Friday, July 25, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Ex-commisary chief cautious about cost of cuts

By
From page B10 | April 27, 2014 |

A retired Army sergeant first class living in northeast El Paso, Texas, says he and his wife will stop shopping on Fort Bliss if the Department of Defense, as planned, allows commissary prices to climb within 10 percent of local grocers.

“I am not the only one here who thinks the same way,” Louis Lindemann said. “By the time we pay for gas alone, we could go to the local Albertson’s or the Walmart food store around the corner. The commissary already has a number of items we can purchase cheaper on the economy.”

His email arrived moments after I concluded a phone interview with retired Army Major Gen. Richard E. Beale Jr., former director of the Defense Commissary Agency, who believes Lindemann is correct.

So many retirees, Reserve and Guard members and even active-duty families would stop shopping on base, if Defense is allowed to slash commissary budgets such that the entire military resale system would be at risk, Beale said.

Defense Secretary Chuck Hagel, backed by the Joint Chiefs of Staff, wants DeCA’s annual appropriation of $1.4 billion cut to $400 million by 2017. Average shopper savings of 30 percent would fall to 10 percent as commissaries become self-supporting like the military exchange systems.

Beale, who led DeCA from 1992 to 1999 both as an officer and as the agency’s first civilian director, said such a deep cut is enormously risky.

Beale said, “The role of the dice is not just on whether the commissaries will survive, it’s whether the entire system can survive,” including exchanges and the on-base quality-of-life programs that exchange profits now support.

“I certainly understand the predicament in which our civilian and military leaders find themselves,” Beale said to begin our interview. With defense budgets squeezed and automatic cuts threatened if Defense officials don’t identify enough cuts on their own, “there are no good choices.”

However, Beale said, leaders are mistaken to assume commissaries can be converted into self-supporting stores and still offer discounts that attract enough customers to sustain a low-cost grocery benefit.

“What makes the commissary benefit are the appropriated dollars,” Beale said, urging me to underscore the point. “Every dollar you take away from the appropriation is a dollar out of service members’ pockets.”

Defense officials believe by 2017, they will only need $400 million a year for commissaries, to transport goods to stores overseas and to subsidize stores in remote stateside locations. Otherwise, stores can operate on their own if prices are raised and average savings are lowered from 30 percent to 10.

What they overlook, Beale said, is how critical robust commissary savings are to exchange operations. Traditionally, 35 to 45 percent of exchange shoppers are enticed to shop on base by commissary savings, where food prices are set at cost plus a 5 percent surcharge.

If those prices climb 20 percent to be able to pay staff salaries and other costs, not only would the number of commissary patrons fall sharply, but also exchanges would see their businesses plummet, Beale predicted.

“Can you put commissaries on a cost-recovery basis using a business model like the exchanges and J.C. Penney and Walmart? In theory, yes,” Beale said. “In reality the answer probably is no.”

The big reason is patrons won’t accept it.

“Every dollar you take away from the appropriation has to be paid by someone. That someone, in this case, is the patron,” Beale said, “because DeCA has no other way of raising revenue.”

Without hefty savings, many retirees, Guard and Reserve personnel and even active-duty families living far from base have little incentive to drive past their local supercenters and grocery stores to shop on base.

Another reason the idea is risky, Beale said, is that as food discounts narrow and sales drop, commissary suppliers will raise product prices to try to offset lost profits.

Beale recalled that while he was DeCA director, the agency also was under enormous pressure to reduce its appropriations. That’s when it began using a nationwide estimate of average shopper savings to tout the benefit.

“The notion of 30 percent savings on groceries for the military community was a useful sound bite, slogan, bumper sticker and rally cry,” he said. But “it has now created a perception of a standard which can be trimmed with minimum consequences.”

The 30-percent savings estimate is derived by comparing DeCA’s Basic Ordering Agreement price points, as offered by suppliers, with pricing strategies used by grocery chains. But what commissary shoppers actually save varies widely by region based on local food prices, Beale said.

“For example, in my last year at DeCA, when the published national savings exceeded 29 percent, the Southern Region savings were in the low 20s, whereas in the Northwest-Pacific region savings were in mid-30s. And so it went across the country,” Beale said.

More than half of active duty forces and retired military live between Tidewater, Va., and East Texas, he said, where actual commissary savings are “much lower than the published national average. I have maintained that position personally since I was the director. Publicly, I stuck with the party line. In retrospect, that may have been a mistake.”

It means that if commissary prices are allowed to pop by 20 percent during the next three years, shoppers in the south and southeast are likely to see their discounts from shopping on base all but disappeared.

“Basing budget decisions for DeCA and the welfare of service members on an average national commissary savings figure is about as useless as trying to calculate an average supplement for basic housing allowances by relying upon a single nationwide figure for cost of housing,” Beale said.

So a figure used for the last 15 to 20 years to help justify the commissary benefit is now used to justify reducing it, he said.

A better figure for leaders to weigh today might be “one quarter of 1 percent of the defense budget.” That’s all that’s needed, he said, to preserve a benefit the U.S. military has enjoyed, in some form, for the past 189 years.

Send comments to Military Update, P.O. Box 231111, Centreville, VA, 20120, email milupdate@aol.com or tweet @Military_Update.

LEAVE A COMMENT

Discussion | 3 comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • Rich GiddensApril 24, 2014 - 5:48 pm

    The Obama administration has lost the war, destroyed morale and discipline and is now angering the troops with it's bad ideas. The stimulis bankrupted the USA and now our defenses are imperiled. What a mess!

    Reply | Report abusive comment
  • Dave ShreeveApril 27, 2014 - 10:27 am

    "A better figure for leaders to weigh today might be “one quarter of 1 percent of the defense budget.” That’s all that’s needed, he said, to preserve a benefit the U.S. military has enjoyed, in some form, for the past 189 years." Exactly! It is also what reveals this whole deal to reduce the commissary subsidy to be nothing but a purely political move on the part of the current administration. Why are they so determined to shut down the commissaries? It makes no financial or economic sense.

    Reply | Report abusive comment
  • Rich GiddensApril 27, 2014 - 3:17 pm

    Take a big guess where the groceries for the White House and AF 1 come from!!! Yeah, close it Obama....LOL!

    Reply | Report abusive comment
.

Solano News

 
CSP Solano inmates make music for rehabilitation

By Krissi Khokhobashvili | From Page: A1, 2 Comments | Gallery

Big Chuckllz, fellow comics want to keep Fairfield laughing

By Amy Maginnis-Honey | From Page: B1 | Gallery

 
Holly Stell ready for new adventure, plans Sunday concert

By Amy Maginnis-Honey | From Page: B1, 1 Comment | Gallery

Solano actors join forces for new single, ‘Groove Me’

By Amy Maginnis-Honey | From Page: B1 | Gallery

 
Organizers seek riders, volunteers for Ride to Defeat Diabetes

By Barry Eberling | From Page: A3 | Gallery

 
Friday concerts begin Aug. 1 at Solano Town Center

By Amy Maginnis-Honey | From Page: B3

 
Bay Stage filled with entertainment at Solano County Fair

By Amy Maginnis-Honey | From Page: B3

 
 
Bay Area’s air district issues Spare the Air alert

By Barry Eberling | From Page: A4

 
Assembly candidate Henthorn to appear at GOP dinner

By Ryan McCarthy | From Page: A5

 
Fairfield police log: July 23, 2014

By Susan Hiland | From Page: A12

Daily Republic seeks good news for column

By Daily Republic staff | From Page: A12, 22 Comments

 
.

US / World

Judge argues for return of firing squad executions

By The Associated Press | From Page: A1, 8 Comments

 
California removes lane splitting guidelines

By The Associated Press | From Page: A1, 3 Comments

Execution offers evidence against lethal injection

By The Associated Press | From Page: A1

 
Outcry saves rare redwood from being chopped down

By The Associated Press | From Page: A4, 1 Comment

California man gets 4 years in counterfeit case

By The Associated Press | From Page: A5

 
SF professor charged with taping students in bathroom

By The Associated Press | From Page: A5

California wine collector set for sentencing on fraud charges

By The Associated Press | From Page: A5

 
 
Obama wants limits on US company mergers abroad

By The Associated Press | From Page: A5

Toxic algae closes Oakland’s Lake Temescal

By The Associated Press | From Page: A5

 
House panel clears way for vote on Obama lawsuit

By The Associated Press | From Page: A6, 1 Comment

Feds cap fines for not buying health insurance

By The Associated Press | From Page: A6

 
House, Senate chairs offer competing bills on VA

By The Associated Press | From Page: A7, 2 Comments

Doctor fired back at gunman in hospital attack

By The Associated Press | From Page: A7, 1 Comment

 
Social Security’s $300M IT project doesn’t work

By The Associated Press | From Page: A7

More US girls now getting cervical cancer vaccine

By The Associated Press | From Page: A7

 
Storm slams Virginia campground; 2 dead

By The Associated Press | From Page: A7

Ukrainian prime minister announces resignation

By The Associated Press | From Page: A10

 
UN school in Gaza caught in cross-fire; 15 killed

By The Associated Press | From Page: A10

Air Algerie jet with 116 on board crashes in Mali

By The Associated Press | From Page: A10

 
Very bad week: Airline disasters come in a cluster

By The Associated Press | From Page: A10

Islamic militants seize part of Syrian army base

By The Associated Press | From Page: A10

 
Iraq elects new president as attacks kill dozens

By The Associated Press | From Page: A10

As inmate died, lawyers debated if he was in pain

By The Associated Press | From Page: A12, 1 Comment

 
.

Opinion

Call for tech diversity misplaced

By Bud Stevenson | From Page: A11

 
Is parenting being criminalized in America?

By Ben Boychuk and Joel Mathis | From Page: A11, 1 Comment

 
Coyote epidemic in Fairfield

By Letter to the Editor | From Page: A11, 10 Comments

Editorial Cartoons for July 25, 2014

By Daily Republic Syndicated Content | From Page: A11

 
.

Living

Today in History for July 25, 2014

By The Associated Press | From Page: A2

 
Community Calendar: July 25, 2014

By Susan Hiland | From Page: A2

Horoscopes for July 25, 2014

By Holiday Mathis | From Page: A9

 
My siblings want friends to handle sale of our father’s house

By Kathy Mitchell and Marcy Sugar | From Page: A9

.

Entertainment

Week in preview July 25-31, 2014

By Amy Maginnis-Honey | From Page: B1

 
Review: Allen casts a limp spell in ‘Magic’

By Jake Coyle | From Page: B2

Review: ‘Lucy’ won’t stretch your brain capacity

By The Associated Press | From Page: B2

 
Robert Downey Jr. open to returning for ‘Iron Man 4’

By The Associated Press | From Page: B2

 
Will Ferrell and Adam McKay to go wild with ‘Manimal’ movie

By Mcclatchy-Tribune News Service | From Page: B2

Kiss, Usher, J.Lo to perform at Fashion Rocks

By The Associated Press | From Page: B3

 
Pop star Azalea talking fashion on MTV

By The Associated Press | From Page: B3

Jon Bon Jovi to be honored for humanitarian work

By The Associated Press | From Page: B3

 
Malkovich, Cumberbatch make Comic-Con premieres

By The Associated Press | From Page: B3

Entertainment calendar July 25, 2014

By Susan Hiland | From Page: B4

 
TVGrid

By Daily Republic Syndicated Content | From Page: B6

Stonestreet: Acceptance will grow for gay athletes

By The Associated Press | From Page: B6

 
.

Sports

Moss powers A’s past Astros

By The Associated Press | From Page: B7 | Gallery

 
Eagles soar past Expos in Area 1 tourney

By Paul Farmer | From Page: B7

Hudson solid, Hammels better in Giants’ loss to Phillies

By The Associated Press | From Page: B7

 
Indians win 14-8 over Mudcats

By Marcus Lomtong | From Page: B7

49ers’ Smith plans to meet soon with Commissioner Goodell

By The Associated Press | From Page: B7 | Gallery

 
Pucker up! NASCAR returns to Brickyard

By The Associated Press | From Page: B8

Manning getting used to new faces on Broncos

By The Associated Press | From Page: B8

 
Raiders CB Hayden to start camp on PUP

By The Associated Press | From Page: B8 | Gallery

Nibali wins Stage 18, closes in on Tour victory

By The Associated Press | From Page: B8 | Gallery

 
Suspended WR Blackmon arrested on drug complaint

By The Associated Press | From Page: B9

Signups for Friday, July 25, 2014

By Paul Farmer | From Page: B9

 
Ravens RB Rice receives 2-game suspension from NFL

By The Associated Press | From Page: B9

Lynch expected to hold out from Seahawks camp

By The Associated Press | From Page: B9

 
Putnam, Petrovic share Canadian Open lead

By The Associated Press | From Page: B9 | Gallery

AP source: Gordon to meet with league Aug. 1

By The Associated Press | From Page: B9

 
Langer leads British Senior by 2 after 1st round

By The Associated Press | From Page: B9

Taiwan sweeps US in 1st day of International Crown

By The Associated Press | From Page: B9

 
A’s Johnson designated for assignment

By The Associated Press | From Page: B9

AP Source: NFL stadium sites explored in Toronto

By The Associated Press | From Page: B9

 
2 Texas football players charged with sexual assault

By The Associated Press | From Page: B9

Cavs sign Wiggins, who can’t be traded for 30 days

By The Associated Press | From Page: B9

 
This date in sports history for Friday, July 25, 2014

By The Associated Press | From Page: B10

Sports on TV/Local sports for Friday, July 25, 2014

By Paul Farmer | From Page: B10

 
Weather for July 25, 2014

By Daily Republic | From Page: B12

.

Business

LR4 is updated for fuel efficiency

By Ann M. Job | From Page: C1

 
Ford’s green push

By Mcclatchy-Tribune News Service | From Page: C2

Varying health premium subsidies worry consumers

By The Associated Press | From Page: A6

 
Court throws out Chiquita terror payment claims

By The Associated Press | From Page: B11

Bombardier restructuring cuts 1,800 jobs globally

By The Associated Press | From Page: B11

 
Dick’s Sporting Goods lays off 478 PGA golf pros

By The Associated Press | From Page: B11

US new-home sales plummet in June

By The Associated Press | From Page: B11

 
Across US job market, layoffs are becoming rare

By The Associated Press | From Page: B11

US unemployment aid applications drop to 284,000

By The Associated Press | From Page: B11

 
Dunkin’ pushing cashiers to ‘upsell’ in afternoons

By The Associated Press | From Page: B11

.

Obituaries

Shirley T. ‘Mac’ McFadden

By Nancy Green | From Page: A4, 5 Comments

 
Nelson Max Allen

By Susan Hiland | From Page: A4

.

Comics

Baldo

By Daily Republic Syndicated Content | From Page: A8

 
Beetle Bailey

By Daily Republic Syndicated Content | From Page: A8

Baby Blues

By Daily Republic Syndicated Content | From Page: A8

 
B.C.

By Daily Republic Syndicated Content | From Page: A8

Blondie

By Daily Republic Syndicated Content | From Page: A8

 
Peanuts

By Daily Republic Syndicated Content | From Page: A8

Dilbert

By Daily Republic Syndicated Content | From Page: A8

 
Wizard of Id

By Daily Republic Syndicated Content | From Page: A8

Zits

By Daily Republic Syndicated Content | From Page: A8

 
Rose is Rose

By Daily Republic Syndicated Content | From Page: A8

Garfield

By Daily Republic Syndicated Content | From Page: A8

 
For Better or Worse

By Daily Republic Syndicated Content | From Page: A8

Get Fuzzy

By Daily Republic Syndicated Content | From Page: A8

 
Frank and Ernest

By Daily Republic Syndicated Content | From Page: A8

Sally Forth

By Daily Republic Syndicated Content | From Page: A8

 
Pickles

By Daily Republic Syndicated Content | From Page: A8

Word Sleuth

By Daily Republic Syndicated Content | From Page: A9

 
Crossword

By Daily Republic Syndicated Content | From Page: A9

Bridge

By Daily Republic Syndicated Content | From Page: A9

 
Cryptoquote

By Daily Republic Syndicated Content | From Page: A9

Sudoku

By Daily Republic Syndicated Content | From Page: A9

 
.

Solano County Fair 2014

Cultural exhibits, entertainment are fair highlights

By Solano County Fair | From Page: SCF2 | Gallery

Bay Stage talent competitions, nightly karaoke party

By Solano County Fair | From Page: SCF3

Jack & Bernice Newell Junior Livestock Auction returns to fair

By Solano County Fair | From Page: SCF4 | Gallery

Big names, big sounds grace fair stage

By Solano County Fair | From Page: SCF4 | Gallery

Bay Stage welcomes wide array of entertainers

By Solano County Fair | From Page: SCF15 | Gallery

Solano shines at fair’s County and Cities Expo

By Solano County Fair | From Page: SCF16