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Home   About   Membership   Forums & Meetings   Government Affairs   Members Only February 06, 2015


 




PRESIDENT'S MESSAGE

We now have the DoD Budget Proposal for 2016 and the Compensation Commission Report ... What to make of each:

The American Logistics Association has a long-standing interest in preserving commissary and exchange benefits for our military and their families, and we applaud the Commission's belief in these benefits and their thoughtful plan to realize efficiencies before budget cuts.

The president's own commission report stands in stark contrast to the president's own 2016 budget proposal. The budget proposal would destroy these valuable benefits. The Commission seeks to sustain these benefits and calls for management efficiencies to be implemented instead of diminishing the savings that patrons now realize.

The Commission stands behind commissary and exchange benefits. It sets in motion a process to achieve savings and efficiencies. This process needs to carefully assess impact to both exchange and commissary viability along with impact on the benefits to patrons that these programs provide. The review needs to take into account the wide body of studies and reviews of exchange consolidation that have been conducted over the past 20 years, and the cautions against banking savings ahead of reality that these studies underscored.

Meanwhile, the DoD 2016 budget proposes to cut $1 billion from the Commissary appropriation beginning with a reduction of nearly $300 million in fiscal year 2016. This budget proposal seeks to put the cart way before the horse and cut funding ahead of any efficiencies. The Commission notes that, even if its recommendations on efficiencies are implemented, it will be 40 years before this level of savings can be realized without harming patron savings levels.

The budget proposal will wreck these cherished benefits far before savings can be realized to preserve the savings of exchanges and commissaries that according to the Commission are used by 90 percent of the military population.

The Commission cited surveys that showed 90 percent use these benefits, and a host of other surveys show that commissary and exchange benefits consistently rank at the top of the compensation items that are provided to the military. Yet, they cost less than one percent of the total compensation cost of the military and less than .3 percent of the DoD budget.

Commissary benefit advocates were encouraged when the president told Marines and families at Camp Pendleton that closing commissaries ... "is not how a great Nation should be treating its military and military families." It also was encouraging when the White House publicly thanked the resale system and its supporting industry for being the first to step forward to hire 25,000 veterans and family members ... the first major contribution to first lady Michelle Obama's Joining Forces initiative, an initiative personally launched by president and Mrs. Obama at Langley Air Force Base.



The president's budget is a shell game stacked with illusory "savings" that would transfer costs to the exchanges and put the burden of financing their own benefits squarely on the backs of the troops. And, these cuts target those who need these programs the most — military families with children and retired folks on fixed incomes.

The troops already have a co-pay that finances their own commissary and exchange benefits through surcharges and mark-ups on their purchases. Last year, nearly three-quarters of a billion dollars of their own programs were financed by the troops. DoD proposes to up this amount by another $1 billion.

We applaud the Commission's recognition of the value of these benefits and their belief that the benefits are too valuable to be squandered at the budget table without a plan to offset budget reductions through cost savings. ALA supports keeping protections in law for commissary and exchange benefits in place until the Department of Defense renders an objective report that documents how DoD plans to achieve reductions to the commissary appropriation without diminishing the savings that are realized by commissaries and the impact on exchange operations and patrons. These reports were wisely requested in last year's Defense authorization and appropriations acts.

Also, DoD has put in place a process to deliberate over the Commission findings. They are assembling experts in exchange and commissary management to assess the Commission recommendations on consolidation of programs and services, and other potential savings opportunities that were identified by the Commission. We hope this is a fair and objective process free of any predetermined budgetary constraints. We hope this is a fair review that does not put illusory efficiency plans ahead of the systems actual ability to realize savings and efficiencies or merely pass commissary costs onto the backs of the military exchanges.

We hope the Pentagon and White House review of the Commission findings along with the Pentagon’s review of the Commission report will take into account the full body of data and reports that have considered consolidation over the years. The facts are that commissaries and exchanges have already taken out costs over the years in excess of $1 billion a year. They stand as a model for the rest of Government to emulate, not decimate for short term-budget expediency. Consider facts, not conjecture aimed at hitting a budgetary target regardless of the risk to a system that has given and continues to give so much to so many for so little.

Commissaries and exchanges are a system that works. Congress and past Administrations have carefully designed and crafted resale programs that provide the right balance of taxpayer and patron support. Yes, they receive a level of appropriations, but the benefits that military families, DoD and the Nation derives from these programs are way out of proportion to their cost. This list is long, from financing on-base community programs, providing subsistence to families trying to make ends meet, providing healthy programs that serve to reduce health care costs to tens of thousands of jobs for military families, to maintenance of a stateside support base for overseas operations, a secure source of products for military families in times of danger and threat, and massive impact to exchange operations from commissary cutbacks and closures that will result in major reductions to exchange earnings that are used to sustain vital military community programs.

Congress and the White House review must take great care not to allow radical and irreversible changes to these benefits that they will regret without looking at the facts, assessing a broad range of unintended consequences that will reverberate across the force, the families and the base support programs that sustain the military community.

Read the report: Military Compensation and Retirement Modernization Commission.


President's budget:
– Reduce Commissary Operating costs and subsidy through efficiencies and revenue generating opportunities gained through legislative changes.
(FY2016, $0.3B; FYDP, $4.4B)



Patrick B. Nixon
President, American Logistics Association




WASHINGTON UPDATE


Off-base stores won't commit to military discounts
Military Times
Despite previous indications from major discount stores that they would commit to providing discounts to service members as an alternative to the commissary benefit, none really appear willing to take that step, compensation experts have told Congress.
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Lawmakers skeptical of call to abolish Tricare
The Hill
Democrats on the House Armed Services Committee grilled members of a military commission that recommended abolishing Tricare, the healthcare system for service members.
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Budget 2016: Defense faces stiff political headwinds
National Defense
The White House is unveiling a funding plan for the Pentagon that kicks off another round of fiscal battles that have become a hallmark of President Barack Obama's administration.
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Troops give early OK to proposed health care changes
Military Times
Active-duty members surveyed by the Military Compensation and Retirement Modernization Commission overwhelmingly support the panel's proposal to change the military health care insurance system for their families.
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Commission: Improve child care access
Army Times
In what will come as no surprise to military families, the Military Compensation and Retirement Modernization Commission offers wide praise for the quality of military child care, but says there simply isn't enough of 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


Pentagon's budget proposal increases costs to families
Military.com
A series of changes proposed by the White House in the president's annual budget plan looks to drastically change Tricare, increase health care fees, decrease commissary hours while increasing the cost of food and lower the amount of money given to troops for housing costs. Under the proposal, commissaries would also be open fewer days and, as a result, cut staff. In addition, the plan calls for doing away with the current tax-payer subsidy that covers "second destination" shipping of goods to rural locations, and instead adding those costs to the price of products.
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DOD budget looks for savings in quality-of-life benefits
The Association of Defense Communities
The president's fiscal 2016 budget request released recently reprises cost-savings reforms to commissary benefits and the basic allowance for housing from the previous year's request, with some tweaks. The request calls for military grocery stores to cut back their operating days and hours to save $300 million in federal subsidies next year, and requires service members to pay an additional 4 percent in out-of-pocket costs for BAH over the next two to three years.
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2016 defense budget released: military families face financial pressures
National Military Family Association
The first thing to note about the proposed budget request for 2016, released Feb. 2, is its size. The Administration requested more than $534 billion for the base defense budget, the largest such request ever. However, under the spending caps set by sequestration, the Department of Defense budget should be $499 billion. That leaves it up to Congress either to undo sequestration or find the cuts themselves. And even at this higher level, the budget proposal includes more financial strain on military families when it comes to compensation and benefits.
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Military Compensation and Retirement Modernization Commissions releases report
The Association of the United States Navy
Recently, the Military Compensation and Retirement Modernization Commission released its long awaited report. The report makes 15 key reform recommendations ranging from a consolidation of the Reserve Component's 30-duty statuses into six broader statuses, a consolidation of the military's commissary and exchange systems, and a replacement of the current 20-plus year retirement system with a system that would auto-enroll service members in the Thrift Savings Plan, among many other recommendations. AUSN will continue to work with members of Congress and their staffs to ensure that our service members, veterans and military families are provided with the benefits that they have earned through their years of honorable service to our nation.
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COMMISSARY ANNOUNCEMENTS

Commissary Web Posts

The following commissary items were posted to the ALA Website between 10 AM, January 29, 2015 and 10 AM, February 5, 2015:

PROMOTIONS:
- DP #7, Far East Promotion & Shipper Quantities.
- DP #8, WW Promotion Package, Cinco De Mayo.
- DP #9, WW Promotion Package, Mother's Day Celebration & National Military Appreciation Month.
- Case Lot Sale (May 2015), Promotion Package.
- Mother's Day (Seasonal Items), Update #1.

NOTICES TO TRADE (NTT)
None Received.

MISCELLANEOUS:
- Adds/Changes/Deletes for Week 15-05.
- Guard/Reserve On-Site Sale Schedule as of February 3, 2015.
- CRV Values, February 1, 2015.




FEDERAL BUSINESS OPPORTUNITIES


Sustain BX-Commissary Parking Lot
FedBizOpps.gov
Notice to offerors: Solicitation FA5682-15-R-0001 is hereby posted. This work will be performed entirely in Italy and therefore in accordance with DFARS 225.1103(3) provision 252.225-7042 as listed in provision 252.204-7007 alternative A shall apply.
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Shelf Stocking, Receiving/Storage/Holding Area and Custodial Operations at the Fort Myer Commissary for the Defense Commissary Agency
FedBizOpps.gov
Furnish all supervision, personnel, equipment and supplies necessary to perform shelf stocking, receiving/storage/holding area and custodial operations for the Defense Commissary Agency, Fort Myer Commissary, located at Fort Myer, Virginia, in accordance with the Government's Performance Work Statement (PWS).
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Looking for more federal business opportunities? Search here.


COMMISSARY NEWS


Sources say FDA commissioner will step down
Reuters
FDA Commissioner Dr. Margaret Hamburg, who for almost six years has overseen public health initiatives ranging from tobacco control and food safety to personalized medicine, disease control and drug approvals, is stepping down, according to a person briefed on the matter. The White House is expected to announce her resignation Friday.
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Budget would cut operating hours for military commissaries
Tidewater Review
For the second year in a row, the Pentagon is proposing to cut funding for commissaries, a popular shopping option for the military community.
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Off-base stores won't commit to military discounts
Army Times
Despite previous indications from major discount stores that they would commit to providing discounts to service members as an alternative to the commissary benefit, none really appear willing to take that step, compensation experts have told Congress.
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Video: Poultry embargo
DVIDS
Chicken and turkey meat imported from the U.S., along with all of the products that contain it, will not be on Commissary shelves in Korea anytime soon. Bird Flu outbreaks in the states prompted South Korea to ban all U.S. poultry meat to protect its own poultry industries from becoming infected.
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RDBA: Retail dietitians' job satisfaction should keep pace with demand
Supermarket News
As demand for retail dietitians grows, supermarkets interested in retaining them should focus on maximizing job and compensation satisfaction, according to the findings of the Retail Dietitians Business Alliance's salary survey for retail dietitians.
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The future of shopper marketing
Food Business News
As the president and CEO of the market research company Information Resources Inc., Andrew Appel is surrounded by data. In a recent conversation, Appel looked ahead to the future of shopper marketing — and his data shows it's going to be all about speed.
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Meeting growing consumer demand through a well-managed cold chain
Refrigerated & Frozen Foods
Consumers increasingly perceive value in refrigerated foods vs. more non-perishable, shelf-stable items. Therefore, refrigerated offerings have become a must-have vs. a nice-to-have for many QSRs. However, this increased demand for fresh foods is impacting the cold chain and its temperature-controlled segment.
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Miss an issue of Executive Briefing? Click here to visit Executive Briefing archive page.


Is a zero-waste supermarket possible? This store hopes so
Care2
A supermarket in Berlin called Original Unverpackt ("Original Unpackaged") is unlike typical grocery stores as it offers no disposable packaged-products. Rather than packaged goods, it dispenses its 350-some food products out of containers from which shoppers fill their own reusable containers.
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Uber-like grocery delivery flourishing in Portland, Oregon
KOIN-TV
Green Zebra Grocery in Portland, Oregon, is charged up and growing with a new partner, the two-year-old San Francisco-based home grocery delivery service called Instacart. The new national grocery delivery chain is allowing the little north Portland grocery to spread its healthy food service across Portland and into its environs, says Peter Kohler, Green Zebra's business development director. Using Instacart, Green Zebra added 100 new customers to its customer base in its first partnership month.
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Do grocery store meats meet weight requirements?
WRAL-TV
When buying meat, shoppers often pay attention to the cut, date and price, but not typically the weight.
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Find the most healthy breakfast foods at the grocery store
Cleveland Clinic
When you're grocery shopping, breakfast options may seem endless. How do you make the healthiest choice? Watch this video to see how to break down breakfast one aisle at a time.
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EXCHANGE NEWS


2015 Exchange Impact Workshop: 'Elevating the Experience'
ALA
March 17- 18
Hilton Arlington Hotel
Arlington, Texas


If you do business with the Exchange, you do not want to be left out of this inaugural meeting. For the first time, more than 45 associates of the Exchange will be presenting their categories and collaborating in townhouse forum workshops to improve go to market strategies. From store repositioning discussions to individual category workshops, you do not want to be left out.

The Early Bird Registration rate is set to expire Feb. 2. Don't miss this opportunity!

For further information about the workshop, click here. To register and view the preliminary agenda, go to www.ala-national.org. Space is limited, so register today! The choice to be involved is yours.

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AAFES Executive Promotions and Assignments
ALA
On behalf of the Director/CEO, please join me in congratulating these deserving associates.

Executive Promotions

Rita Inchaurregui-Powell
PB 5A Store Manager (MS), Fort Meade Exchange, Eastern Region, to the position of PB 5C General Manager, Fort Lee Exchange, Eastern Region in March 2015.
Dale Killip
PB 4F Store Manager (MS), JBLE EUS Exchange, Eastern Region to the position of PB 5A Store Manager (MS), Fort Bragg, Eastern Region in March 2015.
Thomas Kuttamperoor
PB 5B, Store Manager (MS), MacDill AFB Exchange, Eastern Region to the position of PB 5C, General Manager Fort Stewart Exchange, Eastern Region in February 2015.
Christopher Langston
PB 4F Call Center Systems Analyst, Finance & Accounting Directorate, Exchange HQ to the position of PB 5A Senior Business Analyst (S), Systems Support, Finance and Accounting Directorate, Exchange HQ in January 2015.
Alexander Mamaril
PB 4E Store Manager (MS), West Point, Eastern Region to the position of PB 5A Store Manager (MS), Fort Meade Exchange, Eastern Region in February 2015.


Thomas Marsden
PB 4F Business Analyst III (S), Merchandising Directorate, Exchange HQ to the position of PB 5A, IT Division Resource Specialist, Information Technology Directorate, Exchange HQ in January 2015.
Lajima Marshall
PB 4E Store Manager (MS) Robins AFB, Eastern Region to the position of PB 5A Store Manager (MS) MacDill AFB, Eastern Region, Exchange HQ in February 2015.
Neal Smart
PB 5A Store Manager (MS), Knox, Central Region to the position of PB 5B Store Manager (MS), JBSA-LCK, Central Region in March 2015.
Anthony Ventura
PB 5C General Manager, Fort Riley, Central Region to the position of PB 5D Strategic Communication Executive in March 2015.
Teresita Williams
PB4F General Manager (Dual), Dyess AFB, Western Region to the position of PB5A General Manager, Dyess AFB, Western Region in January 2015.
Stephanie Wilson
PB4F General Manager (Dual), Carlisle Barracks Exchange, Eastern Region to the position of PB5A General Manager, Robins AFB, Eastern Region in February 2015.


Executive Assignments

Darryl Porter
VP Talent Management and Development, HR Directorate, HQ to the position of VP Services and Commercial Listing, Services and Food Directorate, HQ in March 2015.
Kelly Rhody
Senior Treasury Analyst, Finance & Accounting Directorate, Exchange HQ to the position of Senior Benefits Specialist, Finance & Accounting Directorate, Exchange HQ in December 2014.

David Swenson
Store Manager (MS), Fort Hood Exchange, Central Region to the position of General Manager, Fort Leonard Wood Exchange, Central Region in January 2015.


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INDUSTRY NEWS


CEOs to retail students: accept new challenges
National Retail Federation
Finding success in the retail industry takes a combination of hard work, talent, people savvy and luck — but a little good advice from those who have made it to the top can't hurt either.
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Wal-Mart, Sears top study of most popular store sites on Facebook
Drug Store News
A pair of veteran retailers were among the most popular store sites on Facebook during the 2014 holiday season. Sears was the most popular U.S. department store, while Wal-Mart.com was the most popular mass merchant store site, according to a study by Searchmetrics.
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The post-recession consumer
National Retail Federation
In the wake of the 2009 recession, consumer attitudes toward spending money have shifted, along with what motivates them to shop for items and what they'll delay purchasing when budgets are tight.
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Why there's no Costco inside Dallas city limits, yet
The Dallas Morning News
Costco's store expansion rule book may keep it from opening inside the city limits of Dallas for quite some time.
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The future of retail is the end of wholesale
Business of Fashion
Retail is facing a monumental problem that no one seems to want to talk about. It's that the entire economic model of revenue and profitability for retailers and the suppliers they do business with is collapsing under its own weight and soon will no longer function.
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J.C. Penney resurrects a print catalog
Forbes
J.C. Penney management now sees the need to have a print catalog once again. After a five-year hiatus, the company sees the need for a catalog that reinforces its home and home furnishing assortments. In March, the company will mail a 120 page book.
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SkyMall, known for kitschy in-flight catalogs, files for bankruptcy protection
Los Angeles Times
SkyMall, the company behind the ubiquitous in-flight catalogs known for kitschy items, recently filed for Chapter 11 bankruptcy protection following struggles to reach passengers who are now immersed in their smartphones and tablets.
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Making the case for going from clicks to bricks
National Retail Federation
There is no doubt that digital retail has a pervasive influence on consumer shopping behavior and expectations. After a number of years of succeeding online, more digital disruptors are taking their e-commerce brands to the physical space, driven by technology and demand and fortified by the branding and marketing opportunity that a bricks-and-mortar presence creates.
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Hallmark and J.C. Penney could expand 'card shop in a store' concept
The Kansas City Star
A "shop within a store" concept, tested beginning last year by Hallmark Cards and J.C. Penney, is likely to expand this year.
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Miss an issue of Executive Briefing? Click here to visit Executive Briefing archive page.


Employers: Agreement made on key issue in port labor dispute
The Associated Press via Seattle Post-Intelligencer
Negotiators working on a new contract for dockworkers at West Coast seaports, which handle about $1 trillion worth of cargo annually, have resolved a key dispute in their difficult talks, an association representing employers said recently.
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Cupid to shower Americans with jewelry, candy this Valentine's Day
National Retail Federation
Cupid has some tricks up his (nonexistent) sleeve this year, with plans to shower Americans with jewelry, candy and a special night out. According to the National Retail Federation's Valentine's Day Consumer Spending Survey conducted by Prosper Insights and Analytics, the average person celebrating Valentine's Day will spend $142.31 on candy, flowers, apparel and more, up from $133.91 last year. Total spending is expected to reach $18.9 billion, a survey high.
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Can Wal-Mart clerks ship as fast as Amazon robots?
The Wall Street Journal (tiered subscription model)
Retailers bet on "omnichannel" strategy to fill online orders from store shelves.
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C-STORE NEWS


Study: 4 in 10 retailers will use Apple Pay, analytics in 2015
Chain Store Age
About 4 in 10 retailers plans on using both Apple Pay (43 percent) and predictive analytics (42 percent) by the end of 2015. According to a new study from IHL Group, "Retail 2018 – Retail Transformed," things are looking up for both store growth and IT spend.
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Retailers embracing VTMs, but still hesitant on 'bridge' products
CSP
With vaporizers, tanks and mods emerging as the dominant e-vapor trend of 2014, it's perhaps not surprising that much of Wells Fargo's fourth-quarter "Tobacco Talks" survey focused on the growing segment. Of the retailers and wholesaler contacts surveyed, 96.3 percent currently carry VTMs (up from 85.3 percent in Q2 2014), with e-liquids and VTMs taking up the most incremental shelf space (up a respective 12.4 and 12 percent year over year).
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US convenience stores: Growth trajectory still upward
CSP
The convenience store industry continued to show its resilience in 2014, growing steadily in number of retail outlets during an economy still trying to find its feet. The U.S. convenience store count increased to 152,794 stores as of Dec. 31, 2014, a nearly 1 percent increase from the year prior's count of 151,282 stores as of Dec. 31, 2013, according to the 2015 NACS/Nielsen Convenience Industry Store Count.
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Who will scoop up Esso?
CSP
Initiating a nonbinding bid process that will begin in the coming weeks, Imperial Oil Ltd. said that it is evaluating the potential transition of its remaining company-owned Esso retail gas stations to a branded wholesaler operating model.
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Miss an issue of Executive Briefing? Click here to visit Executive Briefing archive page.


The Hershey Co. enters meat-snack market
CSP
Amid a meat-snack category that continues to flourish, The Hershey Co. announced it has entered into an agreement to purchase Krave Pure Foods, maker of Krave premium jerky products. Krave made its convenience-store industry debut at last year's NACS Show.
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Respect Foods frozen breakfast sandwiches
CSP
Respect Foods is unveiling a new line of frozen breakfast sandwiches made with 100 percent whole grain and containing no artificial colors, flavors or preservatives.
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Tree Top Apple Sauce Cup
CSP
Containing one serving of fruit and made from 100 percent U.S.-grown apples, Tree Top Apple Sauce Cup is available in a 4.5 ounce package. It contains no sugar, high fructose corn syrup or artificial coloring and is shelf-stable for 16 months with no refrigeration required.
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TRENDING ARTICLES
Missed last week's issue? See which articles your colleagues read most.

    Hagel exiting on his own terms (POLITICO)
25 issues to watch in the coming DoD budget (Defense News)
The Pentagon's new fiscal cliff (POLITICO)
Fort Leonard Wood, Missouri: Jan. 31 deadline for required passes to access post (Waynesville Daily Guide)
Joint chiefs warn against sequestration, again (Defense One)

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


MWR NEWS


Hawaii: Fitness Challenge showcases something for everyone
Ho'okele
Since its beginning four years ago, the Morale, Welfare and Recreation Fitness Challenge has given an opportunity to Joint Base Pearl Harbor-Hickam families to sample a variety of the base's many fitness classes at JBPHH and Hickam Fitness Centers. This year's event, held Jan. 24 at JBPHH Fitness Center, continued the tradition, and base families responded with enthusiasm.
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Georgia: Unauthorized care puts children, housing at risk
The Bayonet
The Family Child Care Program is responsible for ensuring all child care in government privatized homes meets requirements outlined in Army Regulation 608-10 and within Child, Youth and School Services operating procedures.
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