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Plan to combine exchanges, commissaries would raise prices

Aug. 30, 2011 - 05:07PM   |   Last Updated: Aug. 30, 2011 - 05:07PM  |  
Shoppers peruse the aisles at the San Diego Commissary at the 32nd Street Naval Base in San Diego, Calif.
Shoppers peruse the aisles at the San Diego Commissary at the 32nd Street Naval Base in San Diego, Calif. (Navy Times)
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A Senate Veterans' Affairs Committee bill that would consolidate the military commissary and exchange systems has service members and military advocates deeply concerned.

The bill calls for the consolidated retail system to become self-sufficient by 2016 — possibly forcing prices throughout the new system to rise by about 7 percent.

Budget savings from such a move would be used to pay for a proposed health benefit for veterans and family members suffering effects of exposure to contaminated water at Camp Lejeune, N.C., from the 1950s through the 1980s. The bill is pending before the full Senate.

While military advocates have supported helping those veterans and families, they say cutting the commissary benefit to pay the bill would be wrong. The Military Officers Association of America's legislative update for July said it "strongly opposes this sneak attack on the military benefits package."

Shoppers interviewed recently at Fort Belvoir, Va., said officials must consider other options for the military community before deciding whether to merge the commissary and exchange systems and reduce commissary savings for military customers.

The Senate committee bill has revived a decades-old idea to consolidate the stores into one system.

The plan would save about $1.3 billion annually in taxpayer dollars — the commissaries' total annual appropriation, which pays for operating expenses and allows commissaries to sell groceries at cost, as is now required by law.

Commissary customers see an average 30 percent savings compared with off-base grocery stores. Exchanges, which are mostly self-sufficient, get about $200 million a year in taxpayer support, primarily for shipping goods overseas, and offer about 20 percent savings.

But if the commissary subsidy is eliminated, operating efficiencies in a combined system would produce about 20 percent of the budget savings required for the consolidated system to be self-sufficient. To get the rest of the way, prices would have to rise by about 7 percent in commissaries and exchanges, according to a Congressional Budget Office analysis.

Give up savings?

Army Maj. Sam Sok said the plan causes him concern, mainly for younger enlisted troops.

"They need all the help they can get," Sok said. "There are guys getting married young and starting their families. They rely on the commissary and the PX. … If there's a proposal to cut their services, it's not a good thing."

Commissary officials estimate that single service members save about $1,542 a year by shopping in commissaries. A family of four saves about $4,476 a year.

Officials might be able to cut overhead costs by consolidating the systems, conceded Army Sgt. Maj. Lynette Streitfield. But if the idea is to save money, she said, officials "could stave off the increase in prices, and give it time to see what their intake is, before they start upping prices."

Otherwise, it's an erosion of benefits, said her husband, retired Navy Chief Musician Robert Streitfield. The effect on morale, welfare and recreation programs also should be considered, too, he said, given that fewer people might shop if the savings were less. He noted that less revenue means lower contributions to MWR funds.

"The unintended consequence of that 7 percent increase is that people would go to Costco and BJ's," he said. "It seems active-duty service members would suffer more," he said, as installations might have to cut back on MWR programs.

Air Force Col. Eric Hill, who works at the Pentagon, also raised concerns about MWR funding.

"I certainly think that all the value of the commissary and exchange benefits we get, and their contributions back to MWR, would be worth investigating," he said.

Not all of the service members interviewed were opposed to consolidation.

Retired Army Sgt. 1st Class Sophia Davis said it might be worth paying slightly higher prices for the convenience of having commissary and exchange stores merged into one-stop shopping centers, like Walmart super centers.

"People like convenience … not running to both establishments to save time," she said.

Marine Sgt. Layton Lamphere says he'd gladly give up some of the savings he gets at military stores to help the U.S. economy.

Lamphere said that in the current budget environment, "everybody has to make cuts to help out as much as we can for the economy."

"I'll give up 7 or 8 percent to make sure we're getting a paycheck every two weeks."

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