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Home   About   Membership   Forums & Meetings   Government Affairs   Members Only January 23, 2015


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Hagel: Military compensation changes coming
Read the Full Story
Military Times, Andrew Tilghman
Big changes are probably coming soon to military pay and benefits, Defense Secretary Chuck Hagel told troops recently.


I would venture a guess at this point that the Secretary of Defense has had a peek at the report and is out on a preparatory mission to set the stage for what is to come. The timeline we envision goes something like this:
  • The Commission Report will probably be briefed to Congressional leaders by the end of this week (23 January).
  • The Report will probably be released on the following Friday (30 January).
  • The DoD 2016 Budget proposal will probably be released within the first several weeks of February.
  • From Feb. 2 to 6, several Pentagon "working groups," as well as a team from the RAND Corp, think tank, immediately will begin to analyze the proposals. Separate "working groups" will study topics that include "pay and retirement," health benefits and "quality of life benefits."
  • The working groups will mostly include officers at the 0-6 level from each service and civilians at a similar pay grade. Specifically, the analysis will focus on the potential impact on recruiting and retention and will aim to develop the DoD response for presidential consideration.
  • From Feb. 9 to 13, the working groups will convene at an "off-site location" for further analysis.
  • From Feb. 17 to 19, members of the working groups will brief their services' senior leaders on the status of the Pentagon's official response.
  • By Feb. 26, senior leaders, including the undersecretary for personnel and readiness, will receive a draft of the formal response.
  • By March 6, the Joint Chiefs will vet DoD's official position on the commission recommendations.
  • At the same time, Pentagon civilian leaders will reviewing it in a process led by Deputy Defense Secretary Robert Work.
  • By March 13, the defense secretary will approve or reject a final version of the Pentagon's response. It's unclear at this point if that will be outgoing Defense Secretary Chuck Hagel or his successor, Ash Carter, who is likely to be confirmed by the Senate in early 2015.
  • From there the official response will go to the White House, where it will face further review.
  • The DoD plan aims to have President Barack Obama provide formal recommendations to Congress by April 1.
Once we have the report and have digested its recommendations and implications for military resale, we will provide you an EB update and a Breaking News segment on ALA 365. The next segment will give you some insight into the thoughts of the new Chairman of the Military Personnel Subcommittee Congressman Joe Heck. He sees a clear distinction between direct compensation (pay) and in-kind compensation (military resale). The tea leaves say major changes are on the horizon!





Pay and benefits 'outlook' from the new chairman of the Military Personnel Subcommittee of the HASC:

Doctor-lawmaker Heck ready to triage compensation reforms
By Tom Philpott, special to Stars and Stripes | January 08, 2015

As an Army Reserve physician triaging the care of arriving wounded at the combat support hospital on Al Asad Airbase, Iraq, for half of 2008, Joe Heck said he saw "exactly how well joint operations can work."

Where the 2nd Marine Expeditionary Force was based, Heck ran the hospital's emergency support section with two other fulltime Army doctors, as Air Force and Navy physicians rotated in for shorter stints. Nurses and medics took on responsibilities, Heck said, that wouldn't have been allowed in a civilian setting but were so necessary in war.

Back home "in any intercity level-one trauma center, it's very easy to pick up the phone, call for reinforcements from other parts of the hospital when you have five or six patients at a time. That wasn't the case at Al Asad," Heck said. And yet it was "a blended purple force able to take care of anybody who came through the door."

Now a third-term Republican congressman from Nevada, Heck vows to take the same "practical, nonparochial" approach in tackling two far different yet still critical priorities for the military while serving as the new chairman of the House armed services' personnel subcommittee.

One will be to review, perhaps reshape, and then shepherd into law long-awaited recommendations of the Military Compensation and Retirement Reform Commission, which is to deliver its report by Feb. 1. Heck is hopeful reforms can be enacted this year, though most will be aimed at "the 100-meter target"; of "the next generation"” military.

"I don't think there's going to be any quick 25 meter fixes to try to address current budgetary constraints," Heck cautioned.

Commission proposals on modernizing retirement, for example, will be for future service members although likely to have an "opt-in" period for those now serving if they are drawn to new features, such as, perhaps, early vesting in an old age pension after five or 10 years of service.

Heck can't be sure he will support replacing the rigid 20-year retirement system for the future force until he sees details and projected impacts on retention. But after 13 years of warfare and seeing the toll multiple combat tours have had on individuals, he sees merit in awarding some retirement benefits sooner than warriors can earn them now.

"The fact is we're breaking these folks a lot faster than we used to," Heck said. "We can't think somebody is going to be able to stay in for 20 years now. To me, it's almost unimaginable because of the op tempo, the stresses we have put them under. So the idea that somebody who serves five or 10 or 15 years is able to get a pension, I think, is critically important."

The report can't come soon enough for Heck because of his second priority as chairman — to protect current forces and retirees from more "nickel and diming" of pay and benefits caused by the 2011 Budget Control Act and its sequestration ax. The law's automatic spending cuts of $50 billion a year across Department of Defense accounts are to resume in full again Oct. 1.

Without relief from the law, warns Army Gen. Martin Dempsey, chairman of the Joint Chiefs of Staff, force readiness will drop lower than he has seen at any point in his 40-year career. So Dempsey and service chiefs have been urging Congress at least to slow compensation growth so more of those dollars can be shifted toward training and other readiness accounts.

But Heck, who was promoted to brigadier general in the Army Reserve in 2013, said despite tighter budgets "it is unconscionable to, after the fact, say 'I'm sorry but we need to balance the budget on your back. So we’re not going to meet the promise we made to you for the sacrifices you and your family have made over your term of service.'"


Heck sees other ways to make the Department of Defense more efficient, including merging Army, Navy and Air Force medical commands into one, and doing likewise with the three military exchange services that separately run their own chains of on-base department stores.

Heck wants to see these kinds of tough actions taken before considering more proposals to cap annual pay raises, dampen housing allowances or boost patient out-of-pocket costs under TRICARE, the health insurance program for military families and retirees.

"I'm not one for asking somebody to make a co-pay when we're still pissing away money in a health care system that is not finely tuned," Heck said.

Individual services and commands will fight "to protect their turfs" in managing base stores or overseeing health care, Heck said. But if the alternative is breaking faith on compensation, then the tough choices must be made, and he will try to lead colleagues to make them.

Also broken and wasting billions of dollars, he said, is the defense procurement system, which can't seem to buy weapons without hefty cost overruns and long delays.

The armed services committees especially, he said, must move past the "parochial, with everybody concerned about the base or the depot or the unit in their district" and "think more strategically" to what the nation needs.

As budgets tighten, Heck draws a distinction between "direct" compensation — pay, allowances, retirement and health care — and "indirect" benefits to include shopping discounts. Last year, during a hearing on administration plans to cut commissary funding by two thirds over three years, Heck didn't reject more modest cost-saving ideas to include a doubling of the five percent surcharge customers pay at checkout.

Asked about that, Heck said grocery savings are a quality of life issue.

"But if push comes to shove and you've got to make a decision somewhere — as much as I would not want to — that's the place where we're going to need to look. The indirect benefits, not direct pay and benefits."

Better still would be to end sequestration. Heck doesn't sound confident it will happen but it should, he said.

"Any budgetary cut mechanism that takes 50 percent of cuts away from DoD, which is only about 25 percent of the [entire federal] budget, is fraught with problems," Heck said.

More of them are his problems now.



Patrick B. Nixon
President, American Logistics Association




WASHINGTON UPDATE


Carter, not Hagel, to brief the defense budget on Capitol Hill
Foreign Policy
One of Ashton Carter's first jobs as defense secretary? Head to Capitol Hill to present and defend the Pentagon's 2016 budget, a planning document he's had little opportunity to shape.
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Republican lawmakers again propose slashing 115,000 civilian defense jobs
Government Executive
A group of Republican lawmakers has once again proposed slashing the civilian workforce at the Defense Department by 15 percent, a move they estimate will save $82.5 billion over five years.
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Congress, Pentagon will have to agree to disagree on budget issues
National Defense
Just two weeks before the Obama administration submits its budget proposal to Congress for fiscal year 2016, at least on the defense side, the battle lines have been drawn. The Pentagon can forget scrapping the A-10 attack aircraft, taking warships out of service or closing any more military bases in the United States. The military, too, will have to keep funding the remanufacturing of main battle tanks and continue to buy other hardware it says it doesn’t need.
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Thornberry: HASC can block Pentagon plans
Defense News
In his first major speech as House Armed Services Committee Chairman, Rep. Mac Thornberry struck a defiant tone and made clear the panel will block any White House and Pentagon plans it deems unwise.
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HASC chair: Expect Pentagon oversight
Military Times
Rep. Mac Thornberry has a message for everyone who accused lawmakers last year of ignoring Pentagon recommendations, meddling too much with the military budget and causing too many headaches for the administration: Get used to it.
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Miss an issue of Executive Briefing? Click here to visit Executive Briefing archive page.


MARK YOUR CALENDAR

Specific information on upcoming ALA events is posted regularly on the ALA website. To learn more about each event, please click the following links:

Date Event
March 17-18, 2015 2015 ALA Exchange Impact Workshop
April 30 - May 1, 2015 2015 Commissary Roundtable
Oct. 26-28, 2015 68th Annual Convention


COALITION UPDATE


State of the Union offers few new military, vet proposals
Military Times
President Barack Obama praised the end of the combat mission in Afghanistan and vowed to continue "to hunt down terrorists" but offered no new military or veterans proposals in his annual State of the Union speech Tuesday. Several lawmakers criticized the President for failing to discuss the military budget and oncoming spending cuts.
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Hagel initiatives enable veteran, military support organizations
U.S. Department of Defense
Defense Secretary Chuck Hagel signed two policy memorandums directing Defense Department leaders to implement standardized procedures to allow veteran and military service organizations, and military-support nonprofits better access to provide needed support to troops and military families. In a recent letter sent to national VSOs and MSOs, Hagel outlined his directives, which are designed to remove "unnecessary barriers and inconsistencies" in dealing with these organizations.
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Top 10 wins for military families in 2014
National Military Family Association
From budget battles to the looming MCRMC report, was 2014 all doom and gloom for military families? Not necessarily. While the budget pressures are REAL and will continue into 2015 and beyond, here are the top 10 wins for military families in 2014.
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Town hall to address cuts at Joint Base Lewis-McChord
The News Tribune
The Army hosted a town hall meeting on Wednesday to discuss the proposed cuts at Joint Base Lewis-McChord. Military officials heard from local residents about the impact personnel cutbacks at the base would have on the community. Joint Base Lewis-McChord is facing the loss of up to 11,000 troops and civilians.
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Soldiers and families push back against Army drawdown at town halls
Military.com
Governors and community leaders nationwide have been lining up to voice their opposition to the Army's planned drawdown due to budget cuts. "At this point, the Army has not made final decisions on the specifics for re-alignments resulting from force reductions below 490,000," the Army statement said. The sequester cuts for the military were eased in 2015 budgets, but are slated to resume in 2016 unless Congress acts.
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Special Report: State of Defense 2015
Defense One
Defense One's annual comprehensive report, "State of Defense" explores how the Army, Navy, Air Force and Marines are planning on moving beyond sequestration and uncertainty and into the era of constant combat in surprise conflicts. "Nobody wants more certainty about their futures more than the men and women in uniform," states the report. "Congress and the president may finally move them beyond the sequestration era, easing fears in pocketbooks and at PXs."
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Terrorism threat prompts increased security at military installations in Europe
Stars and Stripes
U.S. military installations across Europe are increasing security in the wake of the recent terrorist attack in Paris and disrupted plots in Belgium, Germany and France, U.S. European Command said recently.
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COMMISSARY ANNOUNCEMENTS

Commissary Web Posts

The following commissary items were posted to the ALA Website between 10 AM, January 15, 2015 and 10 AM, January 22, 2015:

PROMOTIONS:
- DP #3, Update #2.
- DP #4, Update #1.
- DP #5, Update #1.
- Sun Care, Update #1.

NOTICES TO TRADE (NTT)
- NTT 15-03, Front-End Rack Program, Update #3, January 20, 2015.
- NTT 15-18, Top-To-Top Meetings.

MISCELLANEOUS:
- Adds/Changes/Deletes for Week 15-03.
- Guard/Reserve On-Site Sale Schedule as of January 20, 2015.
- CRV Values, January 18, 2015.




FEDERAL BUSINESS OPPORTUNITIES


Material Handling Equipment Preventive Maintenance and Repair Services
FedBizOpps.gov
This solicitation is being issued as 100 percent set-aside for small businesses. The solicitation is for the performance of preventive maintenance (PM) and repair services on Government owned Material Handling Equipment (MHE) as required for the following Defense Commissary Agency commissaries: Fort Rucker, Gunter AFB, Maxwell AFB and Redstone Arsenal.
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Flat Shelf Utility Cart, Mobile
FedBizOpps.gov
This solicitation is being issued as Unrestricted for flat shelf utility carts, mobile for use by Defense Commissary Agency commissaries worldwide (including Europe). However, for overseas stores, with the exception of Alaska and Hawaii, the Contractor would only be responsible for preparation for overseas shipment to the port. A Firm Fixed Price Contract is contemplated.
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Notice of intent to extend period of performance on N65236-12-D-4112
FedBizOpps.gov
Space and Naval Warfare Systems Center — Atlantic (SSC-LANT), Charleston, South Carolina, intends to exercise FAR 52.217-8, Option to Extend Services, on contract N65236-12-D-4112 with DRS Technologies Inc. This six-month, no-cost extension is for continued support to provide Morale, Welfare, and Recreation (MWR) Internet Caf Satellite Services.
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Looking for more federal business opportunities? Search here.


COMMISSARY NEWS


UK supermarkets prepare for new cooling landscape
By Andrew Gaved
Major supermarkets in the United Kingdom are calling upon the cooling industry to come up with solutions that will help them face a new landscape characterized by tight margins, smaller store footprints and new refrigerant choices imposed by the European F-gas regulations. U.K. supermarket refrigeration engineers are united in their belief that intense competition in the sector and changing customer behavior will have an influence on the way they do business.
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Is this the year digital grocery shopping returns?
HLM
It's been promised to us for years: Online grocery shopping with speedy delivery straight to our kitchens. Remember when the futuristic Jetsons family ordered their meats and veggies with a press of a button? Or the Internet fridge in the movie "The 6th Day" that reminds Arnold Schwarzenegger to order more milk? It's 2015, folks, where's our instagrocery service? Well, it sounds like we may finally be getting there.
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Top 10 supermarket trends coming in 2015
Omaha World-Herald
The millennial generation — people who started reaching adulthood around 2000 — is driving changes in the food industry, with a growing desire to eat fresh, handcrafted, local foods.
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Supermarket wine: It's come a long way, baby
The Wall Street Journal (tiered subscription model)
Contributor Lettie Teague writes: While I buy mainly from small- and medium-size wine merchants in New York and New Jersey, my sister, a resident of suburban Dallas, prefers to shop for wine at her local grocery store. Supermarkets and mass merchandisers (e.g., Wal-Mart) accounted for an estimated 42 percent of all retail wine sales in the U.S. and $8.6 billion in annual sales in 2014, according to Danny Brager, SVP of alcoholic beverages for Nielsen. In other words, my sister is a very typical wine consumer — she usually buys wine at the same time she buys groceries for her family.
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Sales of gluten-free products continue to grow double digits on quality, selection
Food Navigator-USA.com
Improving the quality and selection of gluten-free foods available in mainstream channels will help sales in the category grow nearly 1.5 times through 2019, according to market analysis by Packaged Facts.
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Miss an issue of Executive Briefing? Click here to visit Executive Briefing archive page.


Startup recycles grocery store food waste into organic fertilizer
TreeHugger
In just three hours, California Safe Soil turns fresh food waste into a liquid fertilizer, which promises to boost yields, cut costs and reduce water pollution in agriculture.
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Cracking the code to CPG growth
Food Business News
Private label products generated $120 billion in sales during the past year, a year-over-year increase of 2.1 percent, but the growth may be leveling off, according to a new report from Information Resources Inc.
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FSIS: Almost 18.7 million pounds of products recalled in 2014
FoodQualityNews.com (free registration)
Almost 18.7 million pounds of products were recalled last year, according to the U.S. Department of Agriculture's Food Safety Inspection Service. The total number of recalls stood at 94, up from 75 in 2013.
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America's most promising company: Instacart, the $2 billion grocery delivery app
Forbes
Instacart, the number one company on this year's Forbes America's Most Promising Companies list, has rocketed up the Silicon Valley money list in just two and a half years with its one-hour grocery delivery service. This month, Instacart announced a new $220 million Series C funding round that valued the company at more than $2 billion — just six months after it previously raised $44 million.
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Defense Commissary Agency awards Team nLogic and Harris Network Infrastructure Services contract
The Huntsville Times
nLogic was awarded a small-business set-aside contract by the Defense Information Systems Agency (DISA) to provide the Defense Commissary Agency (DeCA) with network infrastructure services.
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Apple Pay goes live at another grocery chain
PYMNTS.com
Apple Pay has gone live at yet another regional grocery group. The 217 Lucky, Save Mart and FoodMaxx supermarkets in Northern California and Nevada now all officially support Apple's mobile payment system, their corporate parent announced recently.
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EXCHANGE NEWS


MILITARY STAR® Card offers special on major appliances
The NEX and MILITARY STAR® Card are celebrating President's Day in a way that benefits its customers. From Feb. 11–24, customers will enjoy no interest and no payments for one year when using their MILITARY STAR® Card to purchase major appliances priced at $799 or more.

The MILITARY STAR® Card offers many benefits, including 10 percent off the first day's purchases (up to the customer's credit limit), no annual fee, low interest rate, more than 40 special promotions and discounts yearly as well as 24-hour customer service including online access.

MILITARY STAR® Card applications are available at any NEX Customer Service Desk and can be processed quickly.

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New Exchange Extra app puts savings and more at shoppers' fingertips
AAFES
With the swipe of a finger, military shoppers can launch a brand-new way to connect with the Army & Air Force Exchange Service through its free Exchange Extra app. The app gives shoppers quick access to information on the latest Exchange promotions, contests, coupons, BE FIT information and more. The free app is available at the App Store for Apple products or Google Play for Android devices.
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INDUSTRY NEWS


Target not alone in Canadian misfire
USA TODAY
Target has company when it comes to its Canadian troubles. Target's announcement of defeat in Canada may be one of the largest retreats from the country by a U.S. retailer, impacting 133 stores and more than 17,000 employees. But the news follows other major U.S. chains that have had trouble across the northern border and abroad.
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Companies tiptoe back toward 'Made in the USA'
The Wall Street Journal (tiered subscription model)
Thorley Industries LLC began planning several years ago to launch a baby car seat with a set of electronic controls and a potential novelty: The Pittsburgh-based firm considered making the seats in the U.S.
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Analysts: Dollar General may be dropping Family Dollar pursuit
Supermarket News
Dollar General's failure to raise its bid or dispute the considerable store divestiture figures associated with its bid to acquire Family Dollar Stores likely spells the end of its pursuit, analysts said recently.
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Best Buy warns of pressure on sales, profit
The Wall Street Journal (tiered subscription model)
Best Buy Co. warned that weak demand for consumer electronics and declining prices will weigh on sales over the next six months, rekindling investor worries about the chain's long-term profitability and sending its shares tumbling.
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Miss an issue of Executive Briefing? Click here to visit Executive Briefing archive page.


Ports want labor resolution
The Hill
Port and shipping industry leaders called for a swift resolution to a labor fight that is threatening the flow of cargo packages at ports along the West Coast.
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The definition of luxury retail is being 'shattered'
The Washington Post (tiered subscription model)
As recently as 10 years ago, the profile of a luxury shopper was fairly clear-cut: It was the kind of man or woman who owned a lavish penthouse condo, had a fat investment portfolio and freely threw down cash on pricey Chanel handbags or Louis Vuitton luggage.
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Bernanke: Europe, stronger dollar risks for US exporters
Reuters
The weak economic state of Europe has emerged as a major concern while the prospect of a stronger dollar is a risk for U.S. exporters, former Federal Reserve Chairman Ben Bernanke said recently.
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How yesterday's blue-collar brands became today's coolest clothes
Adweek
Just a few years back, the L.C. King Manufacturing Co., founded in 1913 and the oldest family-owned cut-and-sew garment factory in the U.S., was nearly extinct. But today, L.C. King's machines are humming once again, and business is booming — to its core line of bibbed overalls and chore coats, it has added accessories, like skirts and wallets, and upgraded its fabrics to include hickory stripe, white drill and raw selvedge denim.
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Retail holiday sales increase 4 percent
NPR
Confident consumers stocked up on holiday gifts and other merchandise over the 2014 holiday season, helping boost overall holiday retail sales to their highest level since 2011. According to the National Retail Federation, December retail sales, which exclude automobiles, gas stations and restaurants, decreased 0.9 percent seasonally adjusted month-to-month, and increased 4.6 percent unadjusted year over year.
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2015 could shape up to be the year for retail in the Washington, D.C., region
The Washington Post (tiered subscription model)
Of the four major commercial property types — apartment, office, retail and warehouse — retail is expected to experience the lowest vacancy and biggest rent increases in the Washington region in 2015.
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Brand loyalty, trust keys to Canadian consumers
Multichannel Merchant
Canadian consumers are more brand loyal than their U.S. counterparts, but connecting with them involves more relationship-building and trust, according to a Canada Post executive.
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Kantar Retail: Retail sales expected to rise 4.5 percent in 2015
Chain Store Age
The outlook for the retail industry looks bright, with lower prices at the pump and decreasing unemployment boding well for consumer spending. Retail sales are expected to rise 4.5 percent in 2015, which is about one percentage point stronger than 2014 growth, according to a report by Kantar Retail, whose analysis excludes automobile dealers, and gas and food service.
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C-STORE NEWS


5 ways to boost breakfast sales
CSP
With breakfast expected to grow to at least $35 billion by 2018, according to Mintel, convenience retailers can expect competition during the morning day-part to only grow fiercer.
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Consumers high on low gas prices
CSP
After more than 100 consecutive days of gasoline price declines, consumers are truly taking notice. Consumer sentiment increased to levels not seen since January 2004, jumping from 93.6 in December 2014 to 98.2 in January, according to preliminary figures from The University of Michigan consumer sentiment index.
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Want a Bud Light delivered to your home? There's an app for that
FORTUNE
Anheuser-Busch has a special delivery planned: with the touch of a button, Bud Light beer lovers can get an order delivered straight to their home.
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Hawaiian Host to buy nut processor from Hershey
Food Business News (free registration)
Hawaiian Host, a maker of chocolate-covered macadamia nuts, has reached agreement to acquire Mauna Loa from The Hershey Co. Financial terms of the transaction were not disclosed.
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7-Eleven debuts 7-Select GO!Smart private-label banner
CSP
7-Eleven Inc. has introduced two premium, better-for-you snack bars under a new private-label banner, 7-Select GO!Smart.
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States eye gas-tax increases
CSP
As Congress revisits raising the federal gas tax to rescue the drained Highway Trust Fund, some states — even some led by Republican governors and with Republican-dominated legislatures — are weighing increases of their own.
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TRENDING ARTICLES
Missed last week's issue? See which articles your colleagues read most.

    Lobbyist Ryan gears up for military benefit fight (POLITICO (login required))
Overseas commissaries hit with critical food shortages (Stars and Stripes)
What makes Wegmans' love potion so powerful? (Supermarket News)
Brands in danger of fading into background on supermarket shelves (BeverageDaily.com)
Military veterans among Congress' newest class (Stars and Stripes)

Don't be left behind. Click here to see what else you missed.


MWR NEWS


Survey: Base services, health care are military family's top benefits
Military.com
Base amenities and health care are the two most valuable benefits to military spouses according to data from a new survey released recently.
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Survey shows why AUSA supports Army families
noodls
A new military family survey highlights the reasons why the Association of the U.S. Army is committed to helping soldiers and their families. Conducted by the Military Family Advisory Network, the survey shows that some of the programs most used by Army families are the programs that also draw the biggest complaints.
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Looking back: 2014 Year in Review
U.S. Army
As the 10th Mountain Division and Fort Drum, New York, community prepares for another event-filled year, The Mountaineer staff paused to reflect on the people who made headlines during 2104. Following is a brief glimpse back at the events of the year gone by.
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