Presidents Message/Washington Update 11/12/20

Quotes of note

 “I am concerned that we not go too far in the assessments by management offices without equal input from policy officials. I use as an example, the DoD Education Activity and Commissaries.” “These institutions are ripe for efficiencies, but they are also highly ranked benefits by our military families. A pure business approach to these and other areas might result in measures that might save money but have an adverse impact on our military families and service member retention.”  Todd Weiler, assistant secretary of defense for manpower and reserve affairs under President Obama.

“During the COVID-19 pandemic, our lifestyles have significantly changed. Teleworking, homeschooling, and families at home are causing extreme spikes in demand for laptops, printers, home office supplies, kitchen appliances, exercise equipment, etc. Major shifts in consumer buying, combined with COVID-related manufacturer and supply chain constraints, are creating product availability challenges across the retail industry.”  AAFES CEO Tom Shull.  

“Of course, product on the shelf … that is our number-one priority and number-one ask right now as we are going into the holidays.”  DeCA Director of Sales Tracie Russ at the ALA November 11 Joint Business Planning Conference. 

“You don’t want to put something on promotion, and then the consumer looks through the circular and says, ‘I’m going to go to the store and buy that,’ and then you can’t get it, right? You have to be very selective about what you’re going to promote now, and you try to get guarantees from your supply lines that it’s coming in. But even with all of that, it doesn’t happen. That’s what we’re all dealing with.”  Krasdale’s CEO Steve Silver.

Saluting our Veterans.  Today the Nation pauses to honor its Veterans.  The ALA and its member companies are proud to be associated with the military resale system and with virtual and on-base support services–a powerful engine in providing support to our Veterans not just today but each and every day of the year.  We salute the sacrifice of today’s generation and all of the generations that came before this to preserve our cherished freedom.  A series of  “In Recognition of” events are being held throughout November, the Army and Air Force, Navy, Marine Corps and Coast Guard exchanges and Defense Commissary Agency are joining forces to salute the selfless service of all who have worn the nation’s uniform.  ALA is a proud sponsor of these events.  

 Since 2017, Army & Air Force Exchange Service (AAFES) shoppers have donated nearly $2.46 million to Army Emergency Relief (AER) and the Air Force Assistance Fund (AFAF).  It’s a partnership that has taken on even greater importance during the COVID-19 pandemic.  “This has been an exceptionally difficult year for our military community, but some have been hit harder than others,” said Exchange Director/Chief Executive Officer (CEO) Tom Shull. “Making a contribution to AFAF or AER is more appreciated than ever as the necessity for support increases.”  The Exchange gives shoppers the opportunity to donate to AER or AFAF every time they make a purchase in stores or online at ShopMyExchange.com. The Exchange also connects shoppers with the organizations’ critical support resources through the online Exchange Community Hub.  Additionally, the AAFES-administered Military Star Card offers support for cardholders experiencing hardship as a result of COVID-19 as well as natural disasters.

 AAFES is providing careers for the military community as it closes in on its goal to hire 50,000 Veterans and military spouses by the end of 2020. Since 2013, the Exchange has hired more than 46,000 Veterans and military spouses. Today, approximately 85% of Exchange associates share a connection with the military.  “Working for the Exchange is a Quality-of-Life force multiplier for military families, with Veterans and spouses receiving hiring preference. The Exchange’s associate transfer program gives military spouses an opportunity to retain employment through PCSs, allowing them to keep their benefits and offering retirement opportunities as they move with their Soldier or Airmen,” said AAFES CEO Tom Shull.

 Happy 245th Birthday U.S. Marine Corps.  A message from General David S. Berger sums it up…some excerpts: “In a world of seemingly relentless change and uncertainty, some things remain constant–our core values: Honor, Courage, and Commitment. These values are at the very heart of our ability to be, “most ready when the Nation is least ready.” It’s honor that gives us an uncompromising sense of personal integrity and accountability; courage that allows us to face any circumstance with an ironclad resolve to do what’s right; and commitment that binds us together as a family and drives us toward excellence. And while our core values might never change, the way we give life to them requires constant vigilance. This year’s national conversations about race remind us that we must all do better to embody our service’s values.

 “Commemorating the 245th birthday of our Corps offers us a chance to reflect on our history. We who serve today stand upon the shoulders of giants. While this year’s many challenges are significant and unique, they are not unprecedented, and it is important to remember that our Nation and Corps have endured difficult times in our past. This year, for example, marks the 75th anniversary of brutal battles in the Pacific; when soldiers of the sea defined the term “uncommon valor” on the black sands of Iwo Jima; the 70th anniversary of bitter fighting at Inchon and Chosin Reservoir; 55 years since Marines landed at Da Nang; and a decade since our struggle with the Taliban in the Helmand River Valley. We remember the service and sacrifice of all Marines, and honor the legacy passed down through generations.”

Senate appropriators move their Defense Bill—DeCA appropriation and Tobacco limitations.    DeCA funded at budget request of $1.146 billion.   Military pay raise of 3 percent.  The Committee also included this language on Tobacco: “Tobacco Use in the Military. —Tobacco use is the leading cause of preventable death in the United States, with more than 480,000 deaths attributable to cigarette smoking each year. The Department of Defense has affirmed the goal of a tobacco-free military and has implemented a range of programs including public education campaigns, the banning of all tobacco use during basic training, and the prohibition of tobacco use by instructors in the presence of students. The Committee supports the Secretary of Defense’s Policy Memorandum 16–001 from April 8, 2016, directing the military services ‘‘to ensure a comprehensive tobacco policy that assists with preventing initiation of tobacco use, helping those who want to quit using tobacco succeed, and decreasing exposure to second-hand smoke for all our people.’’ As a result, the Committee retains a provision from the Department of Defense Appropriations Act, 2020 (Public Law 116–93) directing the elimination of the price subsidy provided to tobacco products at military exchanges.”

Senator Tom Tillis (R-N.C.) wins re-election after his opponent conceded.  Tillis is the chairman of the Personnel Subcommittee, Senate Armed Services Committee.  This subcommittee has jurisdiction over military resale matters.  Tillis’s win raises the stakes on a run-off election in Georgia in January that could decide who controls the Senate.  

McDonalds menu changes.  McDonald’s Corp. is making changes to its menu and restaurant operations as the corona-virus pandemic persists, including an emphasis on to-go orders and new “McPlant” vegetarian items. The burger company said Monday that it would test a slate of new plant-based products in some markets next year.  Many chains have cut deals with plant-based meat manufacturers last year, including Burger King’s partnership with Impossible Foods and Dunkin’ Brands Group Inc.’s deal with Beyond Meat. Beyond Meat and Impossible Foods have both added manufacturing capacity to meet rising demand for their products. McDonald’s said it is also exploring its own delivery service in some markets with high demand, including Australia and Germany.  Rising numbers of coronavirus cases are closing dining rooms in some places again. McDonald’s said government restrictions on restaurant hours, dine-in capacity and dining rooms since September are hurting its operations, particularly in markets outside the U.S. such as France, Germany, Canada and the U.K.  McDonald’s recently set a plan for closed dining rooms in the U.S. to reopen if cases of Covid-19 fall locally over time.

 Military resale paragon.  A huge shout out to a great advocate for military folks.  Michael Kelly is celebrating 50 years with DoD.  Mike has “Re-enlisted” in DoD after dealing with some health issues.  Kelly is currently Special Assistant to the Deputy Assistant Secretary for Military Community and Family Policy.  Art Myers, another long-time DoD resale advocate and colleague of Kelly said: “When I was Deputy Director of Services and later Director of Services, Mike Kelly was the one person I could always depend on to assist in whatever, seven days a week/24 hour a day!”  I also have been privileged to work with Mike over the years.    Mike, thank you.  Our system, our military and the Nation is better off because of your service and we wish you and yours health, happiness and continued success. 

 Vaccine next month?  General Gustave Parna, head of Operation Warp Speed, says:  “I think a safe and effective vaccine will be available initially in December.”   Perna is chief operating officer for Operation Warp Speed, the government’s initiative to fast-track the development, manufacture and distribution of COVID-19 drugs and treatments. The tens of millions of vaccine doses that Perna says could be available in December is the combined number of vaccine doses that Pfizer and Moderna, manufacturers of the two candidates furthest along in clinical trials, could have ready to ship by then. Being prepared to have large quantities of the COVID-19 candidate vaccines ready for distribution as soon as one is authorized as safe and effective by the FDA has been a major feat of planning and coordination that runs counter to the typical drug and vaccine development process.  “Generally, you don’t start manufacturing a vaccine until you have an [approval],” Perna explains. But waiting for an OK from the FDA before ramping up production would have greatly prolonged the timeline for getting a COVID-19 vaccine out to the public.  So early on, the Operation Warp Speed team invested in manufacturing capacity. “We needed brick and mortar,” Perna says. “We needed trained employees. We needed to have all the materials, and we needed very technical machinery to produce the vaccine.”  “We started executing manufacturing requirements in parallel with the development and the trials of the vaccines,” he says.

“We’re partnering with commercial industry to do the actual distribution, because they know how to do it,” he says, “They do it every year, with influenza and other medications and vaccines.”  Pfizer has an assembly center in Kalamazoo, Mich., and plans to use private carriers such as UPS and FedEx to deliver vaccines to hospitals and vaccination sites. Vaccines from Moderna and other Operation Warp Speed candidate vaccines would likely be moved by the medical supply company McKesson, which has a contract with the government to distribute COVID-19 vaccines.  The government will be allocating initial vaccine supplies to which will then be responsible for getting shots into people’s arms and determining which groups get priority for those first doses. “Some of the jurisdictions have thought about mass [vaccination] campaigns. Some are going right to brick-and-mortar and working with CVS and Walgreens. Some are going to utilize their hospitals,” and the places people can go to get vaccines may shift as more doses become available, Perna says.

Outlook for Defense under Biden.  Under a Biden Administration analysists are saying drastic cuts to Defense are unlikely.  Republicans have historically supported a large defense budget, and most Democrats showed earlier this year that they don’t support deep cuts either when the party’s progressive wing unsuccessfully pushed for a 10% cut to use the funds to tackle the fallout from the coronavirus pandemic.  The size of the fiscal 2021 defense budget is already locked in under a bipartisan budget agreement, and the next president’s 2022 budget request is due in February.  More details of the defense programs Biden may want to prioritize — and those he may want to cut — will only come with the 2023 budget request, according to Todd Harrison, the director of defense budget analysis at the Center for Strategic and International Studies and a frequent ALA speaker.   “It’s not until you get to the second budget request of a new administration that you start to see real change, because that will be one that they developed from the beginning to the end,” he said.  Also, under a Biden Administration, several Trump policies would be slowed or killed including the wholesale relocation of forces from Germany and the Executive Order on Diversity Training. 

 The Presidential Election hasn’t been officially decided yet, but the Biden Defense Department transition team is shaping up.  Kathleen Hicks, a senior vice president for the Center for Strategic and International Studies, will lead the DoD team. Hicks had several roles in the department under the Obama administration, including as principal deputy undersecretary of defense for policy and deputy undersecretary of defense for strategy, plans, and forces.    Other team members include:

Debra Wada, a former assistant secretary of the Army (Manpower & Reserve Affairs) and longtime House Armed Services Committee staffer

Sharon Burke of the New America think tank, a former assistant secretary of defense for operational energy

Susanna Blume of the Center for a New American Security, who served as deputy chief of staff for programs and plans under Bob Work

Lisa Coe of OtherSide Consulting, a defense industry consultant

Melissa Dalton of the Center for Strategic and International Studies, who has held a number of jobs in the Pentagon

John Estrada, a Marine Corps veteran who was appointed as ambassador to the Republic of Trinidad and Tobago towards the end of the Obama administration

Victor Garcia of Rebellion Defense, a former director of engineering for the U.S. Digital Service

Karen Gibson, a retired Army lieutenant general who retired in March as deputy director of National Intelligence for National Security Partnerships

Michelle Howard, a retired four-star admiral who became the first woman to serve as vice chief of staff for any military branch

Andrew Hunter of the Center for Strategic and International Studies, a known acquisition expert

Mike McCord of the Stennis Center for Public Service, a former DoD comptroller during the Obama administration

Farooq Mitha, who served as special assistant to the director of the Department of Defense Office of Small Business Programs under Obama and as a senior advisor on Muslim American engagement for the Biden campaign

Frank Mora for Florida International University, a former deputy assistant secretary of defense for the Western Hemisphere under Obama

Michael Negron, a Navy vet with ties to former Obama Chief of Staff Rahm Emanuel who is currently assistant director at the Department of Commerce and Economic Opportunity to the state of Illinois

Stacie Pettyjohn of the RAND Corporation, an expert in wargaming who works on strategy and doctrine issues

Ely Ratner of the Center for a New American Security, Biden’s deputy national security adviser during the Obama administration

Deborah Rosenblum of the Nuclear Threat Initiative, a nuclear expert who has been part of negotiations with North Korea

Lisa Sawyer of JPMorgan Chase, who worked a number of jobs at both the Pentagon and National Security Council

Shawn Skelly of CACI International, a Navy vet, former commissioner on the National Commission on Military, National, and Public Service and vice-president of the Out in National Security group

Terri Tanielian of the RAND Corporation, who focuses on military and veteran health issues

Veronica Valdez, a former special assistant to both Navy and Air Force leadership, currently with the Port of Seattle

Transition fun fact.  During the transition from one Administration to another, 4000 government jobs are at stake, including 1250 that need Senate confirmation.

One-Source mobile app.  The Department of Defense launched a new mobile app that quickly connects service members, their families, and survivors to resources and support to help them rejuvenate, be well, and thrive. The My Military OneSource mobile app is now available for free download on Google Play and Apple’s App Store.  The My Military OneSource mobile app provides a customized way for users to experience one of the military’s flagship support programs – Military OneSource. The app offers a fast, 24/7 gateway to personalized military benefits, access to experts, guides for the military, and much more.   “We are excited to offer an innovative, personalized approach to receiving support, resources, and expertise through the My Military OneSource mobile app, in the same way our folks are used to receiving other information in their lives” said Matthew P. Donovan, Under Secretary of Defense for Personnel and Readiness. “The Department of Defense is committed to providing valuable support to help our military service members and families thrive, and this mobile app was developed with their needs in mind.” 

House and Senate Armed Services are expected to soon launch negotiations to finalize their competing two NDAA bills by early December.  A number of policies affecting resale programs are included in the negotiations. 

December 11 is the latest government shutdown threat.  But most say that the Congress won’t let appropriations expire and will continue to keep the Government open.  What’s in question is whether they will get a full year appropriation or kick the can another few weeks or months until they can get their act together on funding the Government for the remainder of 2021. 

Stimulus II.  What’s more in question is another Stimulus Bill.  A deal is on the table, but complicated election politics is creating serious questions as to whether they can agree.  Stay tuned.   

Retail Darwinism.  It’s survival of the fittest or survival of the companies that had strong balance sheets going into the pandemic.  Note:  After vaccine progress was announced on November 9, Simon Properties (mall real estate firm) stock rose 28 percent.  Ralph Lauren up 20 percent, Nordstrom up 26 percent, Gap up 8 percent. 

Hy-Vee grocers has deployed coronavirus testing to 165 drive-thru pharmacies and extended testing hours at 21 drive-up pharmacy locations.  To get a COVID test from Hy-Vee, customers must first online to receive a test voucher number, at which time they also will be given a specific testing site and an appointment time. Individuals don’t need to have COVID-19 symptoms to be tested, the retailer noted.

Logistics payrolls soared in October as inventory restocking after coronavirus lockdowns and strong online sales fueled a hiring surge at distribution and transport companies.  Warehousing and storage companies, which include the sites where workers fulfill online orders, added 28,100 jobs in October, the third straight month of gains. The sector has added 76,500 jobs since October 2019.  Parcel carriers that deliver packages to homes and businesses also notched gains, adding 8,300 jobs last month. Courier and messenger payrolls have grown by 98,800 positions since February as carriers scrambled to meet a wave of delivery demand that has some companies putting off potential new customers until next year.

Adobe Analytics, which tracks activity on thousands of websites, expects U.S. online holiday sales will total $189 billion, up 33% from last year.

LaserShip Inc., a regional delivery company in the eastern U.S., put conversations with new customers on hold in July to ensure it had enough capacity to serve existing clients. “I can’t burn what’s in my right hand to pick up something in my left,” said Josh Dinneen, LaserShip’s chief commercial officer. “We’re not starting new business until January.”  Trucking companies, riding a wave of strong freight demand, added 9,600 jobs in October as retailers and manufacturers rush to restock depleted inventories after months of lockdown. It was the second-largest gain in hiring since April, when the pandemic brought much of the U.S. economy to a halt and the sector lost 92,000 jobs. Many trucking companies now are reporting difficulty bringing on new drivers

The lack of widespread contact tracing in the U.S. has made it difficult to determine whether restaurants are facilitating the spread of the coronavirus, but federal and state studies indicate some connection. A U.S. Centers for Disease Control and Prevention survey in September found that people who tested positive for Covid-19 were about twice as likely to have dined at a restaurant within a two-week period as people who tested negative for the virus.

Hormel supports Marine Corps families.  Hormel, Inc. has come up with a way to partner with USO-Metro to celebrate U.S. military servicepeople and their families in a safe manner. Enter the summer evening drive-in movie.  Working from their home offices near Austin, members of the Hormel® Natural Choice® brand team worked in collaboration with the USO-Metro team to stage the Good Feeds Us All event on Marine Corps Base Quantico, near Triangle, Virginia. Families – many of whom had never experienced a drive-in movie – were treated to a showing of “Spiderman,” food from Hormel® Natural Choice® and an opportunity to be together and with other families serving the United States in the midst of a pandemic. Members of the USO-Metro team and local volunteers helped execute the celebration.  “Those types of events create really special memories that bond the family,” said Col. William Bentley, CEO of Marine Corp installations, national capital region Marine Corps based Quantico. He added that in all activities aimed at bringing people together, USO activities among them, food is integral. “I don’t think you can have any event without a gathering around the table, so to speak. It really just creates that community-type feeling where you’re breaking bread and you’re sharing with other people.”

Collaborating for sales increases.  ALA’s Larry Lapka reports on the November 10 ALA and DeCA’s joint business planning session as DeCA’s Tracie Russ and her team of category managers work with industry to drive sales.  (Special thanks for engineering the conference to the DeCA team Tracie Russ, Barbara Merriweather, Bridget Bennett, Darrell Clary, Iveena Henderson, Jessica Stables, LaRue Smith, and Rena Dial.  Also, to ALA’s Stephanie Supplee (Coastal Pacific Food Distributors), Mike Bender (Procter and Gamble), Amanda Herold (EURPAC), Alex Sizemore (EURPAC), and Andy Harb (A.C. Nielsen).  Thank you to sponsors of the DeCA Joint Business Planning Session:  Sandboxx, Unilever and Kellogg’s, Advantage, and Purina.)

Availability of product on store shelves and ensuring that the products that patrons want are available in their local commissaries, was the over-arching theme.

 The event highlighted the problems the commissaries were having in keeping shelves fully stocked during the pandemic, and how a union of agency executives and business leaders, together, will help to alleviate empty shelf problems.  “Of course, product on the shelf … that is our number-one priority and number-one ask right now as we are going into the holidays,” said DeCA Sales Director Tracie Russ. “Please help us with identifying the appropriate products that should be on the shelf.”  Russ characterized that as “something of a strange ask, because we have presented these items to you, we have identified them in the system, and the stores should be ordering them.  “But we all know that the supply chain is challenged, and there are items that are on allocation, there are items that are not coming in, we’ve ‘H-coded’ some items, and there are some items that are still sitting with regular stock codes, we’re having challenges with.”

 Russ stated that both DeCA and its industry partners “need to help the stores execute and present full shelves. Are the shelves going to be what every planogram looks like? Maybe not. The shelves might have facings spread out of items that are available. The shelves might have some one-time-buy (OTB) opportunities. The shelves might have a full shelf of the same item. “It might look different than our planograms in several of these categories that are severely challenged, but you want to present a full shelf as we are moving through the holidays and into the new year, and until we can get the supply chain under control.”

 Russ said that DeCA is “going to need some help with” H-coded items. “We have seen some movement on some of them, we don’t have items H-coded as we once had — we’ve either moved them into a ‘P-coded’ status or we have returned them to their original RSL code — but I am not sure that all the items that should be H-coded or even turned off for ordering have been done so.

 “We need your help in identifying these items. We need you to work with each of the category teams to review these items and let us know the status. It is not helping us to have the stores order these items over and over and over again; in fact, it is making our fill rates look worse. As you continue to order an item and it doesn’t come in, it just piles on with the fill rate. We would like to move some of the noise out of the system so the stores can focus on the items that are available. “If the item is not coming back to the shelf this year, we want to move it out of ordering. We want to focus on items that are available.”

 Russ asked, “How can we help the stores present full shelves? My team is working with many of you trying to manage all of the items that are constantly changing from available allocation to not available, and product availability, product on shelf is our top concern, right up there with our savings.

 “Having the product available is a priority. It doesn’t do any good to create these plans to promote the savings if when the customer comes in to make a purchase, the product is not available. We have fallen short, and we are at that time of year when customers are buying all of their holiday meals, and we want them to think about the commissary when they are purchasing for the holidays.

 “So, I ask you, do you have suggestions, ideas, other ways of doing this? We are open to these suggestions. We want product on the shelf when the customer goes in to purchase product.”

 Russ noted that she, herself, does about 98 percent of her grocery shopping in the commissaries and she has seen an interesting situation developing with her fellow shoppers.

 “The perception to the customer is that when they see certain categories are empty, if the rest of the store is full, the thought is, ‘I spent $250, but that commissary didn’t have anything I wanted to buy. They didn’t have my items on the shelf, my favorite items.’

 “Other retailers are filling their shelves with other or optional items, and we need to do the same in these categories to the extent that it is possible.”

 Russ asked attendees, “Bring us your ideas, but right now, please concentrate on product on the shelf. Please work with us, tell us what is going on, help us to get through this time and have product on the shelf during this holiday time, so when the customer goes to shop the category, there is selection there. There are full shelves.

 “We want customers to love their benefit, and we need product on our shelves.”

 DeCA’s category management team was present at the meeting, and some gave their input about filling store shelves, or at the very least giving the perception that the shelves are fuller.

 Russ said that this team has been out to as many stores as possible in recent weeks, and “we can see the struggles the stores are going through. That’s why we really need to focus in on the products that are available. We’ll worry about the fallout after we get through this, but right now, we need to focus in on products that are available.”

 Category Manager LaRue Smith noted that thus far, it appears that DeCA’s needs, from his perspective and categories, are aligned with those of industry.

 “We did not see the COVID-19 coming,” he said. “We got hit in the face with a pile of bricks. But when we came together, collectively, that is when things started happening. I am proud to say that the partnership and collaborative spirit gave us a real jump start. We are not out of the woods yet, it is still going on, but with your help and your support, we have successfully provided our customers with those high-demand items, like face masks, sanitizers, thermometers and more. And we are still working on it. Things are going to get better, as long as we stay together and continue pulling in the same direction.”

 As far as health and beauty care items, Smith said that with the situation at hand, “We’re not going to even attempt to do everything, but we have landed on some core things. We are aligned. Product availability for the next year … we have to keep on focusing on having products on the shelves. If we don’t have that, the customer won’t come, and if they do come, they are not going to stay.

 “Tie-ins, we are going to focus on that, expand store brands where it really makes business sense to do so, we’re going to lean heavily in that direction. New item innovations, that is the lifeblood of any category, so we are going to have to be quicker and decisive. We have to work quickly to take advantage of those new item launches.”

 Smith also said that social media engagement is an area that he would like to see “taken to the next level. Young shoppers and single shoppers are not coming to the commissary. We have got to find a way to literally engage our shoppers who have this valuable benefit so they will take advantage of it. We need to take advantage of those new item launches so that we can actually give these groups some incentive to want to come to the commissary.”

 Smith added that the annual promotion plan “will be put back on the table. We realized how much value was involved in that, because with the amount of investment that you are putting into the promotional bucket, we want to take full advantage of that.”

 He concluded, “We are going to have to take our collaborative partnership to the next level. We are in a war here to grow sales, and to stop those lagging sales.”

Category Manager Darrell Clary talked about issues related to packaged meat. “As I toured stores … sales are down to flat, but if we could get over the hump, and the way that we do that is to fall back on things that Tracie talked about which was product on the shelf, and I am looking for anything that is in the supply chain, and converting club packs, because of the size of families in DeCA, was more conducive for us to move in that direction.

 “All I want to do is to remind everyone that as these items become available in the supply chain, even if we don’t carry them, get those in front of my team so we can get them in. As Tracie said, we’ll clean up the pieces later, but that category is very important, and critical, for DeCA to continue to grow and to meet that sales demand. We are working toward that and it is progressively getting better.

 “But when I get to the store, some of the reps are complaining that they are working it, and they are not holding, and when you see that, especially as it related to our Top 50 stores, I want to know about it, so I can get involved to trying to convey that message. To me, everything has to do with sales at the register. Sales are starting to come back, we are getting closer to that flat to down threshold, but until that is above, it will always be a concern to me, because it is the only measurement I have.”

Category Manager Rena Dial said there is “no use” in bringing one-time buys into the stores “unless they are getting onto the shelves. If we can continue to get these items, we can merchandise as a one-stop shop. But it takes all of us working together.“We have to communicate with the stores. That is part of our problem. We are not communicating. We go in and see what is missing but allow them to know that you are looking too and that you are willing to help them.”

 Dial said as far as new innovations are concerned, “We want them to roll out when they are seen or advertised on the TV. Set up a desk with new innovations, and then our customers know that we have these items for them also.”

 Category Manager Bridget Bennett spoke about opportunities for cross merchandising. “We can create a joint display, there are so many items that we can do this with. Let’s coordinate it. I have a sales plan for the entire year.

 “It is difficult right now, with the restrictions, with the less frequent shopping … but we are trying to take advantage of whatever we can. People have money, they want to have flowers on their desks because they are sitting at home working. They are not going out to eat. So, there is a lot of opportunity in my department.   “Let us help you guys figure out what works with what we have.”

 Andy Harb, associate client manager at Nielsen, noted that store restrictions placed on DeCA stores during the early months of the pandemic had a major impact on the agency’s performance during fiscal 2020 “due to shoppers just not being allowed to get on the military bases.”  Although DeCA shoppers had larger baskets, trips to the base were down due to these restrictions, many of which have since been lifted or relaxed.

Other topics that Harb discussed with numerous statistics backing the findings and recommendations included online and club stores getting more of DeCA patron’s dollars; the paucity of promotions leading to higher prices; the opportunity for the agency to grow sales in selected segments; and the ability of DeCA to expand its reach with store brands, an area which has shown strong growth in the overall supermarket industry as consumers prepare for an uncertain economic future.

 Pandemic grocery supply chain insights.  Revealing interview with Krasdale’s Steve Silver on pandemic supply chain.    Krasedale operates around 300 grocery stores in the Northeast.  It’s CEO had some revealing remarks recently in an interview in Supermarket News that are worth noting.   

“What’s very unusual about this episode is the supply chain is still disrupted. We’re a company that has historically fulfilled on 98% to 99% of what we would get. These days, on a good day, we’ll hit 80%. But it’s not because of us; it’s because we can’t get supplied.”   “The manufacturers, for whatever reason, haven’t tooled up appropriately, or maybe they didn’t think it would last this long. For a small or midsize regional distributor like us, we go to the bottom of the list in terms of priority. We’re certainly not Walmart, Costco or Amazon. So, it’s a constant battle to keep the supply chain going. And as you know, we don’t have a locked in audience. Our customers buy from us because it’s good to buy from us.”

“In the beginning, it was the paper products and the cleaning products, but it quickly gyrated right over to the food products. And it still is. You get one vendor under the control, and then another one goes sour on you. Again, if we’re able to fulfill on 80%, we’re doing a good job these days. And again, it’s not because we can’t ship it out; it’s because we can’t get it in. As a consequence of that, it adds a lot of cost to the system. In this business, since you’re working on such small margins, you’ve got to send out trucks full. And when you expect them to be full and they go out with 30% air, it causes a lot of problems. And that just walks its way down the supply chain. Stores can’t fill their shelves, and consumers get angry. It’s gotten better, but you would think that after six or seven months of this, we’d be closer to being back to normal. And we’re not. I don’t see anything on the horizon that says we’re going to get there anytime soon.”

“If we couldn’t get branded product, they [customers] would take our product as well. But we had a hard time getting our product in as well. With private-label product, most of it is packed at the same time as the growing season. So, if there’s a big spike in demand, and we run out of private-label product, it’s going to be a while before we get it back in. The supply issues have been across the board.”

“Because they’ll fill their shelves. They’ll get product from whatever sources they can get, just to have product in their stores. Nobody likes to look at empty shelves. And in this business, which is highly promotionally driven, it’s been very difficult. You can’t run promotional programs and sales and marketing programs that you had in place. It’s been a big scramble.”

“You don’t want to put something on promotion, and then the consumer looks through the circular and says, ‘I’m going to go to the store and buy that,’ and then you can’t get it, right? You have to be very selective about what you’re going to promote now, and you try to get guarantees from your supply lines that it’s coming in. But even with all of that, it doesn’t happen. That’s what we’re all dealing with.”

“The guys that we source from are all having the same issues, maybe less severe than us or maybe worse than us. Our frozen, dairy and meat suppliers — we’re all under stress. As you know, we have many longtime, loyal customers. What we do better than anybody else is provide personal service and a lot of expertise to our stores. We have a big field force out there that helps our retailers operate. And that went dormant. Obviously, you couldn’t put all your people on the street at once, and that’s a big advantage we have over everybody, our personal contact with our customers. There’s only so much you could do via Zoom.”

“They just want the product from us. They were all struggling themselves. Fortunately, most of our operators stayed open. We had a few that had to close because they had problems with the illness. They were dealing with a lot more anxiety and panic than we were.”

“Anything you can get your hands on, staples products — canned vegetables, pastas, rices. As long as it has a shelf life, and you can get it, we can stockpile it. We’ll put it in outside storage, we’ll keep it here and we’ll spend the money to move it around.”

“Most of our produce suppliers, I think, are pretty much back normal. You’re going to be out here and there with certain items. But we have three or four different produce suppliers that supply our stores. Most of our guys will go right to the produce market, and it’s the same thing on the meat side. Right now, most of the supply issues are on the dry grocery side, because the demand has been pent up so much and, in my opinion, the manufacturers will take care of the Walmarts and the Krogers and the Costcos first before the small, middle-size regional distributors.”

“It’s all about supply. It’s not about us pushing product out. We can push it out as good as anybody. We have a whole infrastructure in place. We don’t have a problem picking it. I just have to get product in the building.”

More election developments and impact.  Losses in the House are a setback for Democrat progressives who have sought to cut the defense budget. Defense budget cuts put pressure on all elements of DoD including appropriations that are used to support commissaries, exchanges and MWR programs. Control of the Senate looks like it might come down to two races in Georgia and these two races may not be decided until January 5.  In Georgia, if you don’t get above 50 percent of the vote, you have to go into a run-off election, and that election under Federal rules can’t take place until after nine-weeks to allow for overseas ballots to be returned.  There are two senate races up for grabs in Georgia.  None of the candidates in the Georgia Senate races appear to have more than 50 percent. 

The uncertain outcome of the Senate puts into question two bills that are near and dear to the resale system—the FY 2021 NDAA and another pandemic Stimulus Bill.  The NDAA includes many provisions that affect resale including GAO reviews of DeCA operations and the data used by DoD to justify consolidation of resale programs.  The pandemic stimulus bill includes may include added funding to backfill losses for exchanges and MWR programs. 

If the Senate stays Republican, The Senate Armed Services Committee would maintain its status quo with Senator Jim Inhofe (R.-Okla.) as Chairman and Senator Jack Reed (D-R.I.) as ranking member both of which won reelection as well.  

Other SASC members who won re-election this cycle included Sens. Joni Ernst in Iowa, Tom Cotton in Arkansas, Mike Rounds in South Dakota, and Inhofe.   One that is still too close to call is Sen. Thom Tillis’s (R-N.C.).  Tillis is Chairman of the SASC’s Personnel Subcommittee which has jurisdiction over commissary and exchange matters.   

Sen. Dan Sullivan (R-Alaska) won in his reelection.  Another advocate of military resale, family and quality of life issues, Senator Mark Warner (D-Va.) was re-elected.   Sen. Doug Jones (R-Ala.) lost his seat to Tommy Tuberville.   Democratic Sen. Jeanne Shaheen (D-N.H) kept her seat along with Gary Peters (D-Mich.).  Cotton chairs the airland subcommittee; Rounds chairs the cybersecurity subcommittee; Tillis chairs the personnel subcommittee; Sullivan chairs the readiness and management support subcommittee; Perdue chairs the seapower subcommittee; and Ernst chairs the emerging threats and capabilities subcommittee, with Peters as ranking member.

Also, if the Senate does not flip to the Democrats, there will be little or no change on Senate Appropriations with Richard Shelby (R-Ala.) remaining chairman of the full committee and the Defense Subcommittee and Richard Durbin (D-Ill.) as ranking member on both panels.  

Todd Harrison, at the Center for Strategic and International Studies and a frequent speaker at ALA events, said another Republican Senate will likely push back on any sharp cuts to defense spending and force Democrats to negotiate for smaller gains in non-defense areas like health care and education.

Defense bill negotiations have been on-going at the staff level for months and the underbrush has been cleared with the remaining issues to be decided by the “Big 4”, Inhofe, Reed, Smith and Thornberry.  Thornberry retires in January and there is going to be a competition among HASC Republicans about who will take the ranking slot.  Jackie Speier (D-Calif.) is currently chairman of the HASC Personnel Subcommittee and Trent Kelly is ranking member.  They both won re-election.  

On House Appropriations, Defense Subcommittee Peter Visclosky (D-Ind.) is retiring and his chairmanship is up in the air.  Kay Granger (D-Texas) and Sanford Bishop (D-Ga.) also won re-election.  

Don Bacon (R-Neb.) who has frequently advocated for resale matters, won re-election as have Rob Wittman (R.-Va.) who was awarded the ALA’s Distinguished Service Award this year for his support of the military resale program and quality of life issues.   Other Virginia Representatives that were re-elected included Ben Cline, Morgan Griffith and Democratic Reps. Don Beyer, Elaine Luria, Jennifer Wexton, Gerry Connolly, Bobby Scott and Don McEachin.  Rep. Elissa Slotkin (D-Mich.) was also re-elected.   Ben Cline, Morgan Griffith and Democratic Reps. Don Beyer, Elaine Luria (who has been advocating to keep commissaries open during Government shutdowns), Jennifer Wexton (who included a provision in the Defense bill that requires extensive reporting by companies doing business with exchanges and commissaries on whether they are doing any business using materials made by forced labor in China), Gerry Connolly, Bobby Scott and Don McEachin.

More illumination on Flannery at DeCA.  We reported last month that Jim Flannery had taken a job at DeCA to be its Chief Transformation Officer.  Now, a DeCA press release is providing some more illumination.  Flannery is looking at multiple DeCA processes and is involved in “listening sessions” with major manufacturers and also has been in discussions with several other sectors up and down the supply chain.  The release says:

As DeCA’s CTO, Flannery advises DeCA leadership on innovative techniques to improve how DeCA delivers the commissary benefit to eligible patrons, including new business strategies to help DeCA take advantage of industry and consumer shopping pattern trends.

Flannery will also assist DeCA’s senior leadership on agency efforts to support the Defense Community Services’ Reforms, led by the Office of the Secretary of Defense Chief Management Office (OSD CMO), such as better partnering with the service-managed exchanges.   

“I am personally very excited about the opportunity to enhance the way the commissaries deliver value to the men and women who serve our country around the world,” Flannery said. “And it is a bit of a way for me to give back. There has been an ongoing tradition of military service in my family. In a small and humble way, I hope I can contribute.”

Prior to DeCA, Flannery was the CEO of SummitVentures LLC, a consumer products consultancy he started in 2019 that focused on helping brands grow their business by building consumer and trading partner trust.

Before SummitVentures, he was senior executive vice president at the Grocery Manufacturers Association from 2013 to 2019. There, he was responsible for GMA’s overall “Member Value Creation” efforts and had primary responsibility for developing and implementing collaborative relationships, initiatives and programs with retailers and their trade associations across all retail channels. 

At GMA, Flannery led the consumer products industry’s effort to improve the product recall process, standardize product code dating nomenclature to reduce food waste and developed and launched the SmartLabel® transparency initiative, which enables consumers to get access to information about hundreds of attributes on thousands of food, beverage, personal care, household product and pet care products.

During his 36-year career at P&G, Flannery served in various sales and management positions culminating with being managing director of customer development for P&G Global Operations. Prior to that position, he was director, Global Customer Marketing, from 1998 to 2003 and had responsibility for P&G’s industry-wide commercial collaboration efforts and the internal capabilities required to deliver them.  While at P&G, Flannery held volunteer leadership positions at GMA, the Food Marketing Institute, ECR-Australasia and ECR-Asia, and played an instrumental role in the creation of the Consumer Goods Forum. In 2010, he was the first manufacturing executive to be awarded the FMI “Friends of the Industry” Founders Award at this retailer’s Associations Annual Executive Conference.

AAFES’ Chief Chat to honor heroes.  The Army & Air Force Exchange Service and military resale are paying tribute to our Nation’s heroes. “Chief Chat,” the Exchange’s twice-a-week Facebook broadcast, is hosting Medal of Honor recipients, a Coast Guard Silver Lifesaving medal recipient during November. The “In Recognition Of” series is part of the first-ever joint military resale Veterans Day event to salute all who served and offer a chance to hear firsthand from our Nation’s heroes. “Chief Chat” is hosted by Air Force Chief Master Sgt. Kevin “KO” Osby, the Army & Air Force Exchange Service’s senior enlisted advisor. 

Report find deficiencies in DoD’s reform efforts.  I get asked a lot about the efforts to consolidate the Department of Defense’s resale programs.  This consolidation is wrapped up in the overall Defense reform agenda—quite a complicated area.  For those of you tracking these things, here is a development that will affect this reform.   The Government Accountability Office just issued a report that will have implications on the effort to consolidate resale programs of the Department of Defense.  This consolidation is part of an overall review of Defense management that is being undertaken by the Department’s Chief Management Officer and the Reform Management Group (a panel of representatives from the branches of the Armed Services and other Defense entities).    Congress has been questioning the data used to justify the consolidation or “Community Reform” effort at DoD.  The report was performed by Elizabeth Field’s group over at GAO.  ALA has met with her and her team on Defense resale reform matters and is scheduling a meeting to meet with them on their latest project that is expected to be assigned to GAO upon completion of the negotiations over the fiscal year 2021 National Defense Authorization Act that is expected to be completed this month barring some political intervention due to the election.  Also, DeCA is affected by cuts to Defense agencies that are associated with the reform effort and reportedly are getting hit with a 6 percent cut emanating from the reform effort.  

The November 2020 GAO report says: “The Department of Defense (DOD) has made progress in establishing valid and reliable cost baselines for its enterprise business operations and has additional efforts ongoing. DOD officials told GAO they have developed and are continuing to refine baselines for all of the department’s enterprise business operations, such as financial and human resource management, to enable DOD to better track the resources devoted to these operations and the progress of reform. While still in progress, this effort shows promise in addressing the weaknesses in DOD’s section 921 report and in meeting the need for consistent baselines for DOD’s reform efforts that GAO has previously identified.”

GAO found that DOD’s reported savings of $37 billion from its reform efforts and a Defense-Wide Review to better align resources are largely reflected in its budget materials; however, the savings were not always well documented or consistent with the department’s definitions of reform. Specifically:

  • DOD had limited information on the analysis underlying its savings estimates, including (1) economic assumptions, (2) alternative options, and (3) any costs of taking the actions to realize savings, such as opportunity costs. Therefore, GAO was unable to determine the quality of the analysis that led to DOD’s savings decisions.
  • Further, some of the cost savings initiatives were not clearly aligned with DOD’s definitions of reform, and thus DOD may have overstated savings that came from its reform efforts rather than other sources of savings, like cost avoidance. For example, one initiative was based on the delay of military construction projects. According to DOD officials, this was done to fund higher priorities. But if a delayed project is still planned, the costs will likely be realized in a future year. 

Prior to February 2018, the Deputy Chief Management Officer led DOD’s department- wide reform efforts. The CMO assumed these responsibilities effective February 1, 2018, in accordance with section 910 of the NDAA for Fiscal Year 2018, which disestablished the position of the Deputy Chief Management Officer and established the CMO position as a presidentially appointed, Senate-confirmed position.

The 20 DOD defense agencies and eight DOD field activities (including DeCA) are separate from the military departments. These defense organizations are intended to provide a common supply or service across more than one DOD organization, including support for the department’s business operations, and they include the Defense Finance and Accounting Service, Defense Human Resource Activity, Defense Information Systems Agency, and Defense Logistics Agency.

The RMG is the governance forum for the department’s business reform efforts and is responsible for implementing the National Defense Strategy’s third line of effort to reform the business functions of the department. The RMG is a deliberative body with the authority to make decisions affecting the department’s business functions. The RMG is chaired by the CMO and includes participation by, among others, the Under Secretary of Defense (Comptroller), Director of Cost Assessment and Program Evaluation, and Under Secretaries of the military departments.

CMO position is uncertain. “Despite general adherence to many of the leading practices, there is a risk that this collaboration on reform efforts may not be sustained in light of any organizational changes that Congress or DOD may make. The status of the CMO position currently faces significant uncertainty. Section 904 of the NDAA for Fiscal Year 2020 required DOD to conduct two assessments of the CMO position, including one by an independent entity such as the Defense Business Board. The conference report accompanying the bill also stated that it was the conferees’ intention to disestablish the CMO position pending the assessments required by section 904.  In response, the Defense Business Board assessed that the CMO has been mostly ineffective in executing its mission to transform business operations in DOD, and in exercising its statutory responsibilities and authorities, in part because the position was not set up for success. Specifically, the Defense Business Board determined that there were (1) misalignment between the functions assigned by the congressional statutes and the functions actually assigned to the CMO organization; (2) difficulties in exercising authorities over military services and defense agencies and DOD field activities; (3) chronic vacancies in the CMO and/or DCMO position since 2008; and (4) assignment of additional duties that have nothing to do with business transformation. The Board also presented alternatives for disestablishing and for replacing the CMO position. Both the Senate’s and the House of Representatives’ bills for the NDAA for Fiscal Year 2021, as passed by each chamber, would terminate the CMO position and reassign statutory responsibilities and duties to other DOD officials.

“Our prior reports have identified cases in which leadership changed—or was briefly absent—and, accordingly, an interagency collaborative mechanism either disappeared or became less useful.  Our prior work has also found that organizational changes can occur over several years, and must be carefully and closely managed.  The risk that collaborative mechanisms would become less useful for DOD’s reform efforts is increased by the fact that OCMO, Office of the Under Secretary of Defense (Comptroller), and CAPE have not formalized and institutionalized these efforts. Specifically, there are no written policies or formal agreements that define how organizations should collaborate with regard to DOD’s reform and efficiency efforts. As a result, there is also a risk that leadership for reform efforts will not be sustained in light of any organizational changes that may occur,” the report said.

GAO overturns household goods contract award.  For the first time, USTRANSCOM is seeking a contractor to perform household goods relocation services now performed by the government.  This contractor would provide all personnel, supervision, training, licenses, permits and equipment necessary to perform household goods relocation transportation and storage-in-transit (SIT) warehouse services worldwide.   GAO sustained the challenges to the agency’s responsibility determination citing the conduct of discussions, the conduct and the documentation of oral presentations, the evaluation of technical capability proposals, and the best-value tradeoff analysis.  GAO recommended that the agency conduct and properly document a new round of oral presentations and include in that record documentation of the discussions conducted with each offeror. 

Retailers rely on November and December for at least 20% of annual revenue include electronics, clothing, department and jewelry stores, according to data from the U.S. Census Bureau. In particular, for jewelry stores, the two months alone accounted for 27.5% of 2019 revenue.  In discretionary categories like these, retailers have already experienced steep revenue losses this year. Local businesses selling jewelry, luggage and leather goods lost 46% of revenue since March compared with a year earlier, while clothing stores lost 35%, according to data from Womply, a local commerce platform. While these small businesses aren’t represented in the stock market, the people they employ and the space they rent lend vital support to local economies.  Already, local businesses selling discretionary goods have ceded share to large competitors with better e-commerce operations.  The compounding effect of a Covid-19 second wave and no government intervention seems likely to push many already vulnerable stores over the edge.

Commercial curbside update.  Supermarkets are using pandemic-driven changes in shopping behavior to accelerate the shift to e-commerce they have been seeking but have been slow to realize in recent years.  Grocers are now devoting more of their floor space to fulfill digital orders in response to customers’ increased food consumption at home and their growing reliance on online shopping.

Albertsons is testing the use of dozens of 9-by-12-foot temperature-controlled lockers in select stores in Chicago and California for customers to collect what they buy online. It is also introducing contactless payment in all of its more than 2,200 stores.  Kroger has more than 2,100 pickup locations. 

 

While many such technology investments were under way in the industry before the health crisis, food retailers are now making bigger and faster bets in hopes of appealing to consumers who want to avoid shopping in person or at least reduce the number of visits. Online grocery sales in August were up about 74% from a year earlier, according to data provider Nielsen.The jump in digital sales is also creating new challenges, however.  Industry executives say online purchases are less profitable than those made in-store because of the extra costs associated with fulfilling orders for customers. Grocers have to pay their own staff to pick and package items on shoppers’ behalf.Delivering groceries to consumers is more expensive than having people pick them up because of the labor and transportation required, said Bill Bishop, co-founder of the consulting firm Brick Meets Click. Compared to pickup, delivery typically adds $8 per order to retailers’ costs, he said. Lowering costs “is viewed as the only way to move the online business to profitability,” he said.

Retail essential worker information.    Since the onset of the pandemic, ALA has been tracking the Critical Infrastructure guidance coming out of government and providing information to suppliers on how this guidance affects their operations and ability to move products.   

 

The retail industry is a major employer in the United States, accounting for nearly 1 in 10 of all domestic workers. While salespersons, cashiers, stock clerks and first-line supervisors in brick-and-mortar stores are primary examples of retail workers, those involved in the facilitation and execution of e-commerce, such as delivery drivers and warehouse packers, are a growing segment of the sector’s work.  Research shows that four occupations comprise the bulk of the industry, constituting roughly 79% of all retail worker employment: retail salespersons (about 25%), drivers and sales workers (24%), cashiers (20%), and stock clerks and order fillers (11%). The retail workforce consists primarily of full-time employees (roughly two-thirds of the labor force) who work for companies with more than 1,000 employees. Walmart is the country’s largest private-sector employer, employing 10% of all retail workers.

 

Demographically, 40% of retail workers are women, although the gender distribution varies widely by occupation within the sector. Cashiers, who earn an average of $8.25 per hour, are predominantly women, whereas delivery drivers, who earn an average of $16.20, are predominantly men. The median retail worker age is 40, with 28% of workers reporting educational attainment beyond a high school diploma. The racial makeup of the retail sector mirrors that of the overall workforce: 62% non-Hispanic white, 17% Hispanic, 13% African American and 5% Asian.

The retail industry is composed of a complex network of occupations working in concert to meet the everyday needs of people across the country. From keeping grocery store shelves stocked to delivering consumer goods, many occupations within retail are deemed essential due to the role they play in maintaining everything from food to personal security. For this reason, all states with available guidance have deemed occupations within the retail sector essential. Workers in the following settings have most commonly been deemed essential across the states: grocery stores, pharmacies, medical supply stores, convenience stores, pet stores, hardware stores, office supply stores and liquor stores. Since the majority of retail occupations cannot be done remotely, many essential retail employees have continued carrying out their work in person. This has sparked debate around worker protections as retail workers, who are often low-wage earners with limited benefits, such as grocery store clerks, face risks to exposure daily.

All states with available guidance have deemed occupations within the retail sector essential. However, essential retail occupations vary based on state.  Colorado and at least six other states deemed medical and/or recreational cannabis dispensaries essential. All but five states—-New York, Massachusetts, Washington, New Mexico and Vermont—deemed firearms stores nonessential.

At least 20 states have adopted federal guidance from the U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency on essential workers. The guidance outlines the following retail workers, among others, as essential:

§  Workers supporting groceries, pharmacies, convenience stores and other retail (including unattended and vending) that sell human food, animal and pet food and pet supply, and beverage products. They include retail customer support service and information technology support staff necessary for online orders, pickup and delivery.

§  Restaurant carry-out and quick-serve food operations, including dark kitchen and food prep centers, carry-out and delivery food workers.

§  Workers and firms supporting the distribution of food, feed, beverage and ingredients used in these products, including warehouse workers, vendor-managed inventory controllers and blockchain managers.

 Want to know how retailers are handling the pandemic?  Here’s a source: National Conference of State Legislatures https://www.ncsl.org/research/labor-and-employment/covid-19-essential-workers-in-the-states.aspx

CMMC rolling forward.  ALA has been participating in policy discussions with Department of Defense representatives on a wide range of topics affecting industry.  One is the CMMC or Cybersecurity Maturity Model Certification program.  The Defense official in charge of rolling out the department’s Cybersecurity Maturity Model Certification program that will required all government contractors to certify controls over their cyber processes. 

Katie Arrington, the person taking the lead in DoD on this program said at a conference attended by ALA that sit might be necessary to revise the standard to address high costs associated with validating procurements at the very top of its tiered model. 

“There’s a lot of discussion I think yet to be had on level four and five,” Katie Arrington, the DOD’s CMMC lead, said. “Is it all the controls in level four? Or is it a you know, à la carte that you need to be able to meet 50% of the controls in level four, to get certification? Because it’s very expensive. And is there the [return on investment] on implementing all those controls?  Do we need to modify the CMMC?”

The CMMC program aims to replace a system of accepting contractor testimonials on its cybersecurity controls.  . Public comments are due at the end of November on an interim CMMC rule that will take effect on Dec. 1. 

Best regards,

Stephen Rossetti

President

 

Pentagon News/Military News:

     

    Read the 2020 Marine birthday message from Commandant Berger
(Marine Corps Times) Though he never said the word, the COVID-19 pandemic loomed largely in the 2020 birthday address from Marine Corps Commandant Gen. David Berger to the Corps.
   

  Michèle Flournoy could become the first woman to run the Pentagon. Here’s what would change.
(Defense News) On June 20, 2016, then-Vice President Joe Biden delivered keynote remarks at an event hosted by the Center for a New American Security, the think tank founded and, at that point, led by Michèle Flournoy.
   

    Renewing our commitment to veterans with disabilities
(Military Times) As our nation turns to Veterans Day to appreciate the heroes who serve our country, this year we owe a special debt of gratitude to the many skilled veterans who are blind or have other disabilities who are manufacturing personal protective equipment (PPE) and other essential supplies and services necessary in the fight against COVID-19. 
 

    With Esper gone, Democrats concerned over what Trump will do with the military
(Politico) President Donald Trump’s abrupt firing of Defense Secretary Mark Esper on Monday is sparking deep concern among Democrats in Congress.
   

    Mark Esper issues his last memo to the force
(Military Times) As former Defense Secretary Mark Esper packed up his Pentagon office Monday, he released a final memo to the department. urging troops and DoD civilians to “always do the right thing.”
   

  4. 37 Senate Dems urge mandate to rename bases honoring Confederate generals stay in defense bill
(Defense News) Heading into negotiations on the annual defense policy bill next week, leaders of the House and Senate Armed Services committees are under new pressure to buck President Donald Trump’s veto threat and keep a proposed requirement that the Pentagon rename bases honoring Confederate military leaders.
   

  Senate Republicans unveil $1.4T spending bill, with $696B for defense
(Defense News) Senate Republicans on Tuesday introduced a governmentwide, $1.4 trillion spending package, with $696 billion for defense, teeing up negotiations in Congress’ tense lame-duck session ― and several fights with House Democrats.
 

  Senate appropriators propose federal pay freeze for 2021
(Federal Times) Federal employees would not receive an across-the-board increase in pay next year under provisions outlined in a series of fiscal year 2021 funding bills released by the Senate Appropriations Committee Nov. 10.
   

    Biden landing team for Pentagon announced
(Defense News) President-elect Joseph Biden has announced his landing team for the Department of Defense, and it contains a number of well-known names.
   

    Biden’s transition team for veterans issues includes community advocates and former VA leaders
(Military Times) President-elect Joe Biden’s transition team for the Department of Veterans Affairs includes several agency alumni who will spend the next few months setting policy priorities for the incoming administration.

 

INDUSTRY NEWS

 How retailers should embrace the new normal
The pandemic has reshaped consumer behaviors and the customer experience, most likely permanently. As we look to 2021, retailers need to focus on planning for the future with strategies that meet both the immediate and long-term needs of their customers and maximize the potential of all their sales channels. Watch SmartBrief and retail industry experts explore how the retail landscape has changed this year and how retailers can succeed in 2021.

Target, Best Buy, Walmart list Black Friday plans

A pandemic-era Black Friday will be a first for US retailers including Target, Best Buy and Walmart, which have unveiled plans to safely make the most of the symbolic start to holiday shopping. Target will host a monthlong “Black Friday Now” event with weekly deals; Best Buy will boast sales all month and launch Black Friday deals on Nov. 22; and Walmart will kick off “Black Friday Deals for Days” online this evening.

RESALE NEWS:

MCX Experiential Retailing in the World of COVID -19

As with all retailers, the health and well-being of Marine Corps Exchange (MCX) customers has been top-of-mind during this pandemic. It has meant a complete shift in the planning and execution of 4th Quarter event strategies focusing on a transition from in-person to low-exposure or virtual events that can still deliver memorable experiences while keeping customers engaged. We’ve had incredible early success with this effort. Our previously planned Halloween weekend  which was to include in-store trick-or-treating at all MCX locations morphed into a virtual Season of Spooky Halloween Costume Contest netting well over 300 submissions onto MCX social media. Although the MCX had executed several focused campaigns to expand our digital advertising reach earlier in the year this particular holiday season kickoff had an additional WIN-WIN effect of expanding our digital engagement.

To further solidify the role that digital can play in customer involvement, all of the MCX Enter To Win contests have been completely transitioned to this capability.  As we are still primarily a brick and mortar retailer the MCX still wants to reap the benefit of enticing the in-store shopping customer, however now through mobile/digital optimization customers can enter any of our incredible contests at an extremely low exposure health risk through scan-to-enter technology.

Our remaining digital-friendly events for the remainder of the year include:

– USMC Dress Sword Giveaway 11/4 – 11/11

– 7 Big Days of Winning 11/11 – 11/17

– Cyber Monday eGift Card Give-To-Get Campaign 11/29

– Jingle All The Way Gift Card Giveaway 12/2 – 12/8

– Elfing Amazing Elfie Selfie Social Media Contest 12/9 – 12/15

For more information visit facebook.com/MarineCorpsExchange or myMCX.com

American Forces Travel

is the only official US Joint Services’ MWR travel platform offering vacations, hotels, flights, rental cars event tickets through its online booking engine powered by Priceline.  Eligibility to patronize American Forces Travel has been extended from Active Duty, retirees and dependents, to all Department of Defense civilians, including appropriated  and non-appropriated funds employees, just in time for holiday and 2021 travel planning. This offering, developed by a cross-Service team, allocates a portion of all bookings that go back to the Services to support military quality of life programs.  For more information, visit https://eur02.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.americanforcestravel.com%2F&data=04%7C01%7C%7C849122fc9645431e284a08d884caaee4%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C637405353336738882%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=%2Fd7p4mhD5wWQdhHoopsPmYYyGucBArzUwAlH7eN5Csg%3D&reserved=0 to begin your journey. Also follow us at https://eur02.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.facebook.com%2FAFTMWR&data=04%7C01%7C%7C849122fc9645431e284a08d884caaee4%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C637405353336738882%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=bBE8RBAe1yhj1lcZeDnXvHyCNvjN5j3culRElYtB2do%3D&reserved=0 and the AFT official Twitter page @aft_explore.

 

Yoga pants are now allowed at the commissary, and there was much rejoicing

Air Force base commissary. Previous bans on athletic clothes had been selectively enforced, particularly for dependents. (Defense Commissar

ShopVCS Veterans Week Sale is happening now!

shopping goes smoothly this year. Stacy Papachrisanthou is the marketing and communications director for the Veterans Canteen Service (VCS)…

Fort Rucker strives to keep community informed through official outlets

that causes turbulence for people.”Recently, the Army and Air Force Exchange Service and Installation Management Command rolled out a new

 Mark your Calendar

Date                                               Event                                              More Information

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

MARK YOUR CALENDAR

 

Date Event More Information

Pending Coordination NEX-MCX Virtual Update TBD

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

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