New Commissary Chief Eyes Store Improvements, Expansion of Delivery Services

Since Defense Secretary Lloyd Austin announced last year that commissaries would provide up to 25% total savings compared with area grocery stores, patronage has jumped by as much as 18% among young enlisted personnel and junior officers.

John Hall, the new director of the Defense Commissary Agency, or DeCA, sees this broader use of the benefit as key to improving stores and making programs like curbside pickup and delivery services better and more widely available.

Hall, who took over as commissary chief in June, said in an interview Friday with Military.com that the agency must increase sales to deliver more savings but also to finance infrastructure improvements that will, in turn, help create demand.

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"It's a great cycle, a self-generating benefit for DeCA. The more our sales increase, the more we can lower our prices," Hall said. "At the same time, it gives DeCA the ability to solve its infrastructure problems."

In fiscal 2022, commissaries racked up $4.2 billion in sales across 64 million transactions, up from $4 billion the previous year across 62 million purchases. Hall said he expects to top $4.7 billion in sales this year, but needs to address some of the system's shortcomings.

The commissaries receive nearly $1.2 billion a year in funding from the Department of Defense, and they charge a 5% surcharge to customers to cover the construction, equipment and maintenance of stores.

Boosting sales to increase the amount of surcharge revenue would go far in tackling one of Hall's top priorities: addressing infrastructure issues. According to Hall, numerous stores across the agency desperately need upgrades to heating and air conditioning systems and refrigerators.

For example, a few weeks ago in Twentynine Palms, California, the store's air conditioner broke in 105-degree weather. DeCA authorized the store to close, but employees decided they would stay open, taking frequent breaks, hydrating and "continuing to serve the patriots of Twentynine Palms."

In Guam, another warm locale, employees rallied following a major typhoon that wiped out electricity and services on the island, working to get the stores open to customers "as soon as humanly possible."

Increasing surcharge revenue would help DeCA boost stores' viability without needing to ask for more money from Congress, Hall said. It also would allow the agency to put the money to better use.

"Refrigeration units, cooling units, we see frequent breakdowns ... We've got to get those replaced. We're just spending too much money on those items," he said.

The online ordering system must also be more user-friendly, according to Hall.

Currently, Click2Go is the program that allows customers to order online and pick up their groceries curbside. And at eight locations, it is the portal for home delivery.

The website is cumbersome, however, and needs to be upgraded. Fixing the online system also is key to expanding delivery to more installations and locations. With the commissaries doing just about 1% of sales online and the industry average being 10%, DeCA really needs to greatly grow that capability, Hall said.

Finally, he added, DeCA needs to do a better job communicating with patrons. Shopping eligibility greatly expanded in 2020 to include 4.1 million disabled veterans but, according to DeCA's senior enlisted adviser, Marine Sgt. Major Michael Saucedo, most don't know they are eligible.

During the Veterans of Foreign Wars conference in Phoenix last month, Saucedo said 99% didn't.

"Any veteran with any level percentage of service-connected disability -- it can be a 0%, 5%, it doesn't matter -- if you have a service-connected disability rating, they now have access to the commissary benefit for the rest of their life," Saucedo said.

The agency is working with the DoD and the Department of Veterans Affairs to ensure that these eligible veterans have a Veteran Health Identification Card that they can take to an installation's visitors center to get access to the base -- a major hurdle for many disabled veterans seeking to shop in the stores.

"The greatest potential is to reach patrons who are currently not using the commissary so we continue to up our savings, and that will help us to increase sales," Hall said.

This fiscal year to date, just 2.1% of the $3.4 billion in sales and 1.7% of nearly 52 million transactions at commissary stores have been from disabled veterans. Active-duty personnel and their families continue to be the highest users of commissaries, accounting for half of the transactions and 40% of sales. Military retirees and their eligible family members spent the most of any group, making up more than $1.4 billion, or 43%, of sales, in 32% of the transactions.

Hall, who previously served as assistant deputy chief of staff G4 for the Army and was detailed in 2021 to the Department of Health and Human Services as part of the COVID-19 Countermeasures Acceleration Group, said his predecessor at DeCA, Bill Moore, who retired this year, developed a strategic plan that enabled the commissaries to improve supply chain efficiencies, getting products to shelves at lower costs.

If DeCA continues that effort, Hall said, while spreading the word about improved quality, longer hours and significant savings, and adding new features, such as counters for prepared meals similar to Wegmans or Publix, customers will return again and again.

"This is all about the customer. Customer walks into a commissary and they're looking for a certain product and they want that product, and it's our responsibility to ensure that," Hall said.

– Patricia Kime can be reached at Patricia.Kime@Military.com.

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