Honoring Our Nation’s Commissaries DeCA striving to boost sales, savings for ‘our customers’ worldwide by Treva Bennett, senior content creator The Defense Commissary Agency (DeCA), headquartered at Fort Gregg-Adams in Virginia, operates a worldwide chain of 235 commissaries providing groceries to U.S. military personnel, retirees, service-related disabled veterans and their families. Under the leadership of Director and CEO John Hall, DeCA is aiming to significantly boost sales and savings for its patrons. Hall, who has served as DeCA director since June 2023, has set a goal to reach $8 billion in sales by 2028. DeCA currently generates $4.7 billion in sales annually. By growing sales, the agency will be able to deliver even greater savings to customers. A non-profit agency, DeCA receives appropriated funds from Congress through the Department of Defense. In fiscal year 2023, DeCA received about $1.4 billion in appropriated dollars, Hall said. John Hall “We returned nearly $1.6 billion in savings, specifically, $112 million more in FY23 in savings to our customers than we received in appropriated dollars to run the Defense Commissary Agency,” he said. From 2022-23, DeCA sales grew by nearly 10 percent. In 2024, Hall said growth is expected at about 3 percent, “which is a little lower than we wanted but higher than the commercial grocery industry.” The growth in recent years follows a period of declining sales. Hall said DeCA had achieved $6 billion in sales in FY2012. That was followed by about 10 years of declining revenue, which he attributed to the use of a cost-plus 1 percent pricing model. The agency now uses a variable pricing model. He added that the goal to drive sales to $8 billion is “all about increasing savings to our customers. When we get to $8 billion in sales, that $112 million return on investment becomes a $1.1 billion return on investment. Increased sales generate increased savings for our customers. That is the reason we’re driving ourselves to achieve such a stretch goal.” Jim Flannery, chief transformation officer for DeCA, said the commissary benefit is part of the military pay and benefits package. By law, DeCA must provide a 23.7 percent savings over what its patrons can get outside the gate, he noted. Recently, the agency has worked with the Secretary of Defense to take that savings up to 25 percent. “The more revenue we generate, the more 25 percent savings we deliver. We amplify what Congress gives us. We turn back to our military patrons more than the taxpayers fund us. By 2028, we are pretty confident we’re going to give back twice as much in savings as we received in appropriations to our patrons,” Flannery said. Jim Flannery The savings puts real dollars in the pockets of commissary patrons. Hall added that the variable pricing model enables DeCA to sell key value items such as milk, bread, eggs and diapers at a greater savings rate. “For example, we save about 35 percent on meat for our customers. We invest in those items. We essentially subsidize those items so that we can sell them at an even lower price. For those things that our customers really need, we generate really excellent savings,” Hall explained.
Rebuilding brand DeCA is working to rebuild its brand and to get more shoppers into the stores. “We still have a perception out there that we’re not saving [customers] as much as we actually are, but we have the data to demonstrate that. We set the goal a year ago and have
multiple building blocks that have dollar goals associated with them that will get us to $8 billion,” Hall said. He also noted that while there is no sales tax on commissary purchases, there is a 5 percent surcharge. Those dollars are used to invest in improving DeCA’s infrastructure, which Hall said is a “serious challenge.” He added that the 25 percent savings includes that 5 percent surcharge. “Because of those 10 years of declining sales, we didn’t generate the surcharge we needed to routinely replace things like chillers and freezers, those things needed to maintain store operations,” he said. As a result, the agency is in “a little bit of a hole,” with about a $3.2 billion bill to pay. Hall said DeCA is working with Congress and others to get some appropriated dollars to help pay that bill.
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Spreading the word In an effort to eliminate misconceptions that still linger about using the commissary benefit – and to reach eligible patrons who are not using their benefit – DeCA has increased its outreach. One initiative, DeCA Outside the Walls, delivers the benefit outside the walls of the commissary, as its name suggests. Hall said the Army has kiosks that it operates in areas convenient to where soldiers live and/or work. DeCA supplies the kiosks, which makes access to the benefit far easier, he added. Other initiatives include making bulk deliveries to certain locations. These include isolated areas that don’t have a commissary. Hall said these locations have increased from about 12 last year to 38 in 2024. “There’s a lot of expanding the benefit and delivering the benefit to locations other than the stores themselves,” he said. Please see page 20