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

Posted in .

Leave a Reply

Your email address will not be published. Required fields are marked *