'Customer-First' Credo Rings Up Success, Commissary Chief Says
By Gerry J. Gilmore
American Forces Press Service
WASHINGTON, Feb. 16, 2001 Things are looking up for DoD's grocery chain as efforts to please customers and restructuring initiatives appear to be bearing fruit.
In fact, the Defense Commissary Agency sold more than $5 billion worth of fruit, vegetables, meat, dairy products and other items last year, the most in sales since 1997, DeCA officials said.
That good news, combined with the implementation of an aggressive revitalization program, pleases Air Force Maj. Gen. Robert J. Courter Jr., DeCA's director since December 1999. He credits his organization's success to providing value to customers while reducing operating costs.
"Customers tell us they appreciate the money they save by shopping at our commissaries, and we're listening," Courter said. "Our 'Best Value' item program provides prices lower than what you can find downtown on either national brands or private labels, and our produce quality has greatly improved."
Courter said DeCA is striving to increase savings to customers and harness new technology to improve store operations. With better access to commercial grocery item sales and pricing data, for example, DeCA buyers can zero- in on the best deals for commissary shoppers. Courter noted that customer service is improving as commissaries automate how they replenish their shelves.
For years, he said, commissary managers walked the aisles, checked the backrooms and made an educated estimate of what they needed to order. Now DeCA is linking its cash register system to its inventory ordering system, so commissaries can make their replenishment orders based on what is actually sold.
"We're moving to reduce costs, streamline operations, increase service and arrange the most efficient hours of operation for our customers," he noted.
Price comparisons report significant customer savings -- last surveyed at 27 percent overall for most private-sector grocers -- at DeCA's 287-store worldwide chain, officials said. This can translate into more than $2,000 in annual savings for a family of four. Courter added that preliminary figures now show customer savings are closing in on DeCA's goal of 30 percent. A part of non-pay military compensation, commissaries sell items to service members and other authorized patrons at cost plus a 5 percent surcharge.
The surcharge is supposed to pay to build new commissaries and renovate existing ones, DeCA officials said. That's not what Courter found when he came on board over a year ago.
"We had funded some operational expenses out of the 5 percent surcharge," he said. "As a result, there was not enough money available to consistently keep the stores in good condition. No one wants to shop at a dilapidated store."
Working with Congress and senior DoD officials, "we shifted all the operational costs to the appropriated fund side of the ledger," Courter said. This, he noted, more than doubled the money available for store upgrades. At the same time, the change puts DeCA on the spot to reduce its costs while increasing value to its customers.
"We needed to apply modern business management principles throughout our operation," Courter said. The agency followed the lead of commercial grocers. He reasoned sound business practices would provide the path to efficiency and savings that could be passed back to DeCA's customers.
Courter ordered a top-to-bottom cost and performance review when he arrived at DeCA and found some surprising expenses. "There was one store with abnormally high utility costs for its size and customer base," he said. Officials found the store was sharing space with another facility, but paying the utility bill for the entire building. Courter noted that DeCA's grocery experts developed detailed guidance on expected operating costs, which helps commissary managers worldwide identify and rein-in such outside-the-norm expenses.
Closing some under-performing stores -- normally smaller facilities with other commissaries nearby -- also will increase organizational efficiency, Courter said.
"However, across the system we will be improving our output to customers in terms of service and savings," he said. "In fact, we will expand stores at many locations and even open new stores at installations that will see changes in force structure and missions." Such measures, he added, are not taken without consulting the affected military service, the Commissary Operating Board - whose members represent each of the services - the DoD staff and the Congress.
Quality of life factors, such as the size of the active duty population, whether the commissary location is overseas or remote, and its proximity to civilian stores and other commissaries, are the first considerations in determining whether and where to continue, establish or close a DeCA commissary, Courter said.
Other criteria, he noted, such as operating costs per dollar of sales and an installation's long-term future and patron demographics are also considered in the process. As these conditions change, Courter said, DeCA must be flexible.
"We need to continually look at our distribution of store hours, consider requests to open new stores, close existing ones and reconfigure others," he said, "all the while keeping within the appropriated dollars we have to run the system."
The agency has increased sales while Courter keeps a keen focus on the primary customers -- young active-duty service members and their families. He said his prior experience as the commander of the Air Force's basic training wing at Lackland Air Force Base, Texas, taught him that many young service members didn't realize they could shop in the commissary.
"Often, these are the very beneficiaries who need the savings most," Courter said. Consequently, upon becoming DeCA's director, Courter said he worked with all of the military services to introduce new troops to the commissary benefit during their initial training.
"Our customers - active duty, retirees and reserve component members alike - want to shop in pleasant surroundings and in the shortest time possible, so we are improving the entire process," Courter said.
Improving customer service, he noted, is a constant DeCA goal. Courter said some stores have added the convenience of "grab-and-go" areas near their registers where hurried shoppers can quickly pick up certain items they may need. Other stores have been able to adjust their operating hours in response to customer demand, while focus groups that mirror the local customer base provide a steady stream of ideas for improvement at each commissary.
The commissary system is an important tool for both military recruiting and retention, Courter noted, adding that customers deserve the best service and facilities possible.
"I've asked our store directors and other key managers to commit and be accountable to make sure we fully stock the shelves, offer great produce, take care of store appearance, and keep in touch with our customers," he concluded.