More savings, full shelves are the focus of new commissary chief

Maintaining or even increasing customers’ savings at the commissary is his top priority, said John E. Hall, who took the helm of the Defense Commissary Agency June 4.

Building on his predecessors’ accomplishments over the past several years, he’s also focusing on getting more products to fully stock the shelves more quickly, and on making the stores even more convenient. They’re working on other areas, too, such as improving the quality of produce, Hall said, during a recent interview with Military Times.

Commissaries got a big boost from Secretary of Defense Lloyd Austin last September, as Austin’s “Taking Care of Our People” initiative pumped more money into commissaries in order to cut the prices at the register. By removing the 2017 Defense Department requirement that commissaries had to make a profit to offset operational costs, Austin enabled commissary officials to drop prices by 3% to 5% across more than 40,000 products in their stores. They’re saving customers an average of at least 25% on every grocery basket that leaves the store, Hall said.

Overall, transactions and foot traffic in the stores have increased by about 8% since those prices were lowered, compared to the same period in fiscal 2022, Hall said. Dollar sales have increased by 11%, although inflation plays a part in that increase, as rising prices of groceries have affected all consumers. But “clearly, the lower prices have driven increased sales and increased transactions,” Hall said.

A 2022 Government Accountability Office report described the conflict between the reforms DoD implemented in 2017, and customer savings. Requiring DoD to raise prices to make a profit to pay for some operational costs meant reduced savings for customers, auditors stated. Lawmakers asked DoD to stop requiring commissaries to generate a profit in order to provide some relief for military families from rising food prices.

For fiscal 2024, DoD has asked for $1.4 billion to operate the 236 stores worldwide.

More junior military members are using their commissary benefit, too, since Austin made his announcement. “That’s where the cost savings benefit means the most,” said Marine Corps Sgt. Maj. Michael Saucedo, the commissary agency’s senior enlisted adviser since September 2020. “They’re the ones who really need to use this benefit.”

From October through June, transactions are up by 7% for those in the ranks of E-1 to E-3 compared to the same period the previous year, and transactions are up by 14% for those in the O-1 to O-3 ranks, Saucedo said. He’s been working closely with senior enlisted leaders in the Pentagon across the services to push the message about the benefit to young service members, E-4 and below.

A lot of younger service members mistakenly think it’s only retirees, or married service members or officers who can use commissaries. “They don’t understand that it’s actually everyone who is serving,” Saucedo said. “We’ve got to get them in there, and we’re doing that.” Efforts are ongoing, he said, but “we can do better” to get the word out about the benefit.

“People don’t understand it’s a congressionally mandated benefit, part of the total compensation package for our active duty, retirees and service-connected disabled veterans,” Saucedo said. In January 2020, the commissary benefit was extended to veterans with any level of service-connected disability.

Hall and Saucedo provided some updates on initiatives to improve the commissary experience and savings for customers:

Supply chain woes

Even before the pandemic hit the supply chain hard, there were sporadic problems with getting products to the commissaries. Hall, a career logistician, has been building on efforts of his predecessors to address those issues. One focus area is within the Pacific, working to decrease the routine time it takes for items to get to South Korea — 42 days from a port on the West Coast, he said.

Officials have been using airlift to ease some of the shortages, but it’s more expensive. “Unfortunately, airlift has become too common,” Hall said. “The big thing is reducing the amount of time.” He’s reorganizing the commissary agency’s supply chain directorate, which, for years had been more focused on Europe than the Pacific. “We are changing that,” he said. He’ll be visiting the Pacific soon to personally see the challenges the stores are facing, he said.

“The bottom line from a customer’s standpoint is, if they look up on their shelf and they want a particular item that’s not there, then we’re not serving them. So, we’re working a lot within our supply chain, particularly in the Pacific, to make it better, and to increase stockage on our shelves.

One thing that customers may not understand, Saucedo said, is that the commissary agency doesn’t own the supply chain. “We don’t have warehouses full of food, or distribution centers that we own. We don’t own our own trucks and truck drivers. It’s a confusing system, but we don’t have authority over distribution centers. We work with our manufacturers and our suppliers to help influence distribution to our stores. We have a really close relationship with our industry suppliers.”

About those fruits and veggies

After it was announced that Hall would be the new commissary director, he said, “I had multiple senior leaders tell me: ‘Fix the produce.’ ” He’s heard it from other customers in the field, too. “We are getting better, we have indicators. We just need to keep getting better,” he said. And there are “hundreds of people working daily on making it better,” Saucedo said.

The quality of produce has been a perennial problem in some areas.

In December, commissary officials started a new program called “winning it fresh,” which has shown results, Hall said. That involves training and retraining on better processes for providing fresh produce.

However, he said he wants to communicate that to customers to get them back into the produce section.

Home delivery

The pilot program offering home delivery of commissary groceries is still in the works at eight commissaries, and has been extended to December. But officials have conducted market research and have gone back to the drawing board to make it a more viable program. Hall said they expect to issue a solicitation by the end of the summer for home delivery to expand beyond the eight pilot locations. There will have to be some adjustments because unlike retailers outside the gate, the commissary agency isn’t able to subsidize the cost of delivery.

Expanded hours

This is all about access to the benefit, Hall said. In the past year, commissary officials have moved 79 stores from being open six days a week to seven days. Another 12 have been moved from five days to six, and hours have been extended at 61 stores. “The bottom line is we want to be open when our customers need us to be open and when it’s convenient for them,” Hall said.

Those expanded days have brought in about 13% more transactions in those stores in the time period from October through May, compared to same time frame the previous year. Extended hours have brought in about 7% more transactions.