2013 was a rough year for the Commissaries, the government-funded supermarkets located on U.S. military bases around the world. First, there was the threat of potentially reducing or eliminating taxpayer funding for the stores. Then came the government sequester and subsequent shutdown that caused Commissaries to close for a time. The sequester and shutdown are long since over, but the issue of government funding now looms larger than ever – and the Commissary isn’t taking it lying down.
The Defense Commissary Agency (DeCA) has come out swinging in the new year, making a pre-emptive strike ahead of what could be a contentious debate about its budget next month. The agency has released its annual price comparison survey, which it says shows military families save more than 30% by shopping at the Commissary – and that they would suffer greatly if that benefit were to be messed with.
The price comparison has long been limited to just the Commissary and other grocery stores. But this time, the survey included prices from club stores, drug stores, dollar stores and big-box stores. “It’s not enough for us to say that the commissary is worth the trip and a significant part of the military’s total compensation package,” said DeCA Director and CEO Joseph H. Jeu. “This study proves our overall savings hold up across a much wider retail landscape.”
DeCA estimates that the 30% savings amounts to more than $2.6 billion that military families can keep in their own pockets by shopping at the Commissary. And the 100 million coupons that Commissary shoppers used, saved them an additional $91 million in 2013.
But critics have said that all of those savings come at too high of a cost – to taxpayers. When U.S. Senator Tom Coburn issued a report in late 2012 criticizing Pentagon spending, and recommending the end of about $1.4 billion a year in government subsidies for Commissaries, it evoked a passionate response from Commissary supporters. Eliminating the subsidy, they argued, would cause Commissary prices to rise, thereby negating the entire benefit. Others advised that there was nothing to worry about – that they’ve heard the same proposal many times before, and nothing had ever become of it.
But that was before the Pentagon itself admitted that it would, in fact, consider eliminating the Commissary subsidy in its next budget plan. “We did task the Defense Commissary Agency for a range of options including how they would operate with less or no taxpayer subsidies,” Joint Chiefs Chairman Army Gen. Martin Dempsey said last month. “Military exchanges operate without being subsidized by your taxes. The same potential exists with commissaries.”
Notably, though, he added that “we have no plans to close our commissaries.” As many have pointed out before, eliminating the $1.4 billion annual subsidy, and shutting down the Commissary system altogether, are not the same thing.
Some military families worry, though, that one may lead to the other. If the subsidy is eliminated, and prices rise, and the Commissary customer base declines, and keeping all of the stores open just isn’t viable anymore, it could result in a domino effect across the entire system. “Closing or substantially reducing the number of (U.S.-based) commissaries would lead to higher prices and loss of benefit in both the remaining remote and overseas stores,” Tom Gordy, President of the Armed Forces Marketing Council, told a Congressional committee last November. “This will lead to significant price increases due to the loss of economies of scale, and manufacturers will no longer be able to provide promotions and coupons that further enhance the savings benefit.”
Opponents of the Commissary subsidy say there are better ways to spend taxpayer dollars in tight times, than funding government-run grocery stores. Commissary supporters say it’s an important part of the overall benefit package for military families who don’t get enough as it is. They argue that there must be other places to cut.
Unfortunately, Jeu acknowledged, the Commissary “faces the same fiscal challenges as other government agencies.” Added Gen. Dempsey, “all cost-cutting efforts need to be on the table… But we haven’t made any decisions. We’ve got to drive toward greater efficiencies and this is just one of the potential areas.”
The Pentagon budget for 2015 is expected to be unveiled sometime next month. And you can bet that a whole lot of Commissary shoppers will be watching, to see what impact it might have on their own budgets for years to come.
Image source: Defense Commissary Agency
