Should Exchanges and Commissaries Merge?

Should Exchanges and Commissaries Merge?

By Debbie Gregory

If John H. Gibson II, the Defense Department’s new chief management officer has his way, the three military exchange services and the Defense Commissary Agency (DeCA) would be merged into a single resale enterprise. But executives of the Army & Air Force Exchange Service, Navy Exchange Command and the Marine Corps exchange systems are resisting the effort

The new venture, which would be called the Defense Resale Enterprise, would rely on the success of the Exchanges to reverse the failures of the commissary system.

While the commissaries, which are federally subsidized, are military grocery stores, for-profit base exchanges sell consumer goods and services to active duty, Reserve, National Guard, military retirees, totally and permanently disabled veterans and Medal of Honor recipients.

DeCA has relied on taxpayer dollars, to the tune of $1.3 billion in annual subsidies, in order to offer a wide array of brand products to military families and retirees at cost.

A draft legislative proposal for creating the new enterprise contends that the merge will “increase the enterprise’s agility to respond to dynamic mission, industry and patron requirements and trends; and ensure the long-term viability of these services.”

The priorities for families who use the commissaries and exchanges are to sustain shopper savings, improve the in-store experience and ensure proper funding of MWR programs, according to Eileen Huck, deputy director of government relations for National Military Family Association.

Many are of the opinion that defense officials should first focus on reversing the decreasing sales at the commissaries before launching a merger with exchanges to try to float the leaking ship.

The draft legislative also suggests that perhaps the exchanges and commissaries should combine into single stores.

Considering that many of the military shoppers are millennials (ages 22-36) who use technology to shop, the move to consolidate the locations may make the most sense.