Lawmakers urge DoD to take action to curb rising commissary prices
Lawmakers are urging Defense Secretary Lloyd Austin to take action to curb rising prices in military commissars as military families face inflationary grocery costs.
“Families across the country — including those on our military bases — are grappling with rising costs for basic daily needs,” Rep. Marc Veasey, D-Texas, said in a May 19 announcement. a letter sent to Austin. He and Rep. Steven Horsford, D-Nevada, led the effort, and the letter was signed by six other fellow Democrats.
Lawmakers asked Austin to remove the requirement for commissioners to make a profit.
Removing this requirement would have an “immediate and direct impact on families, by reducing their grocery bills and extending their wages as a non-wage allowance, and reducing food insecurity and inflationary effects,” they said. writes lawmakers.
Essentially, this would allow the Defense Commissary Agency to provide an additional savings of 3% to 5% over what customers currently enjoy, said Tom Gordy, president of the Armed Forces Marketing Council, an organization of more than 400 manufacturers who supply products. Commissaries, exchanges and other military resale activities. In FY 2021, the Commissary’s overall savings was 22.7% compared to out-of-gate stores, which is lower than the Commissary’s 23.7% savings imposed by law.
Until 2017, commissary products were priced at supplier cost, and stores relied solely on taxpayers’ money to operate. A 5% surcharge on customer purchases was – and still is – used primarily to finance the construction and renovation of the Commissary’s stores.
The cost of operating stores, such as employee salaries, is funded primarily by taxpayer dollars, typically around $1.2 billion per year. But there were decades of pressure within the DoD to reduce or eliminate the amount of taxpayer money used to fund the commissioner’s benefit. So the DoD asked Congress to change the law to allow commissioners to begin “variable pricing,” which gave them the ability to raise the prices of some products and lower the prices of others.
The aim has been to reduce the amount of taxpayers’ money required to operate the stores, with profits generated by markups on variable priced items.
Lawmakers are asking Austin to remove this DoD requirement for commissioners to make an overall profit. The commissioners generated $108 million in profit in fiscal year 2021 with the higher prices, they said, and “that’s $108 million out of the pockets of our military families.”
In fiscal year 2022, the commissioner’s agency is expected to generate about $119 million in profit, and the budget request for fiscal year 2023 includes $128 million in profit to offset taxpayer funding.
The requested action would not require the implementation of any new programs, lawmakers said.
While the variable pricing method would still be used, stores could lower prices for certain products — even below the supplier’s cost, Gordy said. The commissary agency makes some profit from its house brand, i.e. house brands, and these brands are generally less expensive than the national brands. This could compensate for lower prices than the supplier charges the commissary agency for national brands.
The Commissary’s agency has launched a variety of efforts to try to bring more deals to customers, including a “Commissary’s Store Brand Price Protection Event” in May, offering at least one 20% discount on more than 900 store brands from Commissary.
Commissary officials have also faced commodity shortages for a variety of reasons, including nationwide supply chain issues.
Karen has covered military families, quality of life and consumer issues for Military Times for over 30 years, and co-authored a chapter on media coverage of military families in the book “A Battle Plan for Supporting Military Families”. She previously worked for newspapers in Guam, Norfolk, Jacksonville, Florida and Athens, Ga.