Military Update

Commissary director says critics overlook the efficiencies

All commissaries around the world – about 250 – will likely be closed an additional day each week and DOD school employees will see furloughs as part of the Pentagon’s effort to impose the automatic spending cuts known as sequestration, Defense Department spokesman George Little said Monday.


By TOM PHILPOTT | | Published: October 6, 2011

Military grocery stores operate so efficiently that the discounts provided to shoppers are worth double the value of tax dollars being spent to deliver this prized benefit worldwide to U.S. servicemembers and families.

Joseph H. Jeu, director of the Defense Commissary Agency (DeCA), made that point and more in an interview last week amid rising speculation that commissaries could be targeted for cuts under national debt reduction plans being readied by Congress and the Obama administration.

In return for the “$1.3 billion that we get in appropriations support” annually, Jeu said, “we are providing nearly $2.7 billion in savings to patrons.” That more than “two-for-one return on investment” is “something people don’t think about. It’s really an excellent investment for taxpayers.”

As national debt climbs toward $15 trillion, and politicians confront a crisis decades in the making, talk in Washington is of cutting federal entitlements, like Medicare and Social Security, and slashing future defense budgets. Commissaries have become part of that conversation, thanks to a long-standing suggestion by the Congressional Budget Office.

CBO says that up to $1.7 billion a year could be saved by ending commissary subsidies, combining base grocery and department stores into a single system and cutting shopper discounts to five percent. The diluted discounts could be eased in part with a new grocery allowance, CBO advises.

Last December the Simpson-Bowles commission on budget reform listed base store consolidation as one of many possible cuts to federal spending. In August, the Senate Veterans Affairs Committee liked the CBO idea enough to include it in a bill to create another entitlement. The committee voted to take dollars saved by ending the commissary subsidy and redirect them to the Department of Veterans Affairs to provide health care to veterans and their families who lived on Camp Lejeune, N.C., during an era time when base drinking water was contaminated.

The bill still faces procedural challenges before it can be debated and put to a vote by the full Senate. Commissary advocates fear the committee’s vote alone has made commissaries a reasonable target of savings to achieve higher priorities, like new debt reduction goals.

Defense officials meanwhile are studying ways to achieve $400 billion in budget savings over 10 years as ordered by President Obama earlier this year. And under a separate deal reached between Obama and Republican congressional leaders this summer, this one as a condition for raising the debt ceiling, a new “super committee” of lawmakers must find at least $1.5 trillion more in debt-cutting initiatives over the decade or automatic cuts of $1.2 trillion, by design, will hit both defense budgets and entitlements hard.

“I don’t want to speculate on what could happen but I have heard the same rumors as you have,” said DeCA Director Jeu.

Commissary patrons are concerned, he said. Jeu’s senior enlisted advisor, Army Command Sgt. Maj. John M. Gaines Jr., travels often and “gets feedback from a lot of junior members who say ‘Sergeant Major, commissaries are critical to us. We cannot make ends meet without them.’ ”

Rather than comment on any particular threat to stores or savings, real or perceived, Jeu chooses to explain the value commissaries create for both shoppers and taxpayers, “even in a fiscally constrained environment.”

First, he said, DeCA has a tradition of efficiency that other agencies would do well to emulate. When adjusted for inflation, the $1.3 billion annual appropriation is 40 percent below what DeCA got in 1992, when it was formed through consolidation of service-run grocery stores. That’s savings of about $700 million a year to deliver the benefit, Jeu said.

Commissaries shoppers meanwhile save, on average, 31.7 percent over commercial store patrons. The savings likely are less, he conceded, if price comparisons are made only for Wal-Mart or other major discounters.

Even then, Jeu said, “I’m confident our prices [are] much better…It could be 15 percent. It could be 20 percent. Who knows? But it will be much greater savings [overall] than in comparison to Wal-Mart.”

But commissaries deliver more than savings. They bring a sense of community, Jeu said. That was seen anew following some recent natural disasters including the earthquake and tsunami in Japan last March. Shelves in grocery stores outside Misawa Air Base soon were bare of goods. But commissary shelves were full, Jeu said, with “plenty of bottled water, batteries and all those things. The [deputy wing] commander there sent me an email. He said the commissary had been a ‘bedrock’ of the community. That’s how members view their commissary.”

Likewise this summer, first in response a threatened government shutdown and later, for east coast commissaries, as Hurricane Irene approached their towns, shoppers who feared base stores would be closed for a time rang up record sales ahead of events.

“Military members and retirees truly value the benefit,” said Jeu. Manufacturers and vendors enrich it even more each year with “ancillary support” such as charitable contributions, scholarships, and special events and promotions. DeCA estimated those were worth $244 million in 2010.

Before becoming DeCA director last January, Jeu spent about the first third of his 32 years in government working with Army and Marine Corps commissaries. He remembers base stores 30 years ago being more like warehouses. They carried about half the number of products being stocked today. None had their own bakery or deli or fresh seafood section.

“Thirty years ago our savings were probably running about 25 percent,” Jeu said. He credits the larger savings today to a more professional staff. DeCA employees are better trained, armed with better data and have skills to manage categories of items far more efficiently.

“It really is more than a grocery store,” Jeu said. Commissaries “are an integral part of the military’s compensation system. That’s something people are forgetting.”

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