Military Market Facts 2016 - The American Logistics Association

Military Market Facts June 2016 A Brief Overview Our History • 
1920 Incorporated as the Quartermaster’s Associa7on (QMA) QMA was composed of officers of the Regular Army, the Na:onal Guard, the Organized Reserves, key civilians in the federal
government and leaders of industry. QMA disseminated professional informa:on concerning all Quartermaster and related ac:vi:es, and fostered and promoted a spirit of coopera:on and friendly exchange of ideas among the members. • 
1961 QMA becomes the Defense Supply Associa7on (DSA) The name was changed in response to the establishment of the Defense Supply Agency, as well as the increasing responsibili:es being placed upon the U.S. Army Quartermaster Corps to provide food, clothing and general supplies to all the Armed Forces under DoD’s single manager concept. The Associa:on was composed of officers of the Armed Forces, key civilians in the federal government and leaders of industry. • 
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1972 DSA becomes the American Logis7cs Associa7on (ALA) To eliminate confusion with the Defense Supply Agency, the Associa:on changed its name to the American Logis:cs Associa:on and adopted the “eagle in the oval” logo. The new ALA carried forward the same objec:ves of the Quartermaster and Defense Supply Associa:ons. According to an editorial in the July/August 1972 issue of ALA’s Review Magazine, the new name “was chosen to “show clearly who we are, what we do and how we intend to func:on. ‘American’ must always exalt the pride of patrio:sm…we believe in our country, in its customs, in its ideas and in its business efforts. ‘Logis:cs’ is defined as that branch of the military art which embraces the details of transport and supply. ‘Associa:on’ is a union; a connec:on of persons or things, or a union of persons in a company or society for some par:cular purpose.” 1974 ALA reorganizes into a na7onal trade associa7on Led by a Board of Directors comprised of representa:ves from industry, the newly organized associa:on was designed to serve industry and its related interests in military and other government ac:vi:es. • 
2005 ALA Board of Directors revised the mission of ALA To include a focus on Total Quality of Life and MWR/Services. The American Logis:cs Associa:on promotes, protects, and enhances the military resale and quality of life benefits on behalf of our members and the military community. Programs and Services •  It is our goal to provide valuable programs and services that enable all members to operate effec:vely and efficiently with the military resale system and services. •  ALA is the only organiza:on that can give you the resources and the informa:on you need to succeed. We strive to increase the visibility of the Associa:on and enhance the services that ALA provides its members. Contact InformaAon American Logis:cs Associa:on 1101 Vermont Ave, N.W. Suite 1002 Washington, DC 20005 Phone (202) 466-­‐2520 Email: membership@ala-­‐na:onal.org www.ala-­‐na:onal.org Military Resale Market FY 2015 Total Sales: $ Billion Commissaries $ 5.51 B Ships Afloat $63.8 M Thru 2014 Exchange Data will be updated with Audited 2015 sales Sept 2016 Exchanges $ 13.502 B Thru 2014 Military Patrons AcAve Duty Demographics Authorized Shoppers Total Shoppers Authorized 2014: 12.6 Million DoD Civilian Employees 776,198 Million Ac7ve Duty 1,514.3 Million Re7rees 2.436 Million Family Members 6.93 Million Source: AAFES Con9ngency Planning Office-­‐Ac9ve Duty declining 2012-­‐2016 Guard & Reserve 1.190 Million Ac7ve Duty Military Personnel Trend 1.50 1.47 1.45 1.44 1.43 1.43 Million $ 1.40 1.39 1.35 1.37 1.37 1.4 1.41 1.39 1.38 1.4 1.38 1.35 1.34 1.32 1.30 1.25 1.20 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Calendar Year Active Duty Demographics
Male 1,170,702 85.3% 200,945 14.2% Officers Enlisted 16.4% 83.5% Source: DMDC Updated –Declining -­‐2016 Age Female <25 43% 26-­‐30 22% 31-­‐35 15% 36-­‐40 11% 41+ 22 50+ .01% Military Resale Agencies • 
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Defense Commissary Agency (DeCA) Army and Air Force Exchange Service (AAFES) Navy Exchange Service Command (NEXCOM) Marine Corps Exchange (MCX) Coast Guard Exchange Systems (CGX) Veterans Canteen Service (VCS) Defense Commissary Agency DeCA Profile Established: 1991 Employees: Approximately 17,000 Headquarters: 1300 E Avenue Fort Lee, VA 23801-­‐1800 Phone: (804) 734-­‐8253 Web site: www.commissaries.com Major Distribu7on Facili7es: CONUS Civilian Distributor Network Overseas DeCA Central Distribu:on Centers Director/CEO: Joseph Jeu, SES Deputy Director/COO: Michael Dowling Selected Opera7ons and Services: Grocery; Freeze; Chill; Produce Meat; Dairy; Deli/Bakery/Sushi FY 2015 Sales: $5.51 Billion DeCA Organiza7on Senior Enlisted Advisor Director / Chief Execu:ve Officer Resource Management General Counsel Inspector General Deputy / Chief Opera:ng Officer Washington Office Strategic Planning Chief Performance Officer EEO Execu:ve Director Store Opera:ons CONUS and OCONUS Stores (PAO, CPI and ESD) Execu:ve Director Infrastructure Support Execu:ve Director Sales, Marke:ng & Policy Opera:ons & Policy Business Requirements Cell Sales Store Support Human Resources Business Development Health & Safety E-­‐Commerce Shopper Insights Logis:cs CDC and CMPP Equip/Property Acct & Environmental Informa:on Technology Program Management Resale Contrac:ng Blue blocks -­‐ ALL assets at Fort Lee Yellow blocks -­‐ ALL assets geographically dispersed Green blocks -­‐ assets located at Ft Lee & geographically dispersed Engineering Acquisi:on Management 14 Mission Statement Deliver the Premier Quality of Life Benefit to the Armed Services Community -­‐ To enhance recrui7ng, reten7on and readiness by efficiently and effec7vely providing excep7onal savings and excellent products and superior services -­‐ EVERYTIME, EVERYPLACE. DeCA Facts •  Annual opera:ng Budget-­‐ Congressionally Funded •  Headquarters-­‐ Fort Lee, Virginia •  FY 2015 Sales-­‐ $5.51 Billion •  FY15 240 stores (168 CONUS and 72 OCONUS) •  Merchandise sold at cost plus 1% to cover shrinkage plus 5% surcharge applied at register •  Vendor stocking required for some categories •  Es:mated that 45% of DeCA shoppers are re:rees •  Commissaries recognized as the Premier Quality of Life non-­‐pay benefit DeCA Fiscal Year Sales 7.00 6.00 5.00 Billion $ 4.9 5 5 4.97 5.04 5.24 5.37 5.42 5.56 5.8 5.98 5.84 5.96 6.09 5.87 5.63 5.51 4.00 3.00 2.00 1.00 0.00 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Fiscal Year America’s Top Food Retailers Company Name
Sales (000)
1. Wal-Mart
$298,378,000
4,132
2. Kroger
$109,800,000
2,623
3. AB Acquisition
$58,322,940
2,290
4. Publix
$32,400,000
1,114
5. Ahold USA
$26,400,000
788
6. HEB
$23,000,000
315
7. Delhaize America
$18,058,000
1283
8. Meijer
$16,700,000
223
9. Wakefern Food Group
$15,700,000
187
10. Whole Foods Market
$15,389,000
419
11. Trader Joe’s
$12,800,000
448
12. Southeastern Grocers
$11,898,000
750
13. Aldi
$10,900,000
1,451
14. Target
$10,400,000
249
20. Defense Commissary Agency
$4,646,389
177
Source: Progressive Grocer Magazine, Nielsen March 2016
No. Stores
DeCA**
Measure
DeCA Actual*
Weekly Sales/Square Foot
$17.36
$24.59
$10.22
Weekly Sales
$577,421
$817,784
$318,170
Customer Purchase
$65.79
$93.17
$35.01
Square Feet/Store
33,261
33,261
46,000
Sales
$5.134B
$7.272B
$602.609B
Average Days Open Per Week
6.23
6.23
7
Average Hours Open Per Day
9.74
9.74
12 - 24
Adjusted for DeCA
Savings
Supermarket***
* DeCA sales data based on CY 2012 data for U.S. stores (including Puerto Rico) over $2 million in CY 2012 (171 Commissaries) to compare with industry ** Savings % used was the 2012 DeCA U.S. (50 State) savings of 29.4% aVer tax and surcharge. This % is applicable to U.S. data as used in these computaAons. Overall 2012 DeCA Worldwide savings aVer tax and surcharge was 31.2% ***Supermarket data from Food MarkeAng InsAtute (FMI) Web site www.fmi.org (Supermarket Facts -­‐ Figures -­‐ Industry Overview) 19
DeCA Sales Informa7on Store Rank Sales FY2015 Sales FY2015 Transac7ons #1 Fort Belvoir, VA $93,282,316 1,031,773 #5 Fort Campbell, KY $71,074,292 1,011,491 #10 Ramstein AB, GE $63,107,698 1,314,432 #25 Eglin AFB, FL $51,005,294 659,239 #50 Fort Riley, KS $37,831,551 671,589 #100 Naples NAS, Italy $21,304,947 414,556 Source: DeCA EOY FY15 Sales Report DeCA Prices All Merchandise at Cost +1% (shrinkage) + 5% (surcharge) • 
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No Slotng fees or co-­‐op adver:sing 100% of all deal money is passed to the patron 1% added at shelf & 5% is added at the register An ideal test market scenario since the effect of trade funds can be accurately assessed Distance Deters Commissary Store Visits • 
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The average Commissary is 2.5 7mes as far from home as the local grocery store However, by a 2 to 1 margin, patrons are willing to put up with inconveniences to save 30% on their grocery bill Coupons, SNAP and WIC Historical Comparisons FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
FY 2016 –
thru Oct 15
$105,198,170 $114,122,168
$112,703,419
$104,188,496
$91,005,779
$83,742,771
$71,843,845
$5,741,213
116,944,671
123,931,649
129,353,453
123,027,684
113,297,927
99,600,279
89,160,971
73,998,178
5,935,194
$0.78
$0.81
$0.85
$0.88
$0.92
$0.92
$0.91
$0.94
$0.97
$0.97
% Change in Coupon $ vs. Prior FY
5%
-5%
12%
8%
-1%
-8%
-13%
-8%
-14%
-14%
% Change in Coupon # vs. Prior FY
-1%
-8%
6%
4%
-5%
-8%
-12%
-10%
-17%
-16%
% Change in $ per Coupon vs. Prior FY
6%
3%
5%
4%
4%
0.40%
-1%
3%
3%
2%
FY 2006
FY 2007
FY 2008
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
FY 2016 –
thru Oct 15
$26,225,702
$24,851,516
$31,146,015
$52,954,938
$72,831,952
$87,837,643
$98,842,699
$103,670,751
$84,575,783
$79,550,563
$6,247,837
SNAP Transactions
272,899
233,876
282,879
501,477
717,006
856,330
947,930
968,358
805,325
750,853
59,551
SNAP $ per Transaction
$96.10
$106.26
$110.10
$105.60
$101.58
$102.57
$104.27
$107.06
$105.02
$105.95
$104.92
% Change in SNAP Dollars vs. Prior FY
-5%
25%
70%
38%
21%
13%
5%
-18%
-6%
-17%
% Change in SNAP Trans vs. Prior FY
-14%
21%
77%
43%
19%
11%
2%
-17%
-7%
-15%
% Change in SNAP $/Trans vs. Pr FY
11%
4%
-4%
-4%
1%
2%
3%
-2%
1%
-3%
FY 2006
FY 2007
FY 2008
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
FY 2016 –
thru Oct 15
$28,757,876
$29,266,430
$31,574,375
$30,209,689
$29,585,040
$29,878,377
$31,238,896
$29,223,857
$25,547,180
$23,975,653
$1,954,586
1,818,343
1,719,078
1,653,307
1,651,080
1,779,760
1,754,843
1,793,576
1,655,182
1,397,949
1,279,919
106,257
$15.82
$17.02
$19.10
$18.30
$16.62
$17.03
$17.42
$17.66
$18.27
$18.73
$18.39
% Change in WIC Dollars vs. Prior FY
2%
8%
-4%
-2%
1%
5%
-6%
-13%
-6%
-9%
% Change in WIC Trans vs. Prior FY
-5%
-4%
0%
8%
-1%
2%
-8%
-16%
-8%
-8%
% Change in WIC $/Trans vs. Prior FY
8%
12%
-4%
-9%
2%
2%
1%
4%
3%
-2%
COUPONS
FY 2006
FY 2007
FY 2008
Coupon Dollars
$93,744,094
$98,835,469
$94,160,582
Coupon Quantity
127,630,435
126,484,119
$0.73
$ per Coupon
SNAP
SNAP Dollars
WIC
WIC Dollars
WIC Transactions
WIC $ per Transaction
FY 2009
FY 2010
DeCA Business Drivers • 
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Promo7ons via Display (Presented to DeCA Headquarters) •  Manager Specials: Category leaders, high volume items, deep discounts, mandated display, administered via automated VCM at Headquarters •  Power Buy Display: High volume items, excellent prices, mandated quan::es and display •  One Time Buys/Shippers: Highly consumable, impulse items Sidewalk/Case Lot Sales: Special events selling to patrons in case increments Dollar Days: Dollar price points and dollar mul:ples on brand name food items Coupons: On-­‐shelf manufacturer coupons, FSI coupons & Internet coupons all accepted In-­‐store Demos: Very effec:ve and cost efficient Adver7sing: Several effec:ve Military specific vehicles available Bremerton NS
Bangor ANSB
Ft Lewis
Whidbey Island NAS
Smokey Point
McChord AFB
SuperValu
WA Tacoma
Coastal Pacific
Fife
Fairchild AFB
Malmstrom AFB
OR MT ID ND ME Minot AFB
SuperValu
Billings
Bangor ANGB
Grand Forks AFB
MN SuperValu
SD Bismarck
Mountain Home AFB
CA Coastal Pacific
Stockton
Beale AFB
McClellan AFB
Travis AFB
Moffett Field
WY F.E. Warren AFB
Fallon NAS
NV Ord Community
Hill AFB
Lemoore NAS
China Lake NAWS
Fort Hunter Liggett
Nellis AFB
Vandenburg AFB
Edwards AFB
FT Irwin
Port Hueneme
March AFB
Los Angeles AFB
Barstow MCLB
Camp Pendleton
Coastal Pacific
Ontario
North Island
Dugway PG
San Diego NS
Yuma PG
CO Buckley AFB
USAF Academy
Peterson AFB
AZ Luke AFB
Yuma MCAS
El Centro NAF
Davis-Monthan AFB
Fort Huachuca
Kirtland AFB
NM MDV
Junction City
MO Whiteman AFB
OK White Sands MR
Tinker AFB
Ft Sill
Altus AFB
TX MDV
Oklahoma
Goodfellow AFB
Laughlin AFB
Fort Worth
Always
Ft HoodFresh
Randolph AFB
Lackland AFB
Ft Sam Houston
MDV
San Antonio
AR MS Barksdale AFB
Ft Polk
Arnold AFS
AL SuperValu
Indianola
Gulfport NCBC
Keesler AFB
TN McGuire AFB
MDV
Norfolk
NC Camp Lejeune
Ft Bragg
North & South New River MCAS
Ft Jackson
Camp Merrill
Ft Rucker
Pensacola NAS
Hurlburt Field Kingsville NAS
GA Ft Benning
Albany MCLB
Charleston AFB
Charleston NWS
Parris Island
Ft Stewart
Hunter AAF
Moody AFB
Whiting Field NAS
Eglin AFB
Tyndall AFB
New Orleans NAS
Shaw AFB
SC Ft Gordon
Robins AFB
Columbus
Corpus Christi NAS
MDV NF
Pensacola
SuperValu
Quincy
Kings Bay NSB
Jacksonville NAS
Mayport NS
FL Patrick AFB
MacDill AFB
Key West NAS
6/1/16
Newport NS
New London
Mitchel Field
Fort Hamilton
MDV NF Bloomington
Gunter AFB
Maxwell AFB
Meridian NAS
NJ Hanscom AFB
RI MDV
Landover
SuperValu
Ft McPherson
Anniston MDV
Columbus AFB
CT Portsmouth NSY
Aberdeen
Lakehurst NAES
MD Ft Meade
Ft Detrick
DE Dover AFB
Annapolis
Wright Patterson AFB
Forest Glen
Andrews AFB
Bolling AFB
Ft Myer
Patuxent River NAS
IN Sugar Grove
Ft Belvoir
Ft Eustis
Quantico
Norfolk
Dahlgren NS
Crane NSWC
WV WC Little Creek NAB
Ft Lee
Langley AFB
Oceana NAS
Portsmouth NNSY
Ft Knox
Seymour Johnson AFB
KY VA Cherry Point MCAS
Ft Campbell
Redstone Arsenal
Little Rock AFB
LA OH Memphis NSA
Sheppard AFB
Dyess AFB
Scott AFB
Ft Leonard Wood
Vance AFB
Holloman AFB
McConnell AFB
Cannon AFB
Fort Bliss
VA IL PA C.E. Kelly
Carlisle Barracks
NH MA West Point
Tobyhanna AD
Picatinny
Selfridge ANGB
SuperValu
Champaign
Rock Island
Harrison Village
Richards Gebaur
KS Great Lakes NTC
Ft Leavenworth
Ft Riley
Fort Carson
Twenty-nine Palms
Miramar MCAS
Imperial Beach
UT Offutt AFB
VT Saratoga Springs
MI IA NE Fort Drum
NY Ft McCoy
Ellsworth AFB
SuperValu
Lancaster
WI C&S
Wholesalers
DeCA Distributors SuperValu
Mechville
Military
Exchange
Market
A Closer Look
50 States
2 U.S. Territories
30 Foreign Countries
Exchange Sales Trends AAFES/MCX/CGX/NEX/VCS Billion $
16 14.04 14 12 10 8 6 4 2 0 9.7 10.2 10.8 11.3 11.7 12.1 11.9 12.3 14.05 12.97 13.01 12.98 11.4 Exchanges
AAFES, NEXCOM and Marine Corps Exchanges
•  Operate as Federal Instrumentalities - unique organizations within
the DoD
•  Self-funded, using few tax dollars
•  Exchanges pay their own operating costs from Revenues
•  Return earnings to Customers through payments to Morale,
Welfare and Recreation Activities and investments in new,
renovated exchange facilities
Coast Guard Exchanges
•  An MWR activity; Coast Guard is part of the Department of
Homeland Security
Veterans Canteens
•  Operates under the authority of the Department of Veterans Affairs
AAFES Profile
Established: 1895
Employees: 37,000
Headquarters:
3911 S. Walton Walker Blvd.
Dallas, TX 75236-1598
Phone: (214) 312-2001
Web site: www.aafes.com
Major Distribution Facilities:
Newport News, VA;
French Camp, CA; Waco, TX;
Giessen, Germany; Tokyo, Japan; Yokota,
Japan; Inchon, Korea; Okinawa, Japan;
Honolulu, Hawaii
FY 2014 Sales: $7.392.2 Billion
CEO:
Tom Shull
President-COO:
Mike Howard
Selected Operations and Services:
Retail Stores; On-line Shopping
Concessions; Catalog Services
Food Facilities; Gas and Auto Repair
Military Clothing Stores; Movie Theaters
Vending Centers, State Department Commissaries
AAFES Regions (5)
European Region
Main
Exchanges
England Italy Alaska Pacific Region
Main
Exchanges
Germany Greenland Eastern
Region
Main
Exchanges
Guam, Japan, S. Korea, Okinawa Hawaii Western Region
Main Exchanges
Central Region
Main
Exchanges
Puerto Rico NEXCOM Profile
Established: 1946
Employees: 15,000
Headquarters:
3280 Virginia Beach Blvd.
Virginia Beach, VA 23452
Phone: (757) 463-6200
Web site: www.navy-nex.com
Major Distribution Facilities:
Norfolk, VA; Chino, CA
Pensacola, FL; Naples, Italy
Honolulu, Hawaii; Yokosuka, Japan
FY 2014 Sales: $2.66 Billion
CEO:
Mr. Robert J. Bianchi
COO:
Michael Good, SES
Selected Operations and Services:
Retail Stores; Concessions
Food Facilities; Gas and Auto Repair
Authorized Uniform Stores
Vending Centers; Ship Stores
NEXCOM Districts (11)
European
District
Northwest
District
Northeast
District
Capitol
District
Western
District
Tidewater
District (HQ)
Japan
Guam
Hawaii
Hawaii
District
Cuba
Japan
District
Guam
District
Mid-South
District
Southeast
District
Puerto
Rico
MCX Profile
Established: 1897
Employees: 3543
Headquarters:
3044 Catlin Ave.
Quantico, VA 23134-5103
Phone: (703) 784-3800
Web site: www.usmc-mccs.org
Major Distribution Facilities:
None
FY 2014 Sales: $898.9
Director:
Ms. Cindy Whitman Lacy
Deputy Director Business Operations:
Ms. Jennifer Ide
Selected Operations and Services:
Retail Stores; Concessions
Vending Centers; Gas and Auto Repair
Food and Hospitality Facilities
MWR Programs
Marine Corps Exchanges (MCX) are a part of
the Marine Corps Community Services (MCCS)
on the Marine Corps bases.
MCX Facilities (17)
Henderson Hall
Quantico (MCX HQ)
Camp Allen
Barstow
Twentynine Palms
Camp Pendleton
Miramar
& MCRD San Diego Yuma
Beaufort
Parris Island
Albany
Hawaii
Japan
Iwakuni
Kaneohe
Bay
Cherry Point
Camp Lejeune
CGES Profile
Established: 1945
Commander:
Employees: 1,600
Captain Robert Whitehouse
Headquarters:
Battlefield Technology Center 1
510 Independence Pkw. Ste 500
Chesapeake, VA 23320
Phone: (757) 8424901
Lodges 26
Food & Beverage 24
Golf Courses 2
Fitness Facilities 33
FY 2014 Sales: $158.2 Million
Chief Operating Officer:
John Reiley
Director of Merchandise
Beverly Hudgins
Selected Operations and Services:
Retail Stores
Gas Stations
MWR Programs
Food Operations (franchised)
Vending Centers
Kodiak
CGES High-Volume
Exchanges
Port
KetchikanAngeles
North
Coast,
Cleveland
Astoria
Seattle
South
Portland
North Bend
New London
Cod
Staten Cape
Island
Humbolt Bay
Petaluma
Baltimore
Yorktown
Cape May
Portsmouth
♠
Alameda
Elizabeth City
Charleston
San Pedro
Mobile (2)
Honolulu
Galveston
New Orleans
St. Petersburg
Mayport
Clearwater
Miami
Hawaii
Puerto Rico
Borinque
San Juan
VCS Profile
n 
n 
Central Buying Office
Core Customers:
q 
q 
q 
n 
n 
Patients (including relatives and friends)
Staff and Medical workers
Volunteers
Average Retail Store size: 1,500-1,800 sq.
ft.
Approved items are placed in VCS’
Automated Merchandise Catalog (AMC).
Items on AMC are available to each
canteen for ordering merchandise.
VCS Profile
Established: 1946
Employees: 3,100
Headquarters:
#1 Jefferson Barracks Road
Building #25
St. Louis, MO 63125-4194
Phone: (314) 894-1200
Web site: www.vcscanteen.com
Major Distribution Facilities:
None
FY 2014 Sales: $413.4 Million
Director:
Mr. Ray Tober, SES
COO:
Mr. Jim Leahy, SES
Chief Merchandising Officer
Mr. Carey Filer
Selected Operations and Services:
Retail Stores, Food Operations (Cafeterias)
Personalized Services, Vending
Exchanges - Main Stores
CONUS
OCONUS
TOTAL
AAFES
98
23
121
NEXCOM
68
32
100
MCX
15
2
17
VCS
189
4
193
CGES
59
5
64
Total
429
66
495
NOTE: Resale systems combined operate thousands of retail operations including Main Stores, Shoppettes,
Troop Stores, Package Stores, Sport Shops, Lawn and Garden, Fast Food, Military Clothing Stores, Gas
Stations, etc.
Exchange Sales Ranking vs.
America’s Top Retailers
Top 200
WalMart
CVS
Costco
1
14
6
Home Depot
10
Target
11
Dollar Tree
Source: NRF online
2012
Global Sales
Ranking
144
Lowe’s
21
Best Buy
20
Sears
22
Kohls
49
Exchange
105
Exchange Resale Systems
Business Drivers
•  Pricing equal to or lower than best
customer
•  Voluntary Price Reduction (VPR)
•  Favorable payment terms
Marketing funds for:
ü In-store demos
ü Premiums, give-a-ways
ü Truckload and parking lot sales
ü Contests, sweepstakes
ü Clerk training
ü Scholarships
continued . . .
Exchange Resale Systems
Business Drivers
•  Advertising funds for:
–  Weekly tabloids, In-store flyers
–  Special programs
•  Prepaid freight
•  Warehouse allowances
•  Business Processes
–  Vendor Managed Inventory (VMI)
–  Pre-ticketing for certain kinds of
merchandise
Ship Stores Profile
Established: 1909
Headquarters:
3280 Virginia Beach Blvd.
Virginia Beach, VA 23452
Phone: (757) 463-6200
Web site: www.navy-nex.com
Major Distribution Facility:
Yokosuka, Japan
130 Ships Globally
FY 2014 Sales: $63.8 Million130 Ships-3
Stores ashore
CEO
Robert J. Bianchi
Vic President, Ship Stores Program:
Charlie Vaughn
Selected Operations and Services:
Retail Stores; Vending Machines
Laundries; Barber Shops
What Makes Ship Stores Unique?
•  Investment in inventory is
constrained
–  limited storage and display
space
•  Assortments reduced to best
selling SKU’s
•  Majority of sales occur while
deployed
•  Captive market when at sea
•  Store hours restricted while in
port or repair yards
•  Requires 24-72 hour
turnaround for deliveries
MWR/ Services
MWR, GSA, Department of State
MWR Operations
Morale, Welfare and Recreation
MWR
MWR is a term given to a complete range of community support, quality
of life programs, services, and activities that are provided to members of
the Armed Forces and their families on military installations throughout
the world.
Operations
•  Each of the military services
operates MWR activities
•  Each military service has its own
MWR organization, and while
they manage similar activities,
each does so in its own manner
within the broad policy mandates
of DoD
•  Operations are generally
decentralized, but there is
growing trend toward regional
operations in Army & Navy.
Program Funding
•  MWR operations are funded with
a combination of tax payer funds
(appropriated) and self generated
funds (non-appropriated)
referred to as “APF” and “NAF”
respectively
•  NAF is generated through the
sale of goods and services by
both MWR operations and the
Exchanges (dividends)
Programs Categories
Categories
“A”
Title
Mission Essential
Funds
100% APF
Program Examples
Fitness Center, Intramural
Sports, Libraries,
Rec. Centers
“B”
Community Support
35% NAF
65% APF
Youth Program,
Child Dev. Center
Outdoor Rec., Rec. Pool
“C”
Business Operations
100% NAF*
Category may determine type of contracting procedures utilized
q 
APF: Defense Federal Acquisition Regulations Supplemental
q 
NAF: DoD and Service Specific Regulations **
n 
DoD Directive 4105.67
n 
DoD Instruction 4105.71
Source: DMDC
Clubs, Golf,Bowling,
Retail Stores, Snack Bars
Restaurants, Lodging,
Marinas
*With some limited exceptions
** www.defenselink.mil
MWR’s Most Frequented
Facilities
Air Force
Army
Fitness Facilities
Libraries
Outdoor Rec.
Clubs and
Entertainment
Fitness Facilities
Gyms/fields
Bowling
Libraries
ITT
Navy
Marines
Fitness Facilities
ITT
Fast Food Venues
Outdoor Rec.
Gyms
Fitness Facilities
ITT
Fast Food Venues
Outdoor Rec.
Gyms
The Military Market Facts Presentation
has been brought to you by the
American Logistics Association.
Advocates for Military Total Quality of Life
www.ala-national.org
American Logis:cs Associa:on