Exchanges Propose Running Commissary System

Exchanges Propose Running Commissary System

The Army and Air Force Exchange Service (AAFES) has proposed placing management of military groceries under its control as a way to streamline operations and slash the $1.4 billion federal subsidy supporting commissaries.

Commercial grocery retailers would operate commissaries at larger installations under contract with AAFES, while the exchanges would directly operate smaller commissaries, including those overseas, reported Military Times. Commissaries would be operated in the same way at Navy and Marine Corps bases, requiring those two services’ exchanges to support the plan as well.

The plan does not call for consolidating exchanges and commissaries, but it does rely on savings by streamlining functions above the store level and reducing the number of personnel. Combining the buying power of the exchanges and commissaries could benefit customers through lower prices. AAFES also anticipates savings in logistics, partially because commissaries and exchanges often are located near each other.

The goal is to provide “a grocery solution that preserves military resale while lowering the [taxpayer] burden,” according to the proposal. The plan would cut the annual taxpayer subsidy for commissaries by half to between $700 million and $800 million, according to the story.

“It’s an interesting idea. But AAFES can’t do this alone, because AAFES doesn’t have a presence everywhere there are commissaries,” said Joyce Raezer, executive director of the National Military Family Association. “How would they do this without the commitment of the other exchanges? And if not, what does this do to the commissary benefit?”

The proposal comes as DOD looks into the feasibility of privatizing some or all of the commissary system, and was submitted in response to the department’s request for information from the private sector.

Finding a way to operate military grocery stores with a smaller taxpayer subsidy — while preserving the discount for military families — is critical for exchanges, which depend on customer traffic from commissaries.

Dan Cohen
Dan Cohen
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