The Commissary Catch-22

Commissary Conflicts

Commissaries were established with the intention of offering goods to military families at cost, with the added benefit of convenient locations. The aim was for the service branches to support their personnel by providing access to affordable products that could help supplement their military pay. Additionally, the commissary system was designed to minimize the burden on taxpayers, ensuring that the cost of goods provided to military families would not be excessively high.

Commissaries, which have been in operation for over 150 years, offer discounted goods to eligible military personnel and their families. Eligible shoppers include active-duty military, reserves and guards, retirees, overseas DoD civilians, and designated personnel. They can purchase at-cost products without leaving their station, providing a convenient and cost-saving shopping option. The commissary system was established in 1867 by the Army and later adopted by the Navy and Marine Corps in 1909 and 1910, and finally by the Air Force in 1947 and 1948.

Commissaries, designed to provide military families with goods at cost, continue to face challenges in balancing their original mission with the need to generate profits. The aim is to maintain their purpose of offering home goods and groceries at a reduced cost for military personnel without adding an extra burden on taxpayers. However, the need to remain financially sustainable requires the commissaries to generate profits, which can then be used for renovations and other needs. Despite having a small profit margin compared to the savings offered to shoppers, the ability to generate profits helps to ensure the longevity of the commissary system.

The US government oversees commissaries through auditors who evaluate the commissary’s savings in comparison to the target global savings rate of 23.7%. In recent years, commissary savings have fallen short of this goal. The auditors have noted that changes adopted by the DoD in 2017 to the commissary agency have impacted consumer savings. Prior to these changes, commissaries were required by law to impose a 5% surcharge on top of the cost of products, which helped cover the cost of store maintenance. In 2012, the commissary system received nearly $1.7 billion from taxpayers, compared to an average of $1.2 billion in previous years. The 5% surcharge paid by customers was used primarily for building and remodeling stores. The goal now is to generate a profit so that more funds can be allocated to building and remodeling efforts, which have declined in recent years.

In 2021, the average savings rate was calculated at 22.5%, falling short of the global goal of 23.7%. The overseas commissaries played a significant role in achieving this percentage, with a savings rate of 22.5%, while the US-based commissaries had a lower savings rate of 17.7%. Despite the rising prices of groceries, gas, and other essentials, the original mission of the commissaries to provide cost savings and relief for military families remains more important than ever. However, the challenge faced by the commissaries is the need to make a profit while still providing the cost savings to military families, as the pursuit of profits may put more burden on them and go against the original intention of providing savings.

Goods From China

There have also been debates over the type of products sold in commissaries. Some politicians argue that selling goods from China is unethical for the US, as it supports slave labor and a communist regime, which goes against our country’s values. The dilemma becomes more pronounced when these goods are offered to military families and retirees to save them money. The irony is that the people who protect the country’s rights and freedoms are receiving discounted goods made in conditions that the US does not condone.

On the other hand, removing products made in China from the shelves would not solve the problem. Banning all goods from China would not be practical or effective for military commissaries or exchanges, as many products sold in the US, including those in the military, come from China due to their affordability. The low cost of these goods allows for a lower markup and significant savings for customers, which is especially important for the commissary and military exchanges that aim to provide goods at cost. Additionally, the use of Chinese-made goods is crucial in areas where supply chains have been disrupted and local exchanges struggle to stock their shelves. Further restrictions on what they can offer would only exacerbate the issue.

Proposed changes aim to make exchanges and commissaries purchase goods from the US or approved countries, reducing dependence on products originating from China. Courtney Williams, a spokeswoman for the Navy Exchange Service Command, supports the policy, but acknowledges that there may not always be alternative options available. In some cases, all options for a product may come from China. The ban on China-associated goods could result in the complete removal of some products from exchanges and commissaries. Williams previously warned exchange shoppers to buy gifts early during the holiday season due to shortages in raw materials and supply chain issues.

The concept of sourcing ethically produced and sourced products is not new. Commissaries aim to source products that are assembled in factories that pay workers a fair wage and use quality materials. However, the challenge arises when these products are too costly to be sold at cost by the commissaries, which can often be the case for ethically made and sourced goods.

The Challenges Ahead

Commissaries will face significant challenges in the future. Balancing the selection of products to sell and maintaining their commitment to provide savings to military members will not be easy. However, their priority remains to fulfill their original purpose and serve those who deserve it. The challenge is to strike a balance and avoid creating a paradoxical situation.