Euro's strength against dollar makes off-post shopping seem less attractive
November 14, 2004
The recent drop in the dollar’s value against the euro is hitting many people below the belt — in their wallets, and even in their stomachs.
The dollar’s decline is forcing many Americans living in Europe to change their shopping, dining and even travel habits.
“It’s terrible, it’s bleak,” said Sgt. 1st Class Alexie Rogers of the 26th Area Support Group in Heidelberg, Germany, lamenting the dollar’s downward slide. “These days I really have to budget and limit my spending off base.”
The strong euro has discouraged many military members, such as 1st Lt. Dorian Hatcher of the 71st Corps Support Group in Bamberg, Germany, from eating out on the economy.
“I stay on post more now than I used to,” Hatcher said. “If you go out to a local restaurant, you’re going to have to pay more, but you get used to it.
“I went to Burger King the other day, and my order came out to $6.75,” Hatcher said. “I gave them 5 euro and got change.”
Since its historic peak in July 2001, when the euro was worth only 84 U.S. cents, the dollar has decreased in value to an all-time low last week, when a euro cost about $1.30.
The euro itself didn’t become an actual currency until January 2002, but exchange rates for many existing European currencies had been pegged to the rate since January 1999. So the dollar’s exchange rates for lire, deutschmarks, drachmas, francs and pesetas in those three years changed according to the value of the euro.
And since the euro’s physical arrival, the dollar has consistently been dropping in value.
As a result, the Naples Navy Exchanges have seen a small increase in business, according to an e-mail to Stars and Stripes, because “high prices out in town have made shopping [at the exchange] attractive.”
AAFES, on the other hand, doesn’t think that the declince has increased its business much. AAFES Europe spokeswoman Debbie Byerly wrote in an e-mail to Stars and Stripes that though they’ve also seen a slight increase in business, they won’t attribute it to the dollar’s drop.
“Much can be attributed to large troop deployments and redeployments, both [of] which cause large sales spikes,” she wrote. “Recent store expansions and renovations, such as the new mini-mall at Aviano, increase sales through customer satisfaction and improved convenience, as well as expanded stock assortments.”
Customers also differ on whether the dollar affects their exchange shopping habits.
Walking out of the Heidelberg PX last week, Rogers bought his wife a new pair of $49 suede boots.
“This is a prime example,” he said, holding up the bag of shoes. “Usually, I’d be looking off base for something like this, and the PX would be my second or third option. Now, it’s pretty much the only option.”
Sgt. 1st Class Jody Schroeder, with the 1st Personnel Command, got to Europe in August.
“We really haven’t been here long enough to notice the difference,” he said.
When he and his wife wanted to buy some new furniture they looked on base and off, and ultimately bought off base.
“We always eat off base,” said the father of four. But he knows living on base keeps his paycheck more stable.
“I’ve got friends at work who check the exchange rates almost daily to time when they should pay rent or utilities or other bills,” he said.
But those who shop for special items that they can’t get at the exchange will continue to fork over their more-expensive euro for these products.
“It really has had no effect on me,” said Capt. Stephen Leonard, Headquarters and Headquarters Company, 7th Corps Support Group. “There are certain things I get off post, like European foods and auto parts, that I will continue to buy off post.”
Family member Nicole Holland, from Company B, 82nd Engineer Battalion, said the surging euro hasn’t stopped her from shopping off post, but she has noticed the rising rates at the ATM.
“It’s discouraging when you have to spend more money, but it really hasn’t affected how much I shop off post,” she said. “I do a lot of shopping downtown, and get all my produce on the economy. You really notice it when you take money out of the ATM to pay your phone bill. That’s painful.”
The shoe-shopping Rogers is feeling the pinch in other ways, too. Avid travelers since they first moved to Europe four years ago, Rogers and his wife haven’t taken a trip in more than year.
“It’s too expensive,” he said. “I’m just glad we live in base housing. The folks who live off base are the ones really feeling the pinch.”
Military members overseas are given a cost-of-living allowance based on their pay grades, years of service and number of family members.
The allowance, according to the DOD Per Diem, Travel and Transportation Allowance Committee’s Web site, is designed to “equalize purchasing power between members overseas and their [U.S.-based] counterparts.”
About 320,000 military members in 600 overseas locations receive a cost of living allowance. But the money only goes so far.
Last December, a married E-7 without children in Naples, Italy, received $980.12.
This November, the same chief petty officer is expected to receive about $1,125 based on today’s COLA rate. If he had two children, he’d receive about $1,300.
Charles Ragland is one of those who lives off base and doesn’t receive a military cost of living allowance. A retired DODDS principal, Ragland said his rent has gone up by about $300 a month because of the dollar’s nose dive.
“It’s killing me,” he said. To cut costs, Ragland said he doesn’t eat out as much and shops more on base.
And as bad as the exchange rate for euros has become, Ragland said he was blown away at what the dollar bought in England during a recent trip to the UK.
“I couldn’t believe it,” he said. “It was really, really expensive.”
That’s left many looking for deals to cheaper destinations.
When Spc. Saun Norwood with the 596th Maintenance Company based in Wiesbaden, Germany, got back from Iraq this summer, he shopped around until he found a bargain all-inclusive four-day trip to Spain for 340 euros.
“I try to be frugal,” said Norwood, who drove to Heidelberg to shop at the PX and eat at the on-base TGI Fridays. “It’s frustrating that traveling has become so expensive, but you only have so long in Europe. You just have to do it.”
For many servicemembers returning from long deployments to the Middle East, the desire to travel home outweighs the dollar’s decline.
“We had more business than last year,” said Herbert Blesinger, owner of ABC Travel in Germany. “All the time in wartime, I’ve noticed that our business goes up. Soldiers who are coming back to Germany [from downrange] want to go to the States to visit their family there. This has led to an increase in business for the travel industry here.”
Reporters Rick Emert and Jon R. Anderson contributed to this story.