Commissary Agency (DeCA)/exchanges.  Hawaii has experienced numerous problems related to the pandemic, and some of these issues will be addressed during Zambo-Fan’s presentation.  “With tourism being one of our main sources of revenue, COVID-19 has had a drastic impact on all businesses associated with this industry,” she said. “Many of those businesses are considered small businesses and sadly, many have closed their doors.”   For the small businesses which sell to the grocery markets —mostly family owned and operated — Zambo-Fan said sales have been steady, and with the increase in sales in the military commissaries and exchanges, “the opportunity to present new items and promotions are key in maintaining sales and contributing to the survival of their businesses.”   Zambo-Fan noted that Hawaii is described as “a melting pot of cultures, of people and the foods. Everyone here is considered an ‘ohana,’ meaning family. 

 “Our military, while stationed here — Hawaii is home to more than 166,000 military service members and their families — become accustomed to the taste and flavors of Hawaii and when they leave, they take a special part of Hawaii with them.”   The executive said that Hawaii is facing similar challenges as many other areas, including how to do business in the middle of a pandemic, and these challenges are impacting the annual food show.    “Under normal circumstances, the DeCA buyers would attend in person, however, given the current restrictions, together with ALA, we have developed a program in continuing to provide an opportunity for local companies to present their new products to the buyers, continuing that tradition today even through challenges such as COVID 19. Our combined efforts with DeCA present our military commissaries a wonderful selection of local products.” 

The impact of the show on Hawaii businesses is substantial. Zambo-Fan said since the first show was held in 1997 at the Turtle Bay Resort on Hawaii’s North Shore, it has placed more than 3,000 local items in the commissaries.

 ALA and DeCA hold Joint Business Planning Sessions.  DeCA’s Tracie Russ Says, ‘Product Availability’ Key Component of the Agency ‘Moving Forward’ Past Pandemic.  ALA’s Larry Lapka reports that when the onset of the coronavirus pandemic came to the fore earlier this year, the Defense Commissary Agency (DeCA) was forced to re-evaluate some of its fiscal 2020 business plans, but the focus on value and patron savings remained as strong as ever, bolstered by product availability, getting the proper products that patrons wanted onto store shelves. 

 The event was hosted by the American Logistics Associations’ Commissary Council and expertly moderated by Stephanie Supplee of Coastal Pacific Food Distributors and organized under the leadership of Alex Sizemore (EURPAC) ALA’s Commissary Council Chairman and Mike Bender of Procter and Gamble, inc.      

 Making her opening statements during the first day of the three-day American Logistics Association (ALA)/DeCA Joint Business Planning (JBP) Workshop on Tuesday, Sept. 22, Tracie Russ, the agency’s sales director, told attendees that product availability was an essential key to bringing customers back to their local commissaries now that many base restrictions had eased.

 When the virus hit in March, Russ said the DeCA had to immediately pivot many of its business initiatives, including that all category reviews and resets stopped, and product demonstration activity ceased. These measures, coupled with restrictions made by installations related to the flow of people onto their respective bases, had a major impact on commissary transactions.  However, Russ told attendees that the agency was able to get through this tough period in relatively good shape because through strong teamwork, it was able to maintain a good level of product availability on store shelves even during the pandemic’s darkest period.

 “The foundation of all of these efforts is product availability,” she noted. “You will see this theme through all of the teams, through all of the plans. It might not be called ‘product availability,’ it might be reflecting as ‘reducing slow movers,” or taking action on ‘H-coded’ items, or quickly moving through ‘P-coded’ items … these are all items taking space at our distribution point, in our warehouses, and most importantly, on our shelves.”

 Russ stated that as long as DeCA can have the products on the shelves that patrons want, there exists a good opportunity for the agency and its commissaries,

 “We have to have product on the shelves when customers come into shop,” she explained. “If we bring them into shop, and the product is not there, they are not going to give us many chances … there is too much competition out there, there are many places that they have to cross before they get to us.

 “The benefit is strong, it is compelling, but only if the product is there when they get in. So that is why we keep focusing on product availability as being essential to everything that we do. If it is not there, all the other efforts fall short.

 “So, everything we need to do needs to be focused on … if we have a promotion, is the product there to support it? During the holidays, are all the key products there to support it?”

 Russ said, “I know we are going into a different time because of COVID, but we have to remain focused on the availability of products, and we have to make hard decisions on our stock assortment. If it’s slow moving, it needs to go. If it’s not coming back soon, it needs to go. We have to have the products and the system that is working for us.

 “We all know this … it’s just sometimes that these decisions are very hard, but we all need to work together, if we can move the sales in the right direction, then we all win, and everyone wins at the shelf.”  Russ said that with the end of fiscal 2020 rapidly approaching, the agency’s sales results for the fiscal year “are up about $30 million, or 1 percent of our sales … this is not as well as we had hoped, as our gains in the March time frame were reduced through April, May and June as the installations posed restrictions, limiting access for many of our shoppers. “We are starting to see those restrictions loosen, and as the shoppers come back, the transactions are not as poor as they were for those three months.

 “The great thing is that when the customers do come back to the commissary, the basket size is bigger, we get more items in the basket when they do shop.”  Russ said that as DeCA plans for fiscal 2021, “We are still going against COVID, so March is going to be some big numbers that we are going to have to work toward for next year. We also had a leap year in 2020, so we are going to be a day short next year. We need to be thinking about those things as we are creating our plans for 2021.

 “How can we mitigate some of the sales numbers that we are going to go against next year? Obviously, as we go through the remainder of next year, as we get past March and April, then the numbers will back off some, but if we can mitigate some of those high sales numbers in February and March, it might help us move into the latter part of the year.”

 And as fiscal year 2020 end on Sept. 30 and fiscal year 2021 begins on Oct. 1, “There is so much happening throughout the world, throughout retail and in the commissary system, that it Is important that we remain close, constantly communicating, collaborating and working together to ensure the commissary benefit remains strong for those that we serve.”

 Other industry executives who spoke on the first day of the workshop included Stephanie Supplee, business manager for Coastal Pacific Food Distributors (CPFD), and roundtable committee chair of the ALA Commissary Council; Nadia Stein Andy Harb, associate client director and associate client manager, respectively, of The Nielsen Company; and Mike Bender director of military sales for Procter & Gamble, and co-chairman of the ALA JBP Committee.

 DeCA category managers who were expected to make presentations on their respective categories during the three-day conference included Barbara Merriweather (read-to-eat (RTE) cereal, soup, coffee and spices), who was to follow-up Russ on the first day of the conference.

 On the second day of the workshop (Wednesday, Sept. 23), DeCA category managers slated to make presentations included Rena Dial (paper, laundry, household items and pet food); Jessica Stables (cheese, yogurt, refrigerated juice, frozen prepared meals); and Darrell Clary (bacon, sausage/lunchmeat, juice and water.

 DeCA category managers who planned to speak on the workshop’s third day (Thursday, Sept. 24) included Iveena Henderson (carbonated soft drinks (CSD), snacks, cookies/crackers, candy); Bridget Bennett (specialty produce, cut fruit and vegetables, salad mix; and LaRue Smith (oral care, shaving needs, diapers and training pants, body wash and soaps).

 ‘Unprecedented Growth’ Experienced by CGX Online Shopping Program.   Hope Thompson, CGX director of eCommerce, discusses the online shopping option, and how it offers both convenience and safety to CGX patrons. Scott Poteet, the exchange service’s director of Marketing, speaks about the rising importance of the Military Star Card in CGX’s operation.

 With customers looking for both convenience and safety when doing their exchange and commissary shopping, the need for new and innovative shopping options became greater than ever before when the COVOD-19 pandemic enveloped the world late last year and during the entirety of 2020.

 Although the Coast Guard Exchange (CGX) does not offer curbside pickup and reportedly is not planning to offer this shopping option to customers, it has a vigorous online shopping program that has shown great strength since the pandemic struck.

 The CGX does not offer curbside pickup as a shopping option for its customers. Thompson reported that almost 20 percent of CGX customers do not live near a CGX store location, “so direct home delivery allows our customers to use their CGX shopping benefit no matter where they reside.”

 Direct home delivery is perhaps a major perk of the online shopping option that the CGX offers to its customers, and its patrons have responded in significant numbers to making purchases online.

 “ShopCGX.com, the online store of the CGX, has experienced unprecedented growth in 2020,” Thompson noted. “Through August, sales online are 300 percent above last year for the same period, as many new customers have visited the site for the first time and chose to make purchases safely and securely from home during the pandemic.”

 In order to provide the largest selection of items in its online assortment, Thompson said that the CGX fulfills its customers’ orders from its stores, from its ecommerce warehouse in Cleveland, Ohio, or directly from select suppliers’ distribution centers.

 Additionally, Coast Guard uniforms purchased on shopCGX.com are packed and shipped from the Coast Guard uniform distribution center in Woodbine, NJ.

 “All shopCGX.com orders are shipped directly to our customer’s homes, so they don’t have to travel to a CGX store to pick up their order,” Thompson explained.

 At the current pace, she projected that shopCGX.com sales will exceed $7 million this year.

 Since the American Logistics Association (ALA) worked to get the Military Star Card accepted in the commissaries, as it has been embraced by the exchanges, Poteet said that CGX customers are increasingly reaching for this card when making purchases inside CGX stores or online at shopCGX.com.

 Poteet reported that through August 2020, purchases made at CGX with a Military Star Card have increased almost 23 percent over the same period last year, and he said that all orders placed on shopCGX.com are delivered directly to customers’ homes.  

 “The value of our customers’ average purchase on a Military Star card has increased by 10 percent,” he noted, adding that the total number of CGX customer cardholders has increased by more than 4 percent, “and we’ve opened 29 percent more new accounts for our customers compared to 2019.”

 Poteet reported that the Military Star Card “is becoming the top-of-wallet card for a growing number of CGX customers, and since there are no merchant fees, CGX has realized an additional 28 percent in merchant fee avoidance this year — a benefit that contributes to the long-term viability of the Coast Guard Exchange.”

 Once Again, NEXCOM, AAFES Cited on Latina Diversity List.  ALA’s Larry Lapka reports that the Navy Exchange Service Command (NEXCOM) and the Army & Air Force Exchange Service (AAFES0 have once again been named among the 2020 Top 50 Best Companies for Latinas to Work for in the U.S. by LATINA Style Inc.

 The LATINA Style 50 report reflects those programs that Latinas are looking for when seeking job opportunities and career development.

 Among the principal areas of evaluation are the number of Latina executives; Latina retention; mentoring programs; educational opportunities; employee benefits; active affinity groups; and Hispanic community relations. Evaluations for the 2020 annual report are based on 2019 data.

 In the 2020 report, the NEXCOM Enterprise placed at No. 44 on the list, with AAFES coming in next at No. 45. Leading the list was Bank of America. Other major companies on the list included Johnson & Johnson (No. 4); Colgate-Palmolive (No. 8); 3M Company (No. 26); JCPenney (No. 28); and the Coca-Cola Company (No. 37).

 NEXCOM and AAFES will receive their respective awards at the LATINA Style 50 Awards Ceremony & Diversity Leaders Conference in Washington, D.C., on Feb. 18, 2021.

 This is the ninth straight year NEXCOM has earned this recognition based upon its diverse workforce. According to the exchange service, 12 percent of NEXCOM’s nearly 12,000 associates across the globe are Hispanic, of which 69 percent are Hispanic women.

 “I am extremely proud of our NEXCOM team in the manner in which they continue to demonstrate their dedication and professionalism in serving our Sailors, veterans, retirees and their families while embracing diversity and inclusion in the workplace,” said retired Rear Adm. Robert J. Bianchi, NEXCOM’s chief executive officer (CEO). “Everyone at NEXCOM is committed to ensuring that our policies, procedures and practices continue to promote equality at all levels of the organization. Demonstrating respect and providing opportunities for all associates to develop to their fullest potential isn’t an option, it’s an expectation at NEXCOM.”

 To ensure diversity within the NEXCOM Enterprise, the exchange service created its CEO’s Council for Diversity, which is comprised of associates from each headquarters department and field districts around the world. Council members represent various races/ethnicities, genders, sexual orientations, religious and cultural backgrounds. Its purpose is to advise, promote and integrate concepts of diversity initiatives through awareness, education and cultural celebrations and observances as well as for outreach to the Navy community and the support of NEXCOM’s mission.

 In addition, NEXCOM has Special Emphasis Groups that are responsible for monitoring the recruitment, selection and development of associates who are female, of Hispanic descent or individuals with disabilities.

 “These groups also raise awareness of the importance of diversity and demonstrate the command’s commitment to a model diverse workplace, where all individuals can believe that they are an integral part of the operations,” said Candy Phillips, director of Diversity & Workplace Culture at NEXCOM.

 This is the 13th straight year that AAFES has made this prestigious list. According to the Exchange, 12 percent of its workforce are Latina.

 “The Exchange champions the diversity of its workforce and values inclusiveness,” said President and Chief Merchandising Officer (CMO) Ana Middleton, the Exchange’s highest-ranking Latina woman.

“Our nation’s military is made up of service members from all backgrounds, and having a diverse team ready to serve Soldiers, Airmen and their families is critical to the relevancy of the Exchange benefit.”

Best regards,

Stephen Rossetti

President

From the desk of the ALA President

Congress recognizes plight of exchanges and MWR programs with $1.4 billion. ALA has been actively advocating for supplemental funding to offset the losses experience by exchanges and other nonappropriated fund programs in DoD.  Hundreds of millions are already flowing from the first round of stimulus money that Congress enact this year to the Navy and Marine Corps in particular and lately beginning to flow to the Army and Air Force.  .  And, now, in an additional, major and unprecedented recognition of the need for and the plight of NAF programs, the House, in its latest version of the $2.2 trillion pandemic stimulus legislation has allocated $1.4 billion for salaries and other needs of over 55,000 base employees of childcare centers, lodges, food operations, exchanges and other recreational activities that are normally paid by revenue generating accounts that have been detrimentally impacted by the pandemic.  House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin are making a last attempt at forging another coronavirus relief deal.  The House will probably pass the bill tomorrow and toss it to the Senate.  The bill also includes funding for Defense operating funds that can be used for supply chain enhancements including funding for supply chain difficulties.  We commend and thank the House appropriators and the House leadership for recognizing these programs.  We also commend the Defense leadership including Secretary of  Defense Mark Esper, Deputy Secretary of Defense David Norquist, and Under Secretary of Defense Matthew Donovan for recognizing the need to augment NAF programs during the pandemic. We urge all Service Secretaries to use their authority to flow funding to their respective exchanges.  The bill is 2,152 pages long in case anyone has some spare reading time.

Government shutdown avoidance bill is set to move today.  The Senate is expected to move a government funding measure today to keep the government open until at least December 11.  The bill is expected to include $140 million in much needed funding for the Veterans Canteen Service, funding that was included in the House bill passed last week.

One Family, One Mission program launched by resale agencies.   ALA is participating with its resale partners in the launch of a program to boost business and enhance collaboration.  The “One Family, One Mission program includes CGX, MCX, AAFES, NEXCOM, and DeCA.

The program will be discussed at the upcoming ALA Annual Conference to be held virtually on October 20 and 22.  According to a joint letter signed by all of the senior marketing and operating officers of the agencies, the program launches with a Veterans Day promotion.  The launch letter describes the program as an “all hands on deck call for support to make the “In Recognition Of” celebration one to remember.”  The launch letter says: “As the world and our armed forces continue to navigate COVID-19, military resale and its vendor partners have leaned forward to strengthen support of Warfighters and their families. Thank you for all you have done, and continue to do, to support every member of the military community during this extremely challenging time.”  The letter further states: “Our goal is to acknowledge the service and sacrifice of service members through this special virtual event featuring musical performances from top artists, intimate conversations with true heroes and a fun and fitness challenge to bring the military community together.”  “These efforts will be broadcast through all military resale social media and extensively promoted through print, digital, in-store signing and PA channels, to maximize brand visibility, community goodwill and positive consumer perception.”  ALA will be participating as a sponsor and urges all member companies to get behind the effort.  A copy of the letter appears below:

DeCA brings grocery expert on board as Chief Transformation Officer, Grocery Operations.  Last month I reported that DeCA was looking to gain additional grocery management expertise by hiring what is in Government parlance a “Highly Qualified Expert” as Chief transformation Officer, Grocery Operations.  We have learned that the person selected for the job is Jim Flannery.  Mr. Flannery comes from the private sector, most recently as CEO of Summit Ventures.  Linked-in describes Summit Ventures as “experienced business to consumer and business to business consulting”.   He spent 36 years at Procter and Gamble as Managing Director for their Customer Development focusing on “commercial collaboration efforts and the internal capabilities required to deliver them.”  Before going to Summit Ventures, he worked for five years at the Grocery Manufacturers Association which relaunched itself in January of this year as the Consumer Brands Association where he led work to launch a program to enable consumers to get access to information about hundreds of attributes on food, beverage, personal care, household product and pet care products.

According to the position announcement; “The employee will advise and drive the DeCA leadership to embrace and pursue reform within the enterprise. This will include setting the conditions to empower and favor individual contributor’s ideas over the rigid processes and tools that prevent creative thinking. The employee will capitalize on outside expertise in the grocery industry and the respective Associations that support the supply chain and marketing industries.”

Among the duties set forth in the position description, Mr. Flannery would:

  •  Work with and directly for the Director / CEO of DeCA to develop high quality business strategies and plans.
  • Build relationships of trust with key partners and stakeholders, to include suppliers, manufactures, and distributors
  • Be the lead executive in implementing the Community Services Reform transformation plan according to the Business Case Analysis presented by the Office of the Chief Management Officer.
  • Oversee operations and business activities to ensure they produce the desired results and are consistent with the overall strategy and mission of the agency and various studies (i.e. achieve the mandated savings targets currently set at 23.7%)
  • Establish professional contacts with high-level executives and representatives of industry partners, trade and professional associations, veterans and military service organizations, and special interest, constituent, and advocacy groups
  • Meet with industry experts to discuss innovations in the grocery business, and the impact COVIV-19 had on the industry and how DeCA can position itself to take advantage of industry and consumer shopping pattern changes.
  • Assist the Executive Resale Board in implementing ideas from the Reform Group
  • Work with DeCA leadership to draft, if necessary, legislation to enable a more flexible and agile DeCA and commissary operations

This position will be located in (DeCA), an agency of the Department of Defense (DoD), aligned to the Office of the Assistant Secretary of Defense for Manpower and Reserve Affairs (OASD(M&RA)), within the Office of the Under Secretary of Defense for Personnel and Readiness (OUSD(P&R)).

New defense official nominated by POTUS for oversight of resale programs.    Speaking of OSD (M&RA): DeCA reports to the Department of Defense through two channels.  As a Defense Agency, it falls under the Defense efforts to reform “4th Estate” entities of the DoD.  As a quality of life program, it falls under the Under Secretary of Defense for Personnel and Readiness. (USD P&R) The USD (P&R) also issues policy for exchange operations and coalesces cooperative efforts through an Executive Resale Board.

Ms. Vee Penrod has been working in the role as Acting Assistant Secretary for Manpower and Reserve Affairs.  She also served as the DeCA Director before Mr. Bill Moore came on board last month, with Admiral Rob Bianchi (USN-ret.) serving as both the ”Special Assistant for Commissary Operations” and the NEXCOM CEO.

Now, President Trump announced yesterday that he will nominate Brian Davis to be the assistant secretary of defense for manpower and reserve affairs.  Davis currently serves as the Director of the Defense Personnel and Family Support Center for the Department of Defense.  He is an Air Force Command Pilot and served in various command position for the Air Force.   His confirmation hearing before Senator Jim Inhofe’s’ Armed Services Committee has not yet been set.  Until he is confirmed by the Senate, Ms. Penrod will expect that Ms. Penrod will continue in the acting role.

AAFES Executive promotions and assignments:

Chad Lucas to position of Senior VP for Information Technology

Sean Applegate, Business Development Manager, Exchange HQ, Customer Experience Directorate to E‐Commerce Operations Manager, Exchange HQ, Customer Experience Directorate.

Keola Chan, General Manager (Dual), JB Charleston Exchange, Eastern Region to General Manager, Wright Patterson AFB Exchange, Central Region

Bettina Ciciriello‐Frederick Program Specialist, Exchange HQ, Executive Group to the position of PB 5/1, General Manager (Dual), Dyess AFB Exchange, Western Region

Tammy Hairston, Store Manager (MS), Wright Patterson AFB Exchange, Centra Region to General Manager, Hill AFB Exchange,

Christel Kelly, Sales & Merchandise Manager, JB Fort Lewis‐McChord Exchange, Western Region to the position of PB 5/1, General Manager (Dual), Denver Consolidated Exchange (DS: Buckley AFB), Western

Jerry Myers, Financial Systems Administrator, Exchange HQ, Finance &Accounting Directorate to Financial Analysis Manager, Exchange HQ, Finance & Accounting Directorate.

Jessica Provan, Sales & Merchandise Manager, Fort Hood Exchange, Central Region to Store Manager (MS), EUCOM Consolidated Exchange (DS: Panzer), Europe Region

Brian Read, General Manager (Dual), Grand Forks Exchange, Central Region to General Manager, Minot AFB Exchange, Central Region in October 2020.

Patricia Tinker, General Manager (Dual), Dyess AFB Exchange, Western Region to Store Manager (MS), Fort Bliss Exchange, Western Region

Jermaine Wilson, General Manager, Wright Patterson AFB Exchange, Central Region to General Manager, Fort Riley Exchange, Central Region

Thea Sarver General Manager, JB Andrews AFB Exchange, Eastern Region to General Manager, Fort Buchanan Exchange, Eastern Region

Nanami Taniguchi, Store Manager (MS), Fort Leonard Wood Exchange, Central Region to Store Manager (MS), Hawaii Consolidated Exchange Schofield Barracks), Pacific Region.

Stephanie Wilson General Manager, Fort Buchanan Exchange, Eastern Region to General Manager, JB Andrews AFB Exchange, Eastern Region

Resale Roundup-August 2020 ($ in thousands)*

Service              Aug. 20                Aug. 19           Diff.               FY20 YTD              FY19 YTD             Diff.

AAFES            $572,593             $638,147        -10.3%            $4,162,642           $4,730,249          -12.9%    

 

NEXCOM           163,316               183,674        -11.1%              1,195,159             1,313,374           -9.0%    

 

MCX                 58,026                64,720        -10.3%                439,115               484,388           -9.4%    

 

VCS                  25,110                38,820        -35.3%                190,514               288,105          -33.9%    

 

CGX                  16,778                12,921       +29.9%                108,268                 91,570         +18.2%    

Service              Aug. 20                Aug. 19           Diff.               FY20 YTD              FY19 YTD             Diff.

DeCA             $346,785             $385,172        -10.9%            $4,173,615           $4,137,299           +0.9%

 

Note: AAFES’s sales figures are cumulative, and include direct sales.

 * Fiscal years vary by service, as do computation methods. Sales figures are provided by the services on a monthly basis. Some information provided by the services reflects incomplete sales totals or flash figures. Audited figures are used when provided by the services. Sales figures are approximate and are rounded off. AAFES, NEXCOM, MCX and CGX sales totals include gasoline, and fluctuations in prices can impact monthly and yearly performance. Most exchange sales do not include concession sales. All year-to-date charts on this page refer to the month shown in this table unless otherwise specified. Totals may not agree because of rounding.


Best regards,
Stephen Rossetti
President

From the desk of the ALA President 9/29

Quotes of note

And by the way, we see conditions changing across the country all the time, and so you will see, in some cases, condition levels going up or going down based on what they see, again at the local installation and the capabilities they have at that installation, and then what’s happening in the state in which they are located. Or if they’re overseas, if they’re OCONUS, what’s happening in the country in which they are located.

 And by the way, we see conditions changing across the country all the time, and so you will see, in some cases, condition levels going up or going down based on what they see, again at the local installation and the capabilities they have at that installation, and then what’s happening in the state in which they are located. Or if they’re overseas, if they’re OCONUS, what’s happening in the country in which they are located.  Secretary of Defense Mark Esper at a DoD Town Hall Meeting last week. 

Well, the short answer is yes, at some point in the future these restrictions will be lifted. But for right now, and you said, ‘the foreseeable future,’ for right now, it’s conditions-based, and it depends on where you are, what the situation is at your local camp, post, station, ship, et cetera. But we have to be mindful that the number one priority is the health and safety of the force writ large. So, we know, we know factually that masks work. We know that social distancing works. We know that proper sanitation and hygiene and washing of hands, we know those things work, so we’re going to continue to do those.

In the meantime, we’re also developing a vaccine. You’ve heard about Operation Warp Speed. That is on the fast track. I fully expect that we’re going to have successful, safe and effective vaccines in the near-term. I don’t know what that means in terms of exact numbers, but sometime in the fall and towards the end of the year you’re going to see vaccines rolling out that will be administered to various parts of the population and the military. The numbers will increase as we get into the winter and the spring. You’ve heard, probably, the CDC and other officials talk about that.

So, you’ve got the vaccine out there, and that’ll eventually be a great solution, and it will defeat the COVID virus over time. But in the meantime, we’re going to have to maintain our restrictions that we have and continue to enforce the self-discipline that we use for masks and hygiene and social distancing and so on and so forth. And it’s all very, very locally dependent. It depends on where exactly you are, and the commanders will make those calls.   General Mark Milley, Chairman of the Joint Chiefs of Staff at a recent DoD Town Hall meeting

In a matter of 90 days, we have vaulted forward 10 years in consumer and business digital adoption.  From McKinsey consultants commenting on the need for agility and speed in grocery evolution.

The foundation of all of these efforts is product availability,” she noted. “You will see this theme through all of the teams, through all of the plans. It might not be called ‘product availability,’ it might be reflecting as ‘reducing slow movers,” or taking action on ‘H-coded’ items, or quickly moving through ‘P-coded’ items … these are all items taking space at our distribution point, in our warehouses, and most importantly, on our shelves.   DeCA’s Director of Sales Tracie Russ at ALA and DeCA’s Joint Business Planning Conference. 

 Amazon has been really respectful of the Whole Foods culture. They’ve let us be ourselves. At the same time, there are things that Amazon does better than Whole Foods does. One of the reasons we wanted to do this merger is we saw Amazon as a technology leader, and Whole Foods was just a follower. Since Covid struck, our online sales have tripled. Could we have done that prior to Amazon? No way. From the very first day we merged with them, they pushed us to make the changes we needed to be more effective at online delivery.Another thing Amazon has changed is that our culture at Whole Foods tended to be intuitive, managing more by the gut. Amazon is very much a company that manages through data. And if you don’t have good data and good arguments, then that’sthe end of the discussion. That’s been a positive change for our company because we are making more data-driven decisions than we made previously, and, therefore, I think we’re making better decisions.  James Mackey, Founder of Whole Foods, reflecting on the August 2017 merger of the company with Amazon.

ShopCGX.com, the online store of the CGX, has experienced unprecedented growth in 2020. Through August, sales online are 300 percent above last year for the same period, as many new customers have visited the site for the first time and chose to make purchases safely and securely from home during the pandemic.’  Hope Thompson, Director of Ecommerce, Coast Guard Exchange (CGX)

ALA’s annual conference is continuing to come together.  Registration details are on the way for ALA’s virtual conference planned for October 20 and 22.  The event will include speakers from the Department of Defense, resale agencies and the Congress.  There are a lot of moving parts in the system and the Convention will cover all of it.

Overheard.  Word is that the Department of Defense is looking to adapting their identification and base access strategies to adapt to the deployment of the vaccine with great implications for on-base access.  Base access is going to be a major topic at the ALA’s Annual Convention on October 20 and 22 and officials from the DoD’s Defense Manpower Data Center are being asked to participate to brief attendees on this and other base access developments.

Government shutdown update.  It looks like we have a deal.  The House has passed a “continuing resolution” that keeps government open until at least December 11.  The Senate is expected to act today and tomorrow to pass a similar measure.  Commissary operations would not be disrupted, and Federal planners have not even begun to develop contingency plans for a shutdown, indicating that the deal is done.  The continuing resolution is especially critical for the Veterans Canteen Service because a provision in the bill allows for the transfer of $140 million to augment their operations and avoid major layoffs and curtailment of operations.

Two issues in Defense bill being tracked and worked by ALA that would have an effect on industry.  One is a provision that would require regular reports from all companies doing business with exchange and commissaries on their use of goods made in the Xinjiang Uyghur Autonomous Region (XUAR) imported into the United States and sold in the military commissary and exchange systems are not made with forced labor.  ALA is concerned about the burden placed on companies and the fact that companies doing business with exchanges and commissaries are being singled out when other companies in the U.S.   are not.   

 Another issue we are tracking, and working is food ingredient labeling.  Here’s the text of the House and Senate versions. 

 Senate–SEC. 381. CLARIFICATION OF FOOD INGREDIENT REQUIREMENTS FOR FOOD OR BEVERAGES PROVIDED BY THE DEPARTMENT OF DEFENSE.

(a) IN GENERAL.—Before making any final rule, statement, or determination regarding the limitation or prohibition of any food or beverage ingredient in military food service, military medical foods, commissary food, or commissary food service, the Secretary of Defense shall publish in the Federal Register a notice of a preliminary rule, statement, or determination (in this section referred to as a ‘‘proposed action’’) and provide opportunity for public comment.

 

(b) MATTERS TO BE INCLUDED. —The Secretary shall include in any notice published under subsection

(a) the following:

(1) The date of the notice.

(2) Contact information for the appropriate office at the Department of Defense.

(3) A summary of the notice.

(4) A date for comments to be submitted and specific methods for submitting comments.

 

The House version of the NDAA includes the following provision.  NOTICE AND COMMENT FOR PROPOSED ACTIONS OF THE SECRETARY OF DEFENSE RELATING TO FOOD AND BEVERAGE INGREDIENTS.  

(a) NOTICE AND COMMENT.—Before promulgating any service-wide or Department-wide final rule, statement, or determination relating to the limitation or prohibition of an ingredient in a food or beverage item provided to members of the Armed Forces by the Department of Defense (including an item provided through a commissary store, a dining facility on a military installation, or a military medical treatment facility), the Secretary of Defense shall—

(1) publish in the Federal Register a notice of the proposed rule, statement, or determination (in this section referred to as a ‘‘proposed action’’); and

(2) provide interested persons an opportunity to submit public comments with respect to the proposed action.

(b) MATTERS TO BE INCLUDED IN NOTICE. —The Secretary shall include in any notice published comment period would be limited to ingredient decisions that span an entire Service, or Department (of Navy, of Air Force, of Army, of Defense). The intent is to allow small-unit or individual bases or forward-deployed locations to make ingredient decisions that would have no effect on other bases or locations. However, were a Service or Department to make a proposed ingredient, the rule that would go into effect for the entire Service or Department

Trump Administration filling three positions that will influence resale programs.  Rear Admiral (Ret.) Jon C. Kreitz, of Virginia, to be an Assistant Secretary of the Air Force (Manpower and Reserve Affairs).  Kreitz was most recently the Deputy Director for Operations of the Defense POW/MIA Accounting Agency, where he led daily operations spanning the Indo-Pacific, Americas, Europe, North Africa, and the Middle East.  Previously, Rear Admiral Kreitz served as the President of the Board of Inspection and Survey within the Department of the Navy.

Matthew B. Shipley is being nominated as Assistant Secretary of Defense for Readiness.  He currently serves as the Deputy Assistant Secretary of Defense for Force Readiness.  Prior to this role, Mr. Shipley served as the Military Legislative Assistant to Senator Ted Cruz, where he advised the Senator on a broad portfolio of veterans’ affairs, foreign affairs, and national security matters.

Michael Rigas, of Massachusetts, to be Deputy Director for Management, Office of Management and Budget.  Rigas currently serves as the Acting Director of the United States Office of Personnel Management (OPM). He also recently served as the Acting Deputy Director for Management of the United States Office of Management and Budget (OMB).

Congratulations to DeCA on 29 years.   October 1 marks DeCA’s 29th year in existence.  “Throughout its history DeCA has earned a great reputation for serving the military community in good and bad times,” DeCA Director Bill Moore said. “Our employees have shown their dedication and innovation, combined with the support of our industry partners, in keeping commissary shelves stocked amid the COVID-19 pandemic.”

Senate emphasis on resale loyalty programs.  In its report accompanying the fiscal year 2021 defense policy bill, the Senate Armed Services Committee included the following.  Military commissaries offer many benefits to their patrons through the Commissary Rewards Program, such as digital coupon offers, digital receipts, and at-cashier discounts. To improve sales and revenues at commissaries and military exchanges, the committee encourages the Military Exchange Service to adopt a loyalty program using lessons learned from the Defense Commissary Agency. The committee believes that both retail venues would benefit from cross-linking loyalty programs, which would further incentivize commissary customers to patronize both commissaries and exchanges. Similar loyalty programs in the private retail industry have proven to be highly successful in expanding sales. “

Amazing Amazon.  Amazon has added 50 million prime members since 2018 and now has 150 million, paying $119 a year.  Sold 175 million items on Prime Day last year.  Will expand its fulfillment footage by 50 percent this year

Another sales surge?  Military commissaries experienced a sales surge in March and April when the pandemic was kicking into full stride.  And, suppliers to the stores were slammed with increasing competition and demand from commercial accounts and worked hard to meet commissary demand as well.  Now, another sales surge is looming, and commissary suppliers and distributors are working to avoid the same problems that affected operations in the Spring.  Military distributors have stepped up with strict sanitation and other COVID prevention measures in order to ensure that the vital supply hubs are not compromised, especially for long-lead shipments to military overseas.  Supermarkets are stockpiling groceries and storing them early to prepare for the fall and winter months, when some health experts warn the country could see another widespread outbreak of virus cases and new restrictions.  Southeastern Grocers LLC secured holiday turkeys and hams over the summer, months before it normally starts inventory planning, said Chief Executive Anthony Hucker.  Grocery wholesaler United Natural Foods Inc. has loaded up on extra inventory of cranberry sauce, herbal tea and cold remedies, said President Chris Testa.  Associated Food Stores recently started building “pandemic pallets” of cleaning and sanitizing products so it always has some inventory in warehouses.  These changes, a reaction to the sudden and massive shortages grocers experienced in the spring.   Now, food sellers are stockpiling months, rather than weeks, worth of staples such as pasta sauce and paper products to better prepare for this winter, when people are expected to hunker down at home. Many retailers are expanding distribution capacity, augmenting warehouse space and modifying shifts.  A fresh increase in demand in the event that officials reinstate restrictions on restaurants or workplaces would also run up against the normal holiday boom in grocery sales, further elevating demand for items like baking products, pasta, meat and paper towels.  Ahold Delhaize, owner of the Giant and Food Lion chains, is storing 10% to 15% more inventory than it did before the pandemic to ensure it won’t run out of fast-selling items.  Industry executives say they don’t think a potential wintertime burst in grocery demand will be as extreme as it was in March, when people panic-shopped, fearing grocery-store closures or food shortages. Consumers are better prepared this time around, said Sean Connolly, chief executive of Conagra Brands.  Manufacturers have given priority to making their fastest selling products.  And, Walmart is overriding their ordering algorithms to stock up.

Curbside catch-up.   DeCA is working to deploy more curbside locations and industry statistics show that the drive to more curb side must pick up speed if commissaries are to meet or match what’s going on outside the gate.  Reports are that the new Commissary Director, Bill Moore, is eying a speed-up in deployment of curbside service.  And it comes none too soon.  Curbside and delivery were already experiencing a significant multi-year upward trend before the pandemic.  The COVID-19 event created an “Explosive” 10X+ increase in the usage of Curbside.  Forecasts now predict 20%-25% of all future grocery sales will be curbside/delivery, one out of every four grocery dollars going forward.   This is the “Retail Battle of the Decade” and the winners will dictate the “Shape of Retail” in the future. Instacart is hiring 550,000 to support On-line Grocery. Walmart is hiring an incremental 100,000 and almost all stores now have curbside.  Target has reported a 141% increase in Ecommerce sales and have expanded to 3,000+ stores. Aldi has expanded 600 incremental stores. Walmart is going directly after Amazon Prime with Walmart Plus.  This is a rapid 13% -18% shift in Market Share to Retailers with On-Line Strategies.  Those without a Curbside Strategy will lose an incremental 13+% year-over-year.  The DeCA Consumer is even more likely to migrate to Curbside.  Over 64% are under 30 years of age.   Consumers are now establishing relationships with civilian curbside providers and these relationships are shifting brand loyalty.  These relationships will create Brand Loyalty over time.  Competitor Curbside will exceed 10,000 US Retail locations by year-end 2020 and the ability to dislodge this loyalty will be extremely difficult.

Agility in store formats and technology is not optional.   According to McKinsey, a management consulting group, the pandemic has pushed technology and store format evolution forward 10 years within 90 days.

As a result of the pandemic, many retailers discovered that they lacked the IT agility to implement changes swiftly and effectively, illuminating a challenge that the industry must address so it can thrive moving forward: the need for an open, flexible infrastructure that can adapt to rapidly evolving customer journeys.  Flexible technology enables retailers to introduce new shopping concepts, support new types of consumer journeys, and offer new services and technologies to enhance the customer experience.  Systems shouldn’t drive sales; sales need to drive systems.  Embracing openness allows retailers to keep up with ever-changing consumer expectations. Gone are the days of vendor monopolies and rip-and-replace of existing implementations. Future-ready retailers in the commercial marketplace are discovering that they need to be open to working with multiple vendors, open in their approach to IT infrastructure and open with regard to business processes. Being open accelerates time to market for new implementations and leads to higher business agility while lowering total cost of ownership (TCO). Openness can also reduce barriers to implementing new technologies in the context of existing IT systems.  The concept of open retailing comprises an open IT philosophy and flexible infrastructure. This platform approach, which combines open API software, a modular hardware setup and a flexible services portfolio.  According to the 2020 International Grocery Shopper and Technology Survey, conducted by Nielsen and commissioned by Diebold Nixdorf, 37% of shoppers experienced frustration due to time spent waiting in line.  Of those shoppers, 72% would prefer to use self-checkout when there’s a line — a preference shared by almost two-thirds of grocery shoppers in general. The survey also found that 57% of shoppers use some mobile device at least rarely while shopping in store, and 86% of them would be interested in using a mobile device to accelerate the checkout by self-scanning items. 79% of consumers intend to continue or increase their usage of self-checkout after the pandemic.

Food prices rose 4.6 percent in August.  Continues food inflation upward trend.

The Pentagon announced that 117 of 231 installations, or about 51%, have lifted travel restrictions, meaning that military can change locations between these bases.    The Department of Defense deems installations where local health protection conditions are below “Charlie” as being secure for personnel movement.

A stop-movement order was put into place in March by Defense Secretary Mark Esper at the outset of the pandemic. The result of the travel restrictions has caused a major delay in permanent change of station orders.  As of last Wednesday, the DoD had 43,851 coronavirus cases, an increase of 1,892 cases during the past seven days.

Prescription kiosks may boost commissary and exchange traffic.  The Military Health System recently announced an expansion of the prescription pick-up locker, or “ScriptCenter” program, nearly doubling the number of locations that offer the self-service option, including commissaries and exchanges. The new ScriptCenter dispenses your medications while you wait. The units will also have video capabilities one day, allowing a patient to communicate directly with a pharmacist if necessary.

Patients at participating locations will be given the option to get their medication either from the pharmacy or ScriptCenter when they order refills. The ExpressScript mail-order home delivery pharmacy option will still be available.

Active-duty military, dependents, retirees and all authorized Defense Department ID holders are eligible to use the ScriptCenter. Once requested, prescription refills will be available for pickup after three duty days and will stay within the system for 14 days. If not picked up, the prescriptions will return to the pharmacy.

The ScriptCenter offers refills on most common medications; controlled substances and refrigerated medications must still be received in-person from the pharmacist.

In use by the Air Force since 2009, the locker lets users scan their government-issued ID and enter a second personal identifier, such as date of birth or fingerprint scan, to have their medications automatically dispensed to them.

ScriptCenters are normally located in places such as the exchange or commissary, which are generally open longer hours than the base pharmacy is; however, they can be located anywhere. The ScriptCenter machine is available 24/7, allowing convenient prescription pickup options for busy folks, shift workers and the parents of children (who tend to get sick only on weekends).

There are currently 27 units at Air Force bases in the U.S. and Europe, with plans to add more than 20 additional units throughout the Military Health System in the next year.

The expansion of the program depends on each location’s individual situation, such as safety and security, ease of access and availability of power and secure network communications.

Troop movements.   The Army’s fall unit rotations are out.  The 2nd Infantry Brigade Combat Team, 10th Mountain Division from Fort Drum, New York, will deploy approximately 1,600 soldiers to Afghanistan to Operation Freedom Sentinel.   Another 3,500 soldiers from the 1st Armored Brigade Combat Team, 3rd Infantry Division from Fort Stewart, Georgia, will be rotating into Korea.  And the 1st Armored Brigade Combat Team, 1st Cavalry Division from Fort Hood, Texas, will be sending 3,500 soldiers to Europe to support U.S. commitments to NATO allies and partners.

Hawaii product conference.  ALA’s Sharon Zambo-Fan is orchestrating an innovative approach to ALA’s annual Hawaii’s trade show, ALA’s Larry Lapka reports. Zambo-fan handles Pacific/Hawaii issues for the American Logistics Association’s (ALA), including political interface with the Hawaii delegation and PACRIM issues affecting exchanges and commissaries.

Zambo-Fan is planning a virtual session at the ALA-DeCA Joint Business Planning (JBP) Workshop for suppliers and the Defense Commissary Agency (DeCA)/exchanges.  Hawaii has experienced numerous problems related to the pandemic, and some of these issues will be addressed during Zambo-Fan’s presentation.  “With tourism being one of our main sources of revenue, COVID-19 has had a drastic impact on all businesses associated with this industry,” she said. “Many of those businesses are considered small businesses and sadly, many have closed their doors.”   For the small businesses which sell to the grocery markets —mostly family owned and operated — Zambo-Fan said sales have been steady, and with the increase in sales in the military commissaries and exchanges, “the opportunity to present new items and promotions are key in maintaining sales and contributing to the survival of their businesses.”   Zambo-Fan noted that Hawaii is described as “a melting pot of cultures, of people and the foods. Everyone here is considered an ‘ohana,’ meaning family.

“Our military, while stationed here — Hawaii is home to more than 166,000 military service members and their families — become accustomed to the taste and flavors of Hawaii and when they leave, they take a special part of Hawaii with them.”   The executive said that Hawaii is facing similar challenges as many other areas, including how to do business in the middle of a pandemic, and these challenges are impacting the annual food show.    “Under normal circumstances, the DeCA buyers would attend in person, however, given the current restrictions, together with ALA, we have developed a program in continuing to provide an opportunity for local companies to present their new products to the buyers, continuing that tradition today even through challenges such as COVID 19. Our combined efforts with DeCA present our military commissaries a wonderful selection of local products.”

The impact of the show on Hawaii businesses is substantial. Zambo-Fan said since the first show was held in 1997 at the Turtle Bay Resort on Hawaii’s North Shore, it has placed more than 3,000 local items in the commissaries.

ALA and DeCA hold Joint Business Planning Sessions.  DeCA’s Tracie Russ Says, ‘Product Availability’ Key Component of the Agency ‘Moving Forward’ Past Pandemic.  ALA’s Larry Lapka reports that when the onset of the coronavirus pandemic came to the fore earlier this year, the Defense Commissary Agency (DeCA) was forced to re-evaluate some of its fiscal 2020 business plans, but the focus on value and patron savings remained as strong as ever, bolstered by product availability, getting the proper products that patrons wanted onto store shelves.

The event was hosted by the American Logistics Associations’ Commissary Council and expertly moderated by Stephanie Supplee of Coastal Pacific Food Distributors and organized under the leadership of Alex Sizemore (EURPAC) ALA’s Commissary Council Chairman and Mike Bender of Procter and Gamble, inc.

Making her opening statements during the first day of the three-day American Logistics Association (ALA)/DeCA Joint Business Planning (JBP) Workshop on Tuesday, Sept. 22, Tracie Russ, the agency’s sales director, told attendees that product availability was an essential key to bringing customers back to their local commissaries now that many base restrictions had eased.

When the virus hit in March, Russ said the DeCA had to immediately pivot many of its business initiatives, including that all category reviews and resets stopped, and product demonstration activity ceased. These measures, coupled with restrictions made by installations related to the flow of people onto their respective bases, had a major impact on commissary transactions.  However, Russ told attendees that the agency was able to get through this tough period in relatively good shape because through strong teamwork, it was able to maintain a good level of product availability on store shelves even during the pandemic’s darkest period.

“The foundation of all of these efforts is product availability,” she noted. “You will see this theme through all of the teams, through all of the plans. It might not be called ‘product availability,’ it might be reflecting as ‘reducing slow movers,” or taking action on ‘H-coded’ items, or quickly moving through ‘P-coded’ items … these are all items taking space at our distribution point, in our warehouses, and most importantly, on our shelves.”

Russ stated that as long as DeCA can have the products on the shelves that patrons want, there exists a good opportunity for the agency and its commissaries,

“We have to have product on the shelves when customers come into shop,” she explained. “If we bring them into shop, and the product is not there, they are not going to give us many chances … there is too much competition out there, there are many places that they have to cross before they get to us.

“The benefit is strong, it is compelling, but only if the product is there when they get in. So that is why we keep focusing on product availability as being essential to everything that we do. If it is not there, all the other efforts fall short.

“So, everything we need to do needs to be focused on … if we have a promotion, is the product there to support it? During the holidays, are all the key products there to support it?”

Russ said, “I know we are going into a different time because of COVID, but we have to remain focused on the availability of products, and we have to make hard decisions on our stock assortment. If it’s slow moving, it needs to go. If it’s not coming back soon, it needs to go. We have to have the products and the system that is working for us.

“We all know this … it’s just sometimes that these decisions are very hard, but we all need to work together, if we can move the sales in the right direction, then we all win, and everyone wins at the shelf.”  Russ said that with the end of fiscal 2020 rapidly approaching, the agency’s sales results for the fiscal year “are up about $30 million, or 1 percent of our sales … this is not as well as we had hoped, as our gains in the March time frame were reduced through April, May and June as the installations posed restrictions, limiting access for many of our shoppers. “We are starting to see those restrictions loosen, and as the shoppers come back, the transactions are not as poor as they were for those three months.

“The great thing is that when the customers do come back to the commissary, the basket size is bigger, we get more items in the basket when they do shop.”  Russ said that as DeCA plans for fiscal 2021, “We are still going against COVID, so March is going to be some big numbers that we are going to have to work toward for next year. We also had a leap year in 2020, so we are going to be a day short next year. We need to be thinking about those things as we are creating our plans for 2021.

“How can we mitigate some of the sales numbers that we are going to go against next year? Obviously, as we go through the remainder of next year, as we get past March and April, then the numbers will back off some, but if we can mitigate some of those high sales numbers in February and March, it might help us move into the latter part of the year.”

And as fiscal year 2020 end on Sept. 30 and fiscal year 2021 begins on Oct. 1, “There is so much happening throughout the world, throughout retail and in the commissary system, that it Is important that we remain close, constantly communicating, collaborating and working together to ensure the commissary benefit remains strong for those that we serve.”

Other industry executives who spoke on the first day of the workshop included Stephanie Supplee, business manager for Coastal Pacific Food Distributors (CPFD), and roundtable committee chair of the ALA Commissary Council; Nadia Stein Andy Harb, associate client director and associate client manager, respectively, of The Nielsen Company; and Mike Bender director of military sales for Procter & Gamble, and co-chairman of the ALA JBP Committee.

DeCA category managers who were expected to make presentations on their respective categories during the three-day conference included Barbara Merriweather (read-to-eat (RTE) cereal, soup, coffee and spices), who was to follow-up Russ on the first day of the conference.

On the second day of the workshop (Wednesday, Sept. 23), DeCA category managers slated to make presentations included Rena Dial (paper, laundry, household items and pet food); Jessica Stables (cheese, yogurt, refrigerated juice, frozen prepared meals); and Darrell Clary (bacon, sausage/lunchmeat, juice and water.

DeCA category managers who planned to speak on the workshop’s third day (Thursday, Sept. 24) included Iveena Henderson (carbonated soft drinks (CSD), snacks, cookies/crackers, candy); Bridget Bennett (specialty produce, cut fruit and vegetables, salad mix; and LaRue Smith (oral care, shaving needs, diapers and training pants, body wash and soaps).

‘Unprecedented Growth’ Experienced by CGX Online Shopping Program.   Hope Thompson, CGX director of eCommerce, discusses the online shopping option, and how it offers both convenience and safety to CGX patrons. Scott Poteet, the exchange service’s director of Marketing, speaks about the rising importance of the Military Star Card in CGX’s operation.

With customers looking for both convenience and safety when doing their exchange and commissary shopping, the need for new and innovative shopping options became greater than ever before when the COVOD-19 pandemic enveloped the world late last year and during the entirety of 2020.

Although the Coast Guard Exchange (CGX) does not offer curbside pickup and reportedly is not planning to offer this shopping option to customers, it has a vigorous online shopping program that has shown great strength since the pandemic struck.

The CGX does not offer curbside pickup as a shopping option for its customers. Thompson reported that almost 20 percent of CGX customers do not live near a CGX store location, “so direct home delivery allows our customers to use their CGX shopping benefit no matter where they reside.”

Direct home delivery is perhaps a major perk of the online shopping option that the CGX offers to its customers, and its patrons have responded in significant numbers to making purchases online.

ShopCGX.com, the online store of the CGX, has experienced unprecedented growth in 2020,” Thompson noted. “Through August, sales online are 300 percent above last year for the same period, as many new customers have visited the site for the first time and chose to make purchases safely and securely from home during the pandemic.”

In order to provide the largest selection of items in its online assortment, Thompson said that the CGX fulfills its customers’ orders from its stores, from its ecommerce warehouse in Cleveland, Ohio, or directly from select suppliers’ distribution centers.

Additionally, Coast Guard uniforms purchased on shopCGX.com are packed and shipped from the Coast Guard uniform distribution center in Woodbine, NJ.

“All shopCGX.com orders are shipped directly to our customer’s homes, so they don’t have to travel to a CGX store to pick up their order,” Thompson explained.

At the current pace, she projected that shopCGX.com sales will exceed $7 million this year.

Since the American Logistics Association (ALA) worked to get the Military Star Card accepted in the commissaries, as it has been embraced by the exchanges, Poteet said that CGX customers are increasingly reaching for this card when making purchases inside CGX stores or online at shopCGX.com.

Poteet reported that through August 2020, purchases made at CGX with a Military Star Card have increased almost 23 percent over the same period last year, and he said that all orders placed on shopCGX.com are delivered directly to customers’ homes.

“The value of our customers’ average purchase on a Military Star card has increased by 10 percent,” he noted, adding that the total number of CGX customer cardholders has increased by more than 4 percent, “and we’ve opened 29 percent more new accounts for our customers compared to 2019.”

Poteet reported that the Military Star Card “is becoming the top-of-wallet card for a growing number of CGX customers, and since there are no merchant fees, CGX has realized an additional 28 percent in merchant fee avoidance this year — a benefit that contributes to the long-term viability of the Coast Guard Exchange.”

Once Again, NEXCOM, AAFES Cited on Latina Diversity List.  ALA’s Larry Lapka reports that the Navy Exchange Service Command (NEXCOM) and the Army & Air Force Exchange Service (AAFES0 have once again been named among the 2020 Top 50 Best Companies for Latinas to Work for in the U.S. by LATINA Style Inc.

The LATINA Style 50 report reflects those programs that Latinas are looking for when seeking job opportunities and career development.

Among the principal areas of evaluation are the number of Latina executives; Latina retention; mentoring programs; educational opportunities; employee benefits; active affinity groups; and Hispanic community relations. Evaluations for the 2020 annual report are based on 2019 data.

In the 2020 report, the NEXCOM Enterprise placed at No. 44 on the list, with AAFES coming in next at No. 45. Leading the list was Bank of America. Other major companies on the list included Johnson & Johnson (No. 4); Colgate-Palmolive (No. 8); 3M Company (No. 26); JCPenney (No. 28); and the Coca-Cola Company (No. 37).

NEXCOM and AAFES will receive their respective awards at the LATINA Style 50 Awards Ceremony & Diversity Leaders Conference in Washington, D.C., on Feb. 18, 2021.

This is the ninth straight year NEXCOM has earned this recognition based upon its diverse workforce. According to the exchange service, 12 percent of NEXCOM’s nearly 12,000 associates across the globe are Hispanic, of which 69 percent are Hispanic women.

“I am extremely proud of our NEXCOM team in the manner in which they continue to demonstrate their dedication and professionalism in serving our Sailors, veterans, retirees and their families while embracing diversity and inclusion in the workplace,” said retired Rear Adm. Robert J. Bianchi, NEXCOM’s chief executive officer (CEO). “Everyone at NEXCOM is committed to ensuring that our policies, procedures and practices continue to promote equality at all levels of the organization. Demonstrating respect and providing opportunities for all associates to develop to their fullest potential isn’t an option, it’s an expectation at NEXCOM.”

To ensure diversity within the NEXCOM Enterprise, the exchange service created its CEO’s Council for Diversity, which is comprised of associates from each headquarters department and field districts around the world. Council members represent various races/ethnicities, genders, sexual orientations, religious and cultural backgrounds. Its purpose is to advise, promote and integrate concepts of diversity initiatives through awareness, education and cultural celebrations and observances as well as for outreach to the Navy community and the support of NEXCOM’s mission.

In addition, NEXCOM has Special Emphasis Groups that are responsible for monitoring the recruitment, selection and development of associates who are female, of Hispanic descent or individuals with disabilities.

“These groups also raise awareness of the importance of diversity and demonstrate the command’s commitment to a model diverse workplace, where all individuals can believe that they are an integral part of the operations,” said Candy Phillips, director of Diversity & Workplace Culture at NEXCOM.

This is the 13th straight year that AAFES has made this prestigious list. According to the Exchange, 12 percent of its workforce are Latina.

“The Exchange champions the diversity of its workforce and values inclusiveness,” said President and Chief Merchandising Officer (CMO) Ana Middleton, the Exchange’s highest-ranking Latina woman.

“Our nation’s military is made up of service members from all backgrounds, and having a diverse team ready to serve Soldiers, Airmen and their families is critical to the relevancy of the Exchange benefit.”

Best regards,

Stephen Rossetti

President

Presidents Message/Washington Update 9/24

Quotes of note

Our third line of effort drives us to reform the Department for greater performance and effectively manage our Fourth estate, which includes organizations such as the Defense Logistics Agency, Defense Health Agency, and the Missile Defense Agency.  In doing so, we are redirecting our time, money, and manpower to our highest priorities while maximizing the use of every taxpayer’s dollar. We have made great progress on this front with our Defense-Wide Review, where we identified $5.7 billion in defense reforms and efficiencies across the Fourth estate last year, and we are on track to identify billions more this year.  We have also directed our Military Services to conduct clean-sheet reviews to identify savings and efficiencies, as well as to develop their plans for reform to the NDS.  Our Combatant Commands are going through a similar review to consolidate and reduce legacy requirements in order to optimize our operational footprint.  Secretary of Defense Mark Esper speaking to Rand Corporation September 15, 2020.  DeCA is part of this review and funding for the agency is being scrutinized.  The review also includes the Community Reform Task Force that is examining consolidation of resale programs including commissaries and exchanges.

Right now, and this may sound odd, our focus is less on sales and more on getting the experience RIGHT.  Our overall retail sales are up over the last three months and while we are seeing our customers visit us less, they are buying more when they shop. In our most recent brand health study, with over 12,000 participants, all of our metrics went up – Satisfaction, Connection to the Military, Value Offered.  Our Foresee Satisfaction scores on a 12-month rolling basis are up both in our physical stores and online. So, we know what we are doing is resonating. That gives us the ability to focus on getting the Drive/Up, and eventually BOPIP, experience right because we know the sales will follow.  Rich Honiball, NEXCOM Executive Vice President, Global Merchandising & Marketing Officer commenting in an upcoming piece by ALA business correspondent Larry Lapka on curbside service and delivery.

Candidates Trump and Biden on military quality-of-life programs. 

Trump: It isn’t only those in uniform who serve our great country but their families too. A heavy burden is placed on our military families and their unwavering dedication and support strengthens our entire nation. Military spouses help carry families through frequent moves and long deployments. They uplift communities, care for fellow military families, and sustain servicemembers through their most difficult battles. One of the great challenges for military spouses is to find a meaningful job as they move in support of their active-duty spouse. We want military spouses to be able to pursue their careers and help their families thrive. All too often military families who are ordered to move across state lines lose the chance for the civilian spouse to practice their chosen profession and have to go through costly and time intensive re-licensing. This administration is committed to continuing to fight for military spouse license portability.

 

Additionally, the Department of Defense is committed to ensuring privatized housing tenants receive quality housing and fair treatment from the Military Housing Privatization Initiative project owners that operate and maintain privatized housing. The tenant bill of rights for military families signed earlier this year helps protect our military families and is much needed progress in the right direction.

 

Finally, the most recent National Defense Authorization Act improves education, childcare, and private housing for military families, and it ends the so-called “widow’s tax,” which blocked benefits for families of fallen heroes. It also included the largest pay raise for the military in more than 10 years.

 

Our nation is eternally grateful to our military, military families, and veterans. I will continue to serve them as they have served for us.

 

Biden: Family readiness is a national security imperative. The care for this community cannot be taken for granted. My administration will treat military families as the priority that they are by: ensuring that we pay servicemembers a competitive wage; creating and promoting programming to increase economic opportunity and career advancement for military spouses; providing resources for military families, caregivers, and survivors; prioritizing support for military-connected children; and relaunching Joining Forces, the initiative started by former First Lady Michelle Obama and Dr. [Jill] Biden during the Obama-Biden administration. The Bidens are a military family, and we know that military families serve, too. After two decades of sustained warfare it is our duty to ensure that military families have the necessary support to thrive.

Government shutdown update.  Last week we reported there was a 20 percent chance of a Federal government shutdown.  The end of the fiscal year is getting close and that 20 percent is in play.  The House of Representatives will vote on the bill as early as today.  It will pass.  Then the Senate has to take up the Continuing Resolution.  The House Speaker, Nancy Pelosi is objecting to White House proposed funding for farmers.  Republicans are blaming Pelosi for backing out the agreement and Democrats are claiming they never had a deal in the first place.  Senate Majority leader Mitch McConnell is critical of the House bill.  The Senate will vote on an amended version of the House bill as early as this week.  Then more sand in the gears as some House progressives are saying that the Government funding should be used as a card in the plans to replace nominate and confirm a new Supreme Court justice.

Experience dictates that one of two things happens when we get to this stage.  They either agree and pass a CR that takes them past the election, or they can’t agree and pass very short term (one- or two-day extensions) while they hammer out the compromise to keep Government open until after the election.   We still think it’s unlikely the Government will close this year.

We’ll keep you posted.

The House version of the CR is very good news for the Veterans Canteen Service.  I reported last week that the Veterans Canteen Service was on the on the ropes due to pandemic pain.  They desperately need a lifeline.   The House version of the Continuing Resolution provides that lifeline.  The House bill says:  “The Secretary of Veterans Affairs may transfer up to $140,000,000 (From the Coronavirus Aid, Relief, and Economic Security Act) ….to the Canteen Service Revolving Fund of the Department to prevent, prepare for, and respond to coronavirus domestically or internationally.”  We have supported this funding, applaud House appropriations members for including it, and it is critical if VCS is going to avoid furloughing its dedicated workforce.

DeCA and industry collaboration and sales-driven events continue to ramp up with the latest Joint Business Planning sessions.  The DeCA and ALA Joint Business Planning sessions begin today.  Many thanks Tracie Russ, Director of Sales for DeCA and her team—Barbara Merriweather, Rena Dial, Jessica Stables, Darrel Clary, Iveena Henderson, Bridget Bennett and LaRue Smith.  Also, special thanks to the ALA Commissary Council including Alex Sizemore of EURPAC, Stephanie Supplee of Coastal Pacific, Mike Bender of Proctor and Gamble, James Paseur of Tyson Foods and other members of the LA Commissary Council for pulling this event together.  We also are grateful to our event sponsors including:  Coast Pacific Food Distributors, EURPAC, UNFI, Unilever, Kellogg’s, Advantage Military, Bob Evans, Bolthouse Farms, Badia, and CRI Robert Irvine Foods.

ALA’s annual conference coming together.  Mark your calendar for a virtual ALA annual conference.  The event will run over three days.  The general sessions will kick off on October 20 from 10:00 a.m. to 3:00 p.m. EST.  There will be an open day on October 21 and the conference will pick up again on October 22, again from 10:00 a.m. to 3:00 p.m.  Agenda and registration details will be issued soon.  We are planning on a member meeting to conduct Association business from noon to 3:00 p.m. EST on October 19.

AAFES and ALA sessions shaping up.  AAFES President and Chief Management Officer Ana Middleton and her team and the ALA are launching a series of events to build on the successful AAFES and ALA session that was held on August 25, where Ms. Middleton announced the follow-n sessions.  It’s all part of a reinvigorated partnership between ALA and AAFES to increase collaboration toward powering sales that is being orchestrated by the ALA Exchange Council led by Michele Forman of Advantage Military.  Details of the sessions are being worked out but six are in the works:  ALA Members will be invited (invitation only) to six virtual workshops currently in planning phase as follows:

  • Hardlines Vice President Chris Burton-Collaborative discussion on but not limited to market share ideas/ ways to optimize military business
  • Consumables Vice President Eric Sidman- C-Store programs: Food/Beer/Wine/roller grill and other self-serve food programs in place in Express and other retail stores: Grab &Go/Beer &Wine/Roller Grill/other self-serve food items sold in Express and other stores. Looking for open dialogue and brainstorming post Covid limited to 20 vendors! Industry will lead session
  • Planning, Allocation and Replenishment Vice President Eric Boen: This session is back due to popular demand from our last session-Business Operations/driving growth and partnership.
  • eCommerce Drop Ship Vendors and other online services- If you are a small drop ship provider or other service vendor and want to participate in the online program this is your session!
  • New Members pathway- Shark Tank format, new members and potential new members may present their products to the Exchange buying group for consideration. If you ever wanted to sell to the exchange a service or product this is your opportunity to present to the commodity buyer
  • Product Information (PID) capability tool workshop (ongoing).

Look for registration details and register early as session attendance will be limited to enhance interaction.  Send your ideas for programs to bellis@ala-national.org.

Communicating the benefit and store and base access to resale patrons.  Last week, we announced a renewed effort to galvanize media partners to ramp up communications to patrons on store and base access limitations associated with the pandemic.  The effort is gathering enthusiastic support from all ALA media members including MyMilitarySavings, Military Media, Inc., MaxiSaver Group.  ALA will also be working with the recently launched AAFES Digital Garrison app to get the word out to patrons that resale is open for business and safe to shop.

DeCA Power DAX and Emerald deployment scheduled updated.  An update to the deployment of DeCA’s Power DAX store ordering system has been released by the ALA Industry EBS Transition leads Lauren Elkin, MR Logistics and Michael Easter of Spartan Nash.  In clouds the DeCA Emerald Schedule for FY 2020 and the DAX schedule for 2021.  Contact Lauren — lauren@mrlogistics.com or Micheal — michael.easter@spartannash.com for details.  The Association is very grateful to Mr. Elkin and Mr. Easter for their efforts to keep ALA members abreast of the latest developments in the deployment of DeCA’s electronic business systems.

Fed Mall open for pandemic PPE purchases.  Since February, ALA has been working with the Industrial Policy Group of the Department of Defense on a host of pandemic issues.  One issue is the availability of personal protective equipment and access to this equipment via the DLA’s Fed Mall.  Equipment includes non-medial face masks, non-medical gloves, hand sanitizer, and disinfecting wipes.  Resale companies needing PPE should go to www.fedmall.mil.

Retailers and Christmas.  Retailers pummeled by the coronavirus pandemic have already been making decisions about inventory, staffing and how best to connect with customers skittish about visiting crowded stores during a pandemic. The result will be a 2020 season that is transformed in fundamental ways — and unlikely to make up for the severe drops in revenue caused by the shutdowns.

Rather than enticing shoppers into stores with holiday sales events, retailers

like Walmart and Target recently said they would try to temper the crowds by closing on Thanksgiving Day and putting their best deals online earlier than usual. Instead of conversing with browsing shoppers, many store workers will be spending their time handing off purchases to people who pull up to the curb in their car.

As special as the holiday season feels to shoppers, it is crucial for stores. Holiday sales in November and December can bring in 20 percent of a retailer’s annual revenue, and 30 percent of sales for hobby, toy and game stores, while driving tremendous profitability, according to the National Retail Federation. The most recent annual report for Macy’s, which also owns Bloomingdale’s, showed that the fourth quarter accounted for 34 percent of its sales.

“What we’re really preparing for is probably the greatest e-commerce penetration within a holiday season that we’ve ever seen, and probably the largest year-over-year growth in online shopping,” said Michelle Cordeiro Grant, chief executive of Lively, an intimates and loungewear brand that mostly sells online.  On the other hand, more expensive items, like jewelry or higher end electronics, could see a boost in sales. People who haven’t lost their jobs may use the holidays as an opportunity to buy an extra special gift for themselves or their family members.

“Because some people are not spending on eating out and going to the theater and traveling, they actually have extra money to buy an aspirational product, which helps luxury and higher-end products,” said Marie Driscoll, managing director of luxury and fashion at the research firm Coresight Research.

FedEx said Thursday that it plans to hire 70,000 U.S. workers to prepare for the upcoming holiday season. That’s a 27 percent increase from last year, when the company brought on 55,000 workers to prepare for the holidays.

The announcement comes in anticipation of a holiday season in which many consumers will be housebound and reliant on online shopping — and package delivery — to buy gifts. Major retailers have already started shifting their plans to focus on e-commerce rather than in-store holiday sales events. Walmart and Target have recently announced that they will reduce crowds by closing their doors on Thanksgiving Day and putting their best deals online earlier than usual.  FedEx also announced plans to expand year-round Sunday residential coverage for its FedEx Ground service to nearly 95 percent of the U.S. population, effective September 13.  “These strategic investments will help better support what is expected to be an unprecedented holiday shipping season,” Raj Subramaniam, FedEx’s president and chief operating officer, said in a statement.

ALA is aware of and acting on the pandemic-caused patron base and store access problem.  Base commanders and local exchange and commissary officials are imposing restrictions on access.  And, it’s affecting sales because many consumers don’t know from day-to-day what the restrictions are, and many don’t bother coming at all and opt for local stores off base that they know they can get to.

Base and store restrictions are changing along with the infection rates being experienced locally.  They range from not allowing retirees on base at all, impeding or stopping access on certain days to retirees, to limiting base access to essential workers to barring eligible veteran shoppers.  At the store level, the resale agencies are imposing restrictions on operating hours. specifying days for shopping to limiting the number of people that can be in their facilities.

The problem comes when customers don’t know if they can get on base and, once they do get on base, whether they are going to be allowed in the stores.  It’s frustrating for customers to get to the gate and find out they can’t get on base that day.  Or, when they get to the store, they find out there are more restrictions.  So, many don’t bother coming at all.   That’s hurting sales at many exchange and commissary locations with DeCA reporting for the first time that active duty sales exceed other patron sales.  And, after two months of sales leaps (March and April) DeCA sales are getting clobbered by the base restrictions.  Of course, the good news is that the stores are open and there have been limited closures due to COVID infections.  That’s due to the extreme COVID prevention measures being taken by military retailers and assisted by the “mission essential” designation for commissaries that was issued by DoD in the Spring which ALA supported.

Keeping stores open and stocked is no accident.  It is the result of extraordinary efforts by ALA and its member companies up and down the supply chain including highly sensitive distribution hubs and and CPG manufacturers (particularly meat-packing plants), military sales brokers  to keep their workers safe and disinfect facilities to keep operations open, trucks rolling and shelves stocked, with most CPG companies recognizing the unique and critical requirements of the global military channel and stepping up with product allocations in a scarce commodity environment.  It’s the result of extraordinary efforts by employees and management of the resale agencies to keep exchanges and commissaries open and products moving in a sporadic surge environment.  It’s the result of shelf stocking companies and other in-store support industry workers who showed up and delivered during the pandemic.  Simply put, it’s been a remarkable collaborative and orchestrated team effort; one that kept military families supplied at a time when they faced great fear and uncertainty.  The pandemic tested the strength and resilience of the military resale channel.  Consumers had their needs met and commanders had their family readiness and mission needs fulfilled—world wide and under extraordinarily difficult conditions.

Communication…communication…communication.  The pandemic has complicated everything.  And, when you have situations where employees have to interact with consumers, it adds another dimension and extra level of complication to the shopping equation.  Infection preventive measures are of course critical.  And, once infection preventive measures are in place, communication with employees and consumers is critical to reassure them that the shopping experience is safe.  This is further complicated by base access and in-store restrictions and it is critical that we let shoppers know when they can shop.

There’s not much we can do about what base commanders determine as their need to protect their communities.  And, there’s not much we can do about how local commissaries and exchanges adapt to the changing restrictions and make determinations on the best access practices to protect their employees and customers.

But there is something we can do about informing patrons; And we are.

All of us in the military channel need to up our game on communications.  We are working with ALA member media partners to take the daily information put out by DoD and the resale commands and get that information directly into the hands of military consumers on a timely basis.  We’ll be ramping up the echo chamber by working to push information to and working with our media partners beginning with MyMilitarySavings.com (which has direct contact with millions of military consumers), and others in the print and digital media business in this channel to push information to consumers to let them know the rules and restrictions that are in place at the base gate and at the stores.

ALA gets a daily feed from DeCA that is rolled up from input they get from their stores daily.  We will, in turn, move to use this and other information to update local information to let patrons know the latest on safe stores and base access.

We will be working with the resale agencies and the installation commands within the Army, Navy, Air Force and Marine Corps to leverage their communications vehicles and enhance their media reach to get timely information into the hands of the consumers to let them know shopping is safe and let them know when the stores and bases can be accessed.

Further, we will be reaching out to the Department of Defense to work with them to get information into the hands of the military consumer as soon as possible.  DoD has a vast reservoir of information on every eligible military patron.  It’s housed at the Defense Manpower Data Center and fed daily be the military services.  We’ll be getting together with them to see how we can accelerate consumer contacts through Defense channels in concert with our media members.  We will do this through ALA’s participation in an organization called the Federation for Identity and Cross Credentialing, a coalition of organizations to examine innovate ways to access bases and computer networks.

Many of you have been seeing various HPCON levels at bases.  This is the guide for how stringent base and store access rules are imposed.  DoD has a protocol for dealing with public health emergencies.  HPCON of “Health Protection Condition” is the DoD’s term and it, in turn, provides guidance for base commanders to limit access at the gate and for base store operators to develop store restrictions.  There are five levels:

HPCON Zero (normal)

HPCON Alpha (limited)

HPCON Brav0 (moderate)

HPCON Charlie (substantial)

HPCON Delta (severe)

We’ll be updating you on the progress of the communication efforts and encourage any companies that have communications capabilities to join the effort either by direct contact with ALA Headquarters or through the ALA Commissary and Exchange Councils.

Pentagon News/Military News:

House passes funding patch to avert government shutdown
(Defense News) The House passed a stopgap spending measure on Tuesday to avoid a government shutdown and keep the Department of Defense and other federal agencies operating through Dec. 11.

Retired 3-star McMaster says he never heard Trump insult the military
(Military.com) Former National Security Adviser and retired Army Lt. Gen. H.R. McMaster said Tuesday that he never heard President Donald Trump make insulting remarks about the military and veterans during his 13 months in the White House.

3. Where Trump and Biden stand on foreign policy
(Wall Street Journal) President Trump and Democratic opponent Joe Biden have profound differences in key areas of U.S. foreign policy, but hold similar views about some major goals, including limiting troop deployments to the Middle East and Afghanistan.

Military retirees and families are getting an extension on ID card renewals
(Military.com) Military dependents and retirees now have through the end of June 2021 to access benefits using ID cards that expired this year, thanks to an extension of temporary ID card rules issued in response to the COVID-19 pandemic.

Senators push to extend care to 34,000 more veterans for Agent Orange diseases
(Military.com) Senators have ramped up efforts to add three new diseases to the Department of Veterans Affairs’ list of Agent Orange-related diseases, pressing the House and Senate Armed Services Committees to include them in the final version of the national defense policy bill.

Military personnel, families now may travel to more than half of US military installations worldwide
(Stars & Stripes) More than half of U.S. military installations worldwide have lifted travel restrictions put in place to prevent the spread of the coronavirus, according to the Pentagon.

3 Marine families file lawsuit for ‘slumlord level’ privatized housing at Camp Lejeune
(Marine Corps Times) A new lawsuit from three Marine Corps families claims the privatized landlords at Camp Lejeune, North Carolina, let military family housing fall into squalor to maximize profits.

INDUSTRY NEWS

Amazon Fresh ‘built to outlast’ other grocery retailers

(Amazon looks to reshape the Grocery shopping eexperience)

“At first glance, Amazon Fresh looks a lot like a conventional grocery store: It’s not too small and it’s not too big, it carries all the items found in a full-service grocery store, and its meat, seafood and deli departments offer fresh prepared items, grab-and-go as well as pizza,” he explained. “But a closer look reveals that Amazon Fresh is a digitally integrated grocery store, merchandised for today’s customers, that provides a seamless shopping experience. Its low break-even sales volume means that it can operate profitably in intensely competitive markets.”

Online grocery to more than double market share by 2025

Online grocery will swell to 21.5% of total U.S. grocery sales by 2025, more than doubling its current share of the overall grocery market, a new study by grocery e-commerce specialist Mercatus and research firm Incisiv projects.

Grocery Retailers continue to push on-line shopping:

Southeastern Grocers expands on-demand delivery with Uber partnership 

Lowe’s looks to invest in diverse entrepreneurs 

Lowe’s has launched a pitch contest in partnership with Daymond John of “Shark Tank” that aims to advance diverse small businesses and entrepreneurs. Participating businesses will be able to receive mentoring from John and pitch their products directly to top Lowe’s executives, in the hope of getting their products on the home improvement retailer’s shelves

Report: Retail sales continued to rebound in Aug. 

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(Spencer Platt/Getty Images)

US retail sales grew 0.6% in August from the previous month, marking the fourth consecutive month of growth, according to the Commerce Department. Overall growth slowed from 1.2% in July as some consumers’ additional unemployment benefits ended, but sales of clothing, furniture and electronics rose as families prepared for a back-to-school season that for many meant

RESALE NEWS:

Focusing on family meals: Commissaries help customers save money as they shop for the products to cook more at home

at the Naval Base Norfolk, Virginia, Commissary. The Defense Commissary Agencyhopes military families focus on …

Commissaries honor Air Force’s 73 years of service

supplied by the Army Quartermaster Corps. AFCOMS managed Air Forcecommissaries until the creation of the Defense …

Defense Commissary Agency Privacy Act Program

‘s website. The Defense Commissary Agency will publish any future internal policy implementing the Privacy Act in DeCA …

Military AutoSource Partners With TrueCar To Expand Its Program To The U.S.

of Military AutoSource is authorized by The Exchange (AAFES) and Navy Exchange (NEXCOM) and maintains operations in close to 70 …

Naval Base Guam visitor control center to reopen following thorough facility disinfection

guidelines from the Centers for Disease Control and Prevention and Commander, Navy Installations Command (CNIC). On Wednesday, …

Army & Air Force Exchange Service Celebrates 100th Starbucks Location

-964-6940. Facebook-friendly version: The Army & Air Force Exchange Service’s 100th Starbucks retail licensed store had its grand…

Mark your Calendar

Date                                               Event                                              More Information

Pending Coordination                 NEX-MCX Virtual Update                           TBD

Pending Coordination                  AAFES-Industry Virtual Work Shop’s         Consumables TBD

October 20,and 22 , 2020                   ALA National (Virtual) Convention           Virtual Event