Military Update: Career grocer taking the reins of commissary agency
Stars and Stripes August 17, 2006
After 140 years, the tradition of a career military officer being in charge of commissary stores, and how groceries are stocked and sold on base, is over.
Patrick B. Nixon, a career grocer and a senior civilian executive of the Defense Commissary Agency (DeCA) since its formation 15 years ago, became its first full-fledged civilian director in June. Stand by for fresher produce, more self-checkout counters and stores designed to serve both convenience shoppers and patrons needing to restock their fridge and pantry.
In an hourlong interview, Nixon discussed changes and challenges ahead for commissaries. He also spoke, without bravado, about how a civilian director can bring a career’s worth of supermarket experience to the job, and then stay long enough to see his vision become reality.
Fresher produce for commissary patrons has long been a goal for Nixon. He began to do something about it when he became acting director in 2004 and will see it achieved system-wide as DeCA’s director.
For decades, commissaries procured meats, dairy products, fruits and vegetables using the same bureaucracy that supplies mess halls. That began to change, Nixon said, when “we realized that the military logistics system that does troop feeding is not agile enough, nor does it operate with the type of distribution model needed in the retail supermarket industry.”
In the 1990s, DeCA began contracting for its own meats. But procurement of fruits and vegetables for commissary bins remained the responsibility of the Defense Logistics Agency (DLA), which relied on something called “terminal” or secondary markets. That is about to change.
DeCA has been testing a commercial model to supply produce to 22 commissaries in the Tidewater area of Virginia. Results show fruits and vegetables are fresher, and that DeCA can lower its own costs by eliminating DLA involvement. Commissaries in the Midwest will be next in line to see fresher produce, followed by northeast and southeast stores.
“I feel confident that while [all contracts] won’t be up and running in the continental United States by Oct. 1st, they will have all been awarded. Within 45 days after that, they will begin to see a marked improvement in produce in our commissaries,” Nixon said.
Commercial-style procurement of produce will take a little longer overseas, but those local contracts too are being worked, he said.
“This was one issue where the longevity of a civilian paid off because this was something I’d been working on for years,” Nixon said. For different military commanders, however, it wasn’t a top priority.
Nixon said his goal always is to increase value to commissary patrons while reducing costs to taxpayers. Commissaries cost taxpayers $1.1 billion a year to operate, with 68 percent of that going to salaries.
Given all the saber-rattling over the years about “privatizing” commissaries, some shoppers might be nervous to see a civilian in charge of 284 stores and 18,000 employees. Nixon said there might have been concern that he came directly from industry. But he hopes his appointment sends a reassuring signal of the Defense Department’s commitment to preserving a prized benefit.
Technically, Nixon isn’t DeCA’s first civilian director. In the early 1990s, retired Maj. Gen. Richard E. Beale served his last four years in the Army as DeCA director and immediately became its civilian director. Beale led the agency for almost three more years.
No past director, however, has had Nixon’s experience. He has spent all of his working life in the grocery business except for three years as a Marine with 21 months’ service in Vietnam. For the past 23 years, Nixon has been managing commissary stores or commissary regions.
“I hope you sense my enthusiasm about the commissary system,” Nixon said. “It’s my life. It’s what I love to do, and making it better for the most important patron in the world is what we are here for.”
Shoppers, on average, still save 32 percent over goods sold in retail supermarkets for annual savings of $2,700 for a family of four. The estimate includes some lowering due to Wal-Mart’s aggressive pricing on groceries.
“This year we reduced our savings by 2.42 percent to take into account the impact of Wal-Mart,” Nixon said.
A straight commissary-to-Wal-Mart price comparison isn’t available, he said, but it would vary store-to-store even if Wal-Mart weren’t so reluctant to share price data for a broad product-to-product comparison.
There is no talk today of privatizing commissaries, Nixon said. The notion of allowing “variable pricing,” which would accommodate a for-profit approach to store operations, has been scrapped, Nixon said.
Not many retailers, he added, covet taking over a chain of stores in which its 17 largest account for “20 percent of the business on the top end and 150 stores do 20 percent of the business on the bottom end.”
Commissaries’ products still are sold at cost plus a five-percent surcharge. Surcharge dollars are used to modernize current stores and to build new ones. A big challenge ahead, said Nixon, will be finding enough dollars to expand stores at stateside bases due to receive thousands of additional troops and families from bases being closed in Europe.
DeCA’s “store of the future,” the largest commissary ever built, will open in San Diego next year. At one end will be a convenience store, with short-term parking. At the other, patrons will enter a modern store themed toward wellness and nutrition.
“We want to be the nutritional leader in the supermarket industry,” Nixon said. “I can’t think of a shopping group that should be more nutritionally focused.”
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