Commissaries begin measuring regional savings
FORT LEE, Va. (Jan. 30, 2017) – Commissary savings will be reported more often and better reflect the cost of living where patrons shop, said the director and CEO of the Defense Commissary Agency.
"We have updated how we measure patron savings at the commissary," Joseph H. Jeu said. "This enhanced way of calculating savings doesn't change the actual dollars that patrons save, but it will give patrons a better understanding of price comparisons in their local area."
Historically, DeCA measured savings globally, by comparing national prices at commissaries against average market prices for the whole country. However, the cost of living varies by region. To account for these geographic differences, Congress now requires DeCA to report on savings regionally, comparing prices with two-to-three commercial grocers, including supercenters, in the local area of each commissary in the United States.
Through this updated measurement, DeCA is also expanding the range of items on which it measures savings. Besides continuing to compare approximately 38,000 branded items at a national level, DeCA will also be comparing local prices on approximately 1,000 products, which are representative of a shopper's typical market basket.
"What we did before was good for showing a worldwide, annual savings average," Jeu said. "However, now we are diving deeper into our patrons' shopping experience to better reflect regional differences in cost of living and actual shopping patterns."
Since the savings rate is calculated from local price comparisons, it will vary by region due to differences in the cost of living, even when commissary prices remain uniform and constant. For example: Imagine the price of macaroni is $1.25 at all commissaries, but the comparison price at local commercial retailers varies by region. In Hawaii, where the cost of living is higher, the price of macaroni in commercial retailers is $2, but in Georgia, where the cost of living is lower, the price outside the gate is $1.50. This would mean even though customers pay $1.25 for macaroni at commissaries worldwide, customers in Hawaii save 37.5 percent by using their commissary benefit, whereas customers in Georgia save 16.7 percent.
Congress requires that DeCA maintain savings at current levels, even as the commissary system transforms its business operations and improves the shopping experience. The new savings rate provides an accurate baseline that will allow DeCA and Congress to monitor and protect patron savings.
"I am pleased that DeCA can offer significant savings to our patrons on products they frequently purchase," said Jeu, "The enhanced savings calculation will allow us to measure the benefit more specifically and more often, protecting it at current levels for years to come. The value of a patron's market basket should not change because of the new savings calculation. Although market fluctuations will cause prices of grocery products to increase and decrease – as they do today – commissary patron savings levels will remain constant."
For information on savings by region, see the table below:
|Area||Number of Commissaries||Savings Percentage*|
|Alaska / Hawaii||9||32.6%|
*Calculation includes applicable taxes in commercial grocery store prices and surcharge in commissary prices; without these, savings would be US (22.3%); Overseas (45.6%); Global (25.7%). 35 States (70%) do not have sales tax on food items.
For more details on the commissary's new business model, visit the Transformation FAQs.
About DeCA: The Defense Commissary Agency operates a worldwide chain of commissaries providing groceries to military personnel, retirees and their families in a safe and secure shopping environment. Commissaries provide a military benefit and make no profit on the sale of merchandise. Authorized patrons purchase items at cost plus a 5-percent surcharge, which covers the costs of building new commissaries and modernizing existing ones. By shopping regularly in the commissary, patrons save thousands of dollars annually. A core military family support element, and a valued part of military pay and benefits, commissaries contribute to family readiness, enhance the quality of life for America's military and their families, and help recruit and retain the best and brightest men and women to serve their country.
Kevin L. Robinson
(804) 734-8000, Ext. 4-8773