DoD officials consider drastic measures as commissary shortages hit critical levels

Karen Jowers

November 4, 2020

A customer at the McGuire Commissary at Joint Base McGuire-Dix-Lakehurst, N.J., pictured here, complains about the empty shelves at the store. (DeCA photo: John Zoubra)

Increasing shortages of groceries have ramped up commissary officials’ pleas to industry to help them supply commissary shelves, and caused officials high-level Pentagon officials to consider implementing the Defense Production Act for grocery production.

It would be the first time the act has been invoked for commissaries. The problems are wide ranging, affecting many categories, such as canned goods and frozen goods — not just sanitizing products. Concerns started in the summer and early fall, and are related to various issues around the pandemic, including reduced production.

The Defense Production Act authorizes the president to require industry to give preferential treatment to national defense programs, in order to meet current national defense and emergency preparedness program requirements.

But this would be uncharted territory, said Steve Rossetti, president of the American Logistics Association, an organization of manufacturers and distributors selling products to commissaries and exchanges. “The existing regulations say that commercial items are not covered under the guidance, but then again, these are unusual times,” Rossetti said. “In March, the Pentagon designated commissaries as ‘mission critical’ and said that extraordinary measures need to be taken to keep the stores open and products flowing.”

Rossetti said the ramped-up effort involving the Defense Production Act is being discussed and coordinated with several Pentagon offices.

DoD officials did not immediately comment on whether they were considering invoking this law to remedy the shortages.

Defense and commissary officials are pursuing various options; Rossetti described it as a “full-court press to get commissary shelves filled.” A Nov. 10 meeting is scheduled between commissary officials and industry representatives to discuss the issues and options for addressing the empty shelves, Rossetti said. In addition, commissary officials have scheduled “listening sessions” with major manufacturers, he said, to strengthen partnership with industry. The Defense Commissary Agency’s new director, Bill Moore, and other high-level commissary officials will be involved in the sessions.

The out-of-stock rate is “much higher than normal” in stateside commissaries, said Moore, Oct. 20, during an ALA conference. “We need to figure out how to resolve that sooner rather than later,” he said. The issue was brought up by numerous commissary and exchange officials during the conference.

Berry Patrick, who works in the DoD Office of Morale, Welfare and Recreation and Nonappropriated Fund Policy, also urged industry to help the military stores beef up their pipeline, particularly the allocations of products. He praised industry for working with military store officials to get products in the stores as the pandemic unfolded.

“You were doing such a good job helping keep us supplied… we had dozens of phone calls from companies asking to get products from us,” he said, during the conference.

“We had to hold the line on that.”

‘A waste of time’ to shop

In some places, the empty shelves are driving customers away. A shopper at McGuire Commissary at Joint Base McGuire-Dix-Lakehurst, N.J., said she’s so frustrated with the empty shelves there that she doesn’t know if she’ll try shopping there again.

“As it stands now, it’s a waste of time,” she said. The problem has persisted for months, she said, whether her visits are on pay day, before pay day, different days of the week and different times.

The shelves were well-stocked with paper towels, toilet paper, baby items and personal care items the last time she shopped, but from there, the selections went downhill.

“Meat seemed to be stocked adequately but not as well as before. Yet sugar, spices, jarred pasta sauce, canned vegetables, frozen veggies, prepackaged lunch meat, bacon, sausage, paper plates, dish soap…. the list goes on… the shelves were bare,” she said.

But it does vary. The shopper said she’s contacted friends who shop at other installations who are not having the same problems. And a retiree who shops each week at the Fort Belvoir, Va., commissary said he normally goes with a list and for the most part, finds what he’s looking for. Some of the exceptions he noted are turkey cutlets, Presto products, and spices that sell out quickly.

Overseas stores first

From the beginning of the pandemic, Defense Commissary Agency leaders prioritized shipments for overseas stores in Europe and the Pacific because of the limited options some of those customers have outside the gate, and in many cases, customers weren’t able to shop outside the gate. As products become available, the first priority is those overseas commissaries. The agency also arranged for multiple emergency air shipments as required. Commissary officials have also worked with suppliers within the overseas theaters to buy products offshore to supplement critical items that may not be available from the U.S., said commissary agency spokesman Kevin Robinson. “As a result, DeCA’s overseas central distribution centers and meat processing plant have sustained outstanding in-stock rates throughout the pandemic,” he said.

That’s left stateside stores short. According to ALA’s Rossetti, the pipeline for some overseas commissaries is 55 days, “forcing distributors to fill overseas orders and leaving little, if any, product for stateside stores.”

Robinson said DeCA leadership is working with industry to to try to get as much of available product as possible, to include working on one-time buys and alternate items to help supplement regularly stocked items that may not be available.

Are commissaries not getting their fair share?

But commissary officials are seeing indications that commissaries may not be getting their fair share of products, compared to stores outside the gate, said Chris Burns, DeCA’s executive director of sales, marketing and logistics, during the ALA conference.

He said he’s starting to see industry data that indicates some brands and categories are growing in stores outside the gate, but not in commissaries and other stores in the military channel of business, and allocations of products are moving forward to other retail companies.

“We want to be treated as the number one retailer in your company and we need that message to get up to your CEOs,” he told the industry representatives.

“If you say that the military channel is just another channel, then I would ask, is the military patron just another patron?” He urged industry representatives to talk to their company leaders about the military lifestyle and the sacrifices service members and their families make, and why commissaries exist.

“We have a statutory requirement to provide savings, whether in the exchange or commissary, as a benefit, and we shouldn’t have to force them to go outside the military installation” because the products are not on the shelves, Burns said.

Military Times asked the Consumer Brands Association about concerns that the industry isn’t providing a fair share of products to military stores.

“With COVID cases spiking around the country, winter on its way and uncertainty around the election, purchasing patterns have stabilized, but are far from normal,” said Tom Madreki, vice president of supply chain and logistics for the association. “While some segments are steadying, others— like cleaning and even more specifically, disinfecting products — continue to see record demand.

“The industry is working around the clock to manufacture products and [is working] with its retail and distribution partners and [Defense Commissary Agency] leadership to get them in stores and on the shelves around the country,” he said, in an email response.

In some cases, manufacturers’ production rates on certain products are running at about 40 to 60 percent of what they were producing before the pandemic, said Tom Gordy, president of the Armed Forces Marketing Council, an organization of firms representing over 400 manufacturers who supply consumer products to military resale activities worldwide. “There’s extreme competition” for products, he said, and some of the largest retailers outside the gate are getting the larger allocations.

All retailers are going to manufacturers asking for higher allocations of products, Gordy said. “It’s just a fierce environment right now.”

There are many factors affecting grocery stores and manufacturers in general, said Rossetti and Gordy, such as more demand as more people are eating at home during the pandemic; a nationwide shortage of truck drivers that started long before the pandemic; a nationwide shortage of aluminum; effects of COVID on manufacturers’ work forces.

And the military channel is affected in different ways, as the number of customers increases and decreases as some bases have limited access to retirees and curtailed their commissary shopping.

Between the manufacturer and the shelf there are many possible “points of failure” for that product, Gordy said, such as:

*the store not getting as much of a product as they ordered, or not getting the product at all.

*backlogs on the part of the distributor causing delays in getting the product to the store.

*stores ordering the wrong products, to include items that have are no longer being manufactured. Some companies have simply stopped producing certain products to focus on other products in higher demand.

*the product just doesn’t get ordered.

*problems in getting the product on the shelf when it gets to the store. The commissary staff has to sort products in the back of the store. From there, contracted vendor stockers put it on the shelves.

“Pentagon Budget Proposal to Slash Subsidies to DECA Commissaries”

Grocery stores for military families, also called commissaries, will be able to offer fewer savings over the next three years as the Department of Defense would slash most of the taxpayer subsidies that prop up these stores, according to the plan released Monday.

“DoD seeks plan to shut all U.S. commissaries”

Defense officials have reportedly asked the Defense Commissary Agency to develop a plan to close all U.S. commissaries — about three-fourths of its stores, according to a resale community source familiar with details of a meeting with representatives of the Joint Staff and Pentagon comptroller’s office.

“Lobbyists oppose commissary proposal”

As congressional inaction on the debt crisis deepens the threat of indiscriminate axe-wielding on defense programs next January, advocates for base grocery stores hope to hang a “hands off” sign on military commissaries and their $1.3 billion annual appropriation.

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