A widespread commissary pricing change has taken effect and has shown very little savings for military shoppers. However, some items ae expected to become more expensive due to greater price flexibility and the extra cash may not go where customers expect.
Some of the price cuts come from cheaper deals with manufactures, but others come from the Defense Commissary Agency using new rules approved by Congress. The new rules allow stores to align prices better with the outside-the-gate competition. If an item is much lower priced than the regional price average, it could go up to help bring down the price of another item.
Generating Margins
For the first time in the history of DeCA, margins are being generated. However, these are not profits, as the extra money is being used to reduce the taxpayer amount needed to operate stores. It takes about $1.3 billion a year in tax dollars to run the military commissary stores, which allows goods to be sold at cost plot a 5% surcharge used to renovate and build the stores. New rules allow for higher prices and will help to benefit the store seven more.
Two Pricing Changes
Two different pricing changes are being rolled out with the first including 10 commissaries. These commissars are adjusting the price of 1,000 items to be closer to those of the area competition. However, no product can go up more than 10% in price.
The second pricing change effects 238 stores, which will adjust pries on specific categories of items to help pay operating costs. This also includes negotiating better terms with manufacturers.
However, not all savings are passed on to the customer. If a price goes down by a dime from the manufacturer, it may not go down by a dime in the commissary. Instead, that dime could go towards reducing the cost of another item.
There are unofficial reports from some familiar with the program that believe the company in charge of the pricing program may benefit too much from the arrangement. Boston consulting Group is in charge and some say they will get as much as 50 to 60^ of the amount the price is reduced, but this has not been confirmed.
In addition, pressure put on manufacturers and distributors could lead to more special deals and scholarship donations. It could also mean some brands won’t be sold at commissaries any longer.
