the military market 2015 (fy 2014) - empower it, inc · 2015. 8. 26. · defense commissary agency...

1 Proprietary & Confidential 1

The Military Market 2015

(FY 2014)

2 Proprietary & Confidential

Overview

Military Resale Market

DeCA

Mission

Profile

Business Drivers

Exchanges

Profile

Business Drivers

Branches (AAFES, NEX, Marine Corps,

Veterans Canteen, and Coast Guard)

Mission

Profile

Photos: Courtesy of the ALA


The Military Resale Market



12.4 Million Authorized Patrons

$17.1 Billion in Retail Sales

DeCA - worldwide presence, regulated by Congress


Combined FY 2014 Sales = $17.12 Billion

Exchanges - $11.493 Billion; Commissaries - $5.625 Billion


0.44% 4.3%

5.5%

-6.8% -4.2%

*Exchange Sales - Includes Vets and Coast Guard $ Billions



Military Market

50 States

5 U.S. Territories

26 Foreign Countries

Source: ALA Military Market Facts


Military Patron Demographics

Military Demographics

8 Proprietary & Confidential Source: Wikipedia

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2014 Metro Markets by Population




2014 Total Armed Services Active Duty Personnel = 1.43 million

41,362 (2.9%)

322,900 (22.6%)

539,675 (37.8%)

198,415 (13.9%)

326,684 (22.8%)


2014 Demographics by Age Range

Source: Statisticbrain.com


Photo: Courtesy of the ALA

11 Proprietary & Confidential Source: Statisticbrain.com

A Thumbnail Sketch of Active Duty Personnel

• 91% are under the age of 40

• 70% of officers are married; 15% of officers are female

• 52% of enlisted are married; 14% of enlisted are women

• 73% of military children are under the age of 11

• 74.6% Caucasian; 17.8% African American; 7.6% other

Education

• 93% of enlisted personnel have a high school diploma

(compared to the general population of 87%)

• 90% of active duty personnel have a BA/BS degree or above



Defense Commissary Agency

(DeCA)

DeCA


Established: 1991

Employees: ≅ 15,000

Headquarters:

1300 E Avenue

Fort Lee, VA 23801-1800

Phone: (804)734-8253

Website: www.commissaries.com

Major Distribution Facilities:

ConUS - Civilian Distributor Network

Selected Operations and Services:

FY 2014 Sales: $5.625 Billion

Grocery

Produce

Meat

Dairy

Deli

Bakery

Overseas - DeCA Central Distribution Centers

Director and CEO:

Joseph Jeu

DeCA Profile

Rota Commissary, Spain

DeCA photo: Wally Raynes

The first commissary was established in 1825


DeCA’s Mission Statement: Deliver a vital benefit of the

military pay system that sells grocery items at cost, while

enhancing quality of life and readiness.

DeCA Mission

DeCA’s Vision:

Understand our customers and deliver a

21st century commissary benefit.

One Vision, One Team, One DeCA!

DeCA’s Goals:

• Provide service members and their

families with a quality benefit at

significant savings.

• Sustain a capable, diverse, and

engaged civilian workforce.

• Be a model organization through

agility and governance.


http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=1DTfiFX7rkXxAM&tbnid=_YvsQH9rdzoYmM:&ved=0CAUQjRw&url=http://www.commissaries.com/stores/html/store.cfm?dodaac%3DHQCNFV&ei=4vRPU-ACw7fIBJCIgrgG&bvm=bv.64764171,d.aWw&psig=AFQjCNHw4CffnhP5XBqbvNw2Q6kpaSX-aw&ust=1397835353912375

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=1DTfiFX7rkXxAM&tbnid=_YvsQH9rdzoYmM:&ved=0CAUQjRw&url=http://www.commissaries.com/stores/html/store.cfm?dodaac%3DHQCNFV&ei=4vRPU-ACw7fIBJCIgrgG&bvm=bv.64764171,d.aWw&psig=AFQjCNHw4CffnhP5XBqbvNw2Q6kpaSX-aw&ust=1397835353912375


Director & CEO (Joseph Jeu)

Deputy Director & COO (Michael Dowling)

Executive Director, Sales, Marketing & Policy (Rogers Campbell)

Executive Director, Store Operations (Keith Hagenbuch)

Director, Operations and Policy (Randy Chandler)

Director of Sales (Tracie Russ)

DeCA Organization

DeCA Profile

Jeu Dowling Campbell Hagenbuch Chandler Russ



$B

illio

ns

DeCA Profile

$5

.37

$5

.42

$5

.65

$5

.81

$5

.98

$5

.84

$5

.95

$6

.09

$5

.87

$5

.63

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

DeCA Sales

Represents actual DeCA worldwide sales Source: Defense Commissary Agency

2.5% 0.9%

4.2%

2.8%

2.9%

-2.3%

1.9%

# of

Stores 273 268 264 260 254 248 252

2.3%

247

-3.6%

245

Stores in ConUS = 178 Stores in OConUS = 67

-4.1%

245


76% of DeCA sales occur in the US

178 Stores

76%

ConUS

Sales of $4.25B

67 Stores

8%

Europe

Sales of $460M

16%

Pacific

Sales of $924M

Source: Information Resources, Inc.

DeCA Profile


Commissary Sales vs. America’s Top Food Retailers - 2014

DeCA Profile

(Includes Patron's Savings of 30%)

(Excludes Patron's Savings of 30%)

Kroger 93.59$ 1.6%

Safeway 37.53$ -3.7%

Publix 28.91$ 5.2%

Ahold USA 26.11$ 1.1%

H.E.B. 19.68$ 8.1%

Albertsons 19.45$ 432.7%

Delhaize America 18.81$ 0.1%

Meijer 16.62$ 5.3%

Wakefern/Shoprite 14.10$ 3.7%

Whole Foods Markets 12.49$ 10.3%

Aldi 10.89$ 8.5%

Bi-Lo 9.08$ 1.5%

Trader Joe's 8.35$ 6.4%

Hy-Vee Food Stores 7.62$ 3.6%

DeCA 7.31$ -4.2%

Wegmans Food Markets 6.99$ 6.1%

Giant Eagle 6.94$ 2.6%

A&P 5.83$ -6.8%

DeCA 5.62$ -4.3%

WinCo 5.21$ 5.7%

Save Mart 4.88$ 0.7%

Source: NRF (Top 100 retailers)


• Ideal market…where 100% of trade funds are passed on to the patron

• No co-op advertising or slotting fees


DeCA Profile


Families account for more than half of DeCA’s sales

6.7M 2.4M 1.4M 1.2M .7M


DeCA Profile


DeCA Shopper

TOTAL U.S.

A DeCA Shopper is more likely married with small children

Source: American Factfinder; Department of Defense

DeCA Profile


Today, DeCA captures about 31% of shoppers’ total wallet,

which has improved over the past year.

Pt. Chg. vs. YAGO

Military 1

Grocery -2

Walmart 1

Club 0

Drug 0

All Other 0


DeCA Profile


Shopping trips reflect “need states,” underlying motivations for visits, which we can see from basket compositions.


DeCA Profile


DeCA shoppers use commissaries for stock-up needs; Walmart wins special purpose trips; grocery wins quick trips.

Percent of Product Trips P52W Ended 02-28-2015

Quick Trip

26%

Special Purpose

14%

Stock-Up 43%

Quick Trip 43%

Fill- In

17%

17%

Stock-Up 14%

Stock-Up 12%

Fill-In 17% Fill-In

17%

Spec.

Special Purpose

26%

DeCA Walmart Grocery


Quick Trip 60%

Special Purpose

11%

DeCA Profile


Percent of Product Trips P52W Ended 02-28-2015

Quick Trip

27%

Special Purpose

14%

Stock-Up 43%

Quick Trip 43%

Fill- In

17%

17%

Stock- Up

14%

Stock- Up

12%

Fill-In 17%

%

Fill-In

17%

Spec.

Special Purpose

26%

DeCA Walmart Grocery


Quick Trip 60%

Special Purpose

11%

DeCA captures 72% of its dollar sales from stock-up trips, far more reliant on this trip than other channels.

DeCA Profile


Average dollars per trip at DeCA exceed other retailers’ by an average of +57%.


DeCA Profile


Top 10 Items DeCA Shoppers

Without Children

20 Source: Information Resources, Inc.

Top 10 Items DeCA Shoppers With Children

DeCA Profile


When not shopping DeCA, where do shoppers spend?

$8.2 Billion Dollars Leaked

AO 11% $0.9

Billion

Grocery

Club

39% 18%

$3.2 Billion $1.5 Billion

Walmart

32%

$2.6 Billion

Walmart captures nearly a third of all leakage.


DeCA Profile

29 Proprietary & Confidential Source: Supermarket News

DeCA Profile

Top 20 DeCA ConUS Categories Top 20 Civilian ConUS Categories

Rank Category $ Sales Rank Category $ Sales

1 Salted Snacks 99,062,126$ 1 Soft Drinks 10,262,048,580$

2 Coffee 84,729,774$ 2 Fresh Bakery 9,941,532,412$

3 Fresh Bakery 80,039,677$ 3 Salted Snacks 9,806,821,029$

4 Dog Food 70,077,123$ 4 RTE Cereal 4,836,881,537$

5 Soft Drinks 66,220,392$ 5 Candy 4,829,880,518$

6 RTE Cereal 65,732,760$ 6 Coffee 4,472,234,345$

7 Candy 62,959,666$ 7 Water 4,093,913,882$

8 Toilet Paper 62,280,823$ 8 SS Juices and Drinks 3,840,677,623$

9 SS Juices and Drinks 54,113,295$ 9 Crackers 3,520,296,862$

10 Laundry Detergent 47,230,174$ 10 SS Vegetables 3,234,809,024$

11 SS Vegetables 43,974,686$ 11 Cookies 3,113,539,800$

12 Crackers 43,136,937$ 12 Toilet Paper 3,108,288,027$

13 Vitamins and Supplements 39,771,513$ 13 New Age Beverages 3,036,102,094$

14 Water 39,005,189$ 14 Dog Food 2,915,376,742$

15 Cookies 38,839,916$ 15 Good for you Foods 2,675,039,930$

16 Oral Hygiene 37,875,506$ 16 Fresh Desserts 2,503,584,944$

17 Paper Towels 34,730,702$ 17 Laundry Detergent 2,156,371,394$

18 Wholesome Snacks 34,013,802$ 18 Wholesome Snacks 2,142,450,098$

19 New Age Beverages 32,484,496$ 19 Snack Cakes 2,113,553,891$

20 Shortening and Oils 30,881,148$ 20 Shortening and Oils 2,093,626,541$

2014 Sales by Category

Nonperishables/Semiperishables

30 Proprietary & Confidential Source: Supermarket News

DeCA Profile

Top 20 DeCA ConUS Categories Top 20 Civilian ConUS Categories

Rank Category $ Sales Rank Category $ Sales

1 Cheese 116,074,349$ 1 Milk 10,666,622,886$

2 Milk 87,947,399$ 2 Cheese 10,664,622,661$

3 Fresh Vegetables & Herbs 71,952,980$ 3 Fresh Vegetables & Herbs 7,862,051,878$

4 Frozen Entrees 67,639,844$ 4 Fresh Fruit 6,054,771,805$

5 Fresh Fruit 53,710,291$ 5 Yogurt 5,141,197,288$

6 Lunchmeat 49,014,124$ 6 Frozen Entrees 4,751,097,510$

7 Yogurt 44,413,935$ 7 Ice Cream 4,392,956,288$

8 Breakfast Meat 44,250,005$ 8 Refrigerated Juice Drinks 4,095,243,327$

9 Refrigerated Sausage 41,943,184$ 9 Lunchmeat 4,016,098,895$

10 Eggs 41,301,130$ 10 Eggs 3,951,084,413$

11 Refrigerated Juice Drinks 38,961,641$ 11 Breakfast Meat 2,972,812,434$

12 Frozen Seafood 36,308,639$ 12 Refrigerated Sausage 2,970,841,802$

13 Precut Fresh Salad Mix 27,586,131$ 13 Precut Fresh Salad Mix 2,961,137,652$

14 Frozen Vegetables 26,878,657$ 14 Frozen Pizza 2,610,363,846$

15 Frozen Pizza 26,850,037$ 15 Novelty 2,462,446,277$

16 Refrigerated Meals 25,109,558$ 16 Cream 2,411,098,096$

17 Ice Cream 22,459,578$ 17 Refrigerated Meals 2,174,129,475$

18 Cream 22,281,398$ 18 Frozen Vegetables 1,987,530,052$

19 Butter 21,402,919$ 19 Frozen Seafood 1,974,320,788$

20 Poultry Frozen 20,107,620$ 20 Fresh Meat 1,949,643,837$

Perishables

2014 Sales by Category


DeCA Fiscal 2014 Sales Statistics

Sales Comparison by Category ($ in thousands)

Category FY '14 FY '13 % Change

Grocery 4,641,097$ 4,895,981$ -5.20%

Meat 473,403$ 461,482$ 2.58%

Produce 510,499$ 518,674$ -1.57%

Total 5,624,999$ 5,876,137$ -4.27%

Sales Comparison by Area ($ in thousands)

Area Grocery Meat Produce Total

DeCA East 1,196,601$ 124,379$ 139,311$ 1,460,292$

DeCA Central 982,822$ 113,192$ 100,715$ 1,196,730$

DeCA West 1,319,918$ 131,693$ 131,741$ 1,583,354$

DeCA Pacific 748,690$ 74,505$ 101,343$ 924,540$

DeCA Europe 393,064$ 29,631$ 37,387$ 460,083$

Total 4,641,095$ 473,400$ 510,497$ 5,624,999$

Source: American Logistics Association

DeCA Profile


Top 20 Commissaries in Coupon Redemption 2014


DeCA Profile

Sales Rank Store Name Coupon $

Coupon Quantity

6 OCEANA NAS $1,719,473.20 1,753,887

1 FORT BELVOIR $1,705,779.85 1,796,710

3 SAN DIEGO NB $1,556,419.76 1,645,747

23 MACDILL AFB $1,403,031.40 1,451,554

4 FORT CAMPBELL $1,378,852.53 1,332,926

5 FORT MEADE $1,303,675.12 1,319,662

9 JACKSONVILLE NAS $1,265,936.45 1,325,208

14 LANGLEY AFB $1,261,007.36 1,325,077

29 SCOTT AFB $1,214,446.98 1,296,887

20 LITTLE CREEK $1,165,392.15 1,224,841

8 FORT BRAGG SOUTH $1,121,147.42 1,202,884

16 CAMP PENDLETON $1,112,715.16 1,173,393

15 QUANTICO MCB $1,031,773.31 1,097,894

17 MIRAMAR MCAS $1,028,013.04 1,087,627

13 FORT LEWIS $1,019,980.26 1,051,927

38 RANDOLPH AFB $1,010,326.27 1,018,241

18 MCCHORD AFB $991,747.46 1,030,783

42 PATRICK AFB $984,423.72 1,059,461

44 LUKE AFB $979,010.49 977,874

25 NELLIS AFB $924,973.43 958,250


Coupon Usage - Historical Comparisons

DeCA Profile


COUPONS FY 2010 FY 2011 FY 2012 FY 2013 FY 2014

Coupon Dollars $114,122,168 $112,703,419 $104,188,496 $91,005,779 $83,742,771

Coupon Quantity 129,353,453 123,027,684 113,297,927 99,600,729 89,160,971

$ per Coupon $0.88 $0.92 $0.92 $0.91 $0.94

% Change in Coupon $ vs. Prior FY 8% -1% -8% -13% -8%

% Change in Coupon # vs. Prior FY 4% -5% -8% -12% -10%

% Change in $ per Coupon vs. Prior FY 4% 4% -- -1% 3%


The Top 10 States - Commissary Sales FY ’14

DeCA Profile

Washington

$228,766,910

California

$539,451,294

Hawaii

$249,125,585 Texas

$318,062,945

Colorado

$151,575,620

N. Carolina

$240,608,656

Georgia

$234,267,203

Virginia

$554,840,049

Maryland

$208,103,858

Florida

$350,458,607



The Top 30 Stores Represent 33%

of Total Worldwide Dollar Sales FY ‘14


* Indicates more than 1,000,000 customer transactions

Ft Belvoir* $96,031,716 Camp Pendleton $58,764,591

Pearl Harbor* $89,454,294 Miramar MCAS $58,289,645

San Diego NB* $88,639,721 McChord AFB $57,990,146

Ft Campbell* $71,497,384 Andrews AFB $57,572,651

Ft Meade $69,560,907 Little Creek NAB $57,247,963

Oceana NAS $69,323,332 Ft Bliss $56,510,354

Schofield Barracks* $69,198,994 Ft Myer $54,703,383

Ft Bragg South* $67,980,893 MacDill AFB $53,550,939

Jacksonville NAS $65,516,902 Ft Carson $52,349,332

Ramstein AB* $65,106,692 Nellis AFB $52,243,552

Ft Benning $62,539,907 Travis AFB $51,701,359

Ft Bragg North $61,260,558 Hickam AFB $51,051,518

Ft Lewis $60,902,916 Kadena AB $50,991,553

Langley AFB $59,426,763 Scott AFB $50,597,933

Quantico MCB $58,783,439 Camp Lejeune MCB $50,269,759

DeCA Profile


DeCA’s Focus – 2015

Sales Growth and Opportunities


Maintain household counts and trips

Opportunity to improve in store experience

Fresh (produce, wellness) which will result in increased

purchases

DeCA demonstrated success in increasing basket size

over the past year

Increase of

0.7 Trips ($65/trip)

Increase of

$3/Trip (14.5 trips/year)


DeCA 2015 Sales Objectives


eCommerce

CLICK2GO

Future with EBS

Content Marketing

Digital Communications

Facebook

Sales flyer

38 Source: American Logistics Association

Sales Growth and Opportunities

Engaging the Empowered Shopper

39 Proprietary & Confidential 39

CLICK2GO Piloted in three locations

Fort Lee, Offutt AFB, Travis AFB

Average Basket Size

• CLICK2GO: $104.70

• Brick and Mortar: $62.60


Click2Go Pilot


The commissary is one of the most important tools you have for the health and well-being of the military in this country.

– Senator Barbara Mikulski

• HBI/Better for You

• Natural & Organic

• Healthier Eating

Strategy – 2015 Health & Wellness Initiatives


Healthy Base Initiative


Healthy Base Initiative



Establishing the Value Brand


• Quality brand names – store brand prices

• Response to continue demand for private

label/store brand products

• Approximately 450 items; spanning more than 55 categories

• Save: 20-25% versus retail private label/store brands

• Save: 40% against similar national brand items

• Value Brands featured in each promotional flyer


Rewards Card


Over 382,000 current users

Coupon Redemptions

grew 65% for FY14

New Age Technology

Users spend more money!

Average Basket $157

Among Loyalty Card Users


Sales Flyer – Content Marketing

Sales flyers posted for

each promotion on

webpage & Facebook

44 Source: American Logistics Association


DeCA Summary


Military Exchanges and

Ships Stores Market

Exchanges


•Self-funded, using few tax dollars.

•Pay their own operating costs from sales revenue. •Return earnings to customers through payments to

Morale, Welfare, and Recreation funds. The MWR

Fund supports quality of life programs which include the following on base: golf courses, aquatic and recreation centers, and child care centers.

AAFES, NEX, and Marine Exchanges operate as federal instrumentalities – unique organizations

within the Department of Defense

Coast Guard Exchanges

An MWR activity; Coast Guard is part of the Department

of Homeland Security

Veterans Canteens Operates under the authority of the Department

of Veterans Affairs

Exchanges Profile



Exchange Sales

$ Billions

$12.29 12.97 $13.03$11.99 $11.49

2010 2011 2012 2013 2014

* Includes Vets Canteen sales figures


Exchanges Profile

1.74% 5.53% .54%

-7.9% -4.2%


2014 Total Exchange Sales $11.49 Billion*

Navy $2.66 billion

AAFES $7.33 billion

Vets Canteen $443.78 million

Coast Guard $158.04 million

Marine Corps $898.84 million


Exchanges Profile

* Does not include concession sales


Exchange Sales vs. America’s Top 22 Retailers 2014

U.S. Sales

(Billions)

Source: NRF (Top 100 retailers)

Exchanges Profile

EXCHANGES RANK

22nd AMONG TOP RETAILERS!

Retailer % Change

vs. YAGO

1 Wal-Mart 334.30$ 1.7%

2 Costco 74.74$ 5.2%

3 Target 71.27$ -0.9%

4 The Home Depot 69.95$ 6.6%

5 Walgreen 68.06$ 1.3%

6 CVS 65.61$ 3.1%

7 Lowe’s 52.21$ 3.6%

8 Amazon.com 43.96$ 27.2%

9 Best Buy 35.76$ -1.2%

10 Macy’s 27.86$ 0.9%

11 Apple/iTunes 26.64$ 11.0%

12 Sears 26.61$ -13.4%

13 Rite Aid 25.52$ 0.5%

14 TJX 20.92$ 7.7%

15 Kohl's 19.03$ -1.3%

16 Dollar General 17.50$ 9.2%

17 True Value 16.33$ -1.6%

18 BJ's Wholesale 12.95$ 4.9%

19 Gap 12.87$ 4.3%

20 Nordstrom 12.36$ 3.7%

21 J.C. Penney 11.78$ -8.7%

22 U.S. Military Exchanges 11.49$ -7.9%

U.S. Sales

(Billions) Retailer % Change

vs. YAGO


Exchange Stores

NOTE: Resale systems combined operate thousands of retail operations including Main Stores, Express Stores, Troop Stores,

Package Stores, Sport Shops, Lawn and Garden, Fast Food, Military Clothing Stores, Gas Stations, and more.

EXPRESS/TROOP/

MINI MARTS

CLASS 6

STAND ALONE

CONUS OCONUS

TOTAL

WORLDWIDE WORLDWIDE WORLDWIDE

AAFES 100 26 126 300 24

NEXCOM 68 33 101 159 209

MCX 15 2 17 85 6

CGES 59 5 64 63 10

VCS 169 4 173 N/A N/A

TOTAL 411 70 481 607 249

EXCHANGE MAIN STORES

Exchanges Profile



Exchange Resale Systems

• Pricing equal to or lower than other retailers

• Voluntary Price Reduction (VPR)

• Favorable payment terms

• Marketing funds for:

In-store demos

Premiums, giveaways

Truckload and parking lot sales

Contests and sweepstakes

Clerk training

Scholarships

Exchanges Business Drivers



• Advertising funds for:

Weekly tabloids

In-store flyers

Special programs

• Prepaid freight

• Warehouse allowances

• Business processes

Vendor Managed Inventory (VMI)

Same UPC code for Bonus Packs

Pre-ticketing for certain kinds of merchandise

• E-commerce and social media outreach continue to grow

Exchange Resale Systems




2014 Total MWR Dividends by Branch

Army - $116.5 million

Air Force - $69.4 million

Navy/Marines – $21.4 million

$211 for every soldier and airman

Source: AAFES Quick Facts



Army & Air Force

Exchange Service (AAFES)

AAFES



Established: 1895

Employees: 40,622

Headquarters:

3911 S. Walton Walker Blvd.

Dallas, TX 75236-1598

Phone: (214)312-1101

Website: www.aafes.com


Forest Park, GA Newport News, VA

French Camp, CA Waco, TX

Giessen, Germany Feltwell, England

Tokyo, Japan Inchon, Korea

Okinawa, Japan Honolulu, Hawaii

Director/CEO:

Thomas Shull



Retail Stores On-line Shopping

Concessions Catalog Services

Food Facilities Gas and Auto Repair

Movie Theaters Vending Centers

Military Clothing Stores

AAFES Profile

COO: Michael P. Howard


AAFES Sales Trend


$8.24 $8.65 $8.61$7.78 $7.33

2010 2011 2012 2013 2014

AAFES Profile

$ Billions

+0.98% +4.97% -0.46%

-9.63%

Does not include concessions

-5.78%


AAFES Mission: To be our Customers’ First Choice

AAFES Mission

Quick Facts

• AAFES is 119 years old

• AAFES is self-supporting with 98% of its operating budget

from within

• Only 2% of the exchange budget comes from taxpayer $

• AAFES returned 185.9 million in MWR funds

• In the past ten years, AAFES has returned $2.4 billion

to the quality of life programs

• $211 per capita to every soldier and airman

• Of its 36,000 employees:

24% are military family members

10% are veterans

2% are active duty

Source: AAFES Quick Facts



AAFES Quick Facts (continued)

AAFES Mission

• AAFES returns two-thirds of its earnings to the MWR program

• AAFES operates 2,448 retail facilities worldwide in all 50 states,

5 U.S. Territories, and 26 countries

• AAFES is the only retailer to follow troops into a war zone

• More than 4,345 AAFES employees have deployed since 9/11

• 486 wounded warriors have been hired since 2010

• 7 plants supply fresh bakery goods and water overseas

Source: AAFES Annual Report


Top 10 Main Stores

Store Name & Rank

FY 2013

Sales

1 Kaiserslautern $139.267M

2 Kadena AB $93.271M

3 JB Lewis/McChord $61.976M

4 Camp Foster $58.345M

5 Ft. Belvoir $56.838M

6 Ft. Hood $56.722M

7 Ft. Bliss $54.602M

8 Ft. Campbell $49.321M

9 Sam Houston Exchange $48.838M

10 Lackland Exchange $48.274M

AAFES Profile



Top 10 Class Six Stores

Store Name & Rank

FY 2013

Sales

1 Ft. Buchanan Class 6 $22.029M

2 Santiago PR Retail $13.591M

3 Ft. Belvoir Express $9.452M

4 Ft. Jackson Class 6 $8.195M

5 Ft. Buchanan Main Store $7.789M

6 Ft. Meade Express/Gas $7.575M

7 MacDill AFB Class 6 $7.505M

8 Redstone Arsenal Express $6.981M

9 Hill AFB Mini-Mall $6.772M

10 Ft. Bragg NP Class 6/Express/Gas $6.708M

AAFES Profile



Top 10 Express Stores

Store Name & Rank

FY 2013

Sales

1 Ramstein – Express $38.148M

2 Schofield Barracks – Car Care Center $36.779M

3 AF Kandahar $36.607M

4 Ft. Meade – Express $34.088M

5 Travis AFB – Express $31.200M

6 Ft. Belvoir – North Post Express $29.893M

7 Ft. Hood – III Corps Express $28.378M

8 Ft. Bragg – Pines Express $27.365M

9 Ft. Bragg – Main Express $26.573M

10 JB Lewis/McChord – Class 6 $26.515M

AAFES Profile



Army & Air Force

Exchange Service (AAFES)

Priorities in 2015

AAFES’s Priorities



Critical Growth Areas - Military Star and E-commerce

Targeting Three Main Growth Opportunities National Guard and Reserve Retirees Young Active Duty National Guard and Reserve 12% of our MilStar Business Online Business Growing (22%) Under indexed on the 18-24 Guard and Reserve Shopper (6%)

Our Next Steps Targeted 18-24 mailings and emails - tracking new acquisition Outreach to Guard and Reserve training locations Co-market on Guard and Reserve online sites – measure effectiveness Build relationships with Guard and Reserve organizations

Customer Acquisition




Customer Acquisition

Retirees 32% of customers are Retirees

40% of e-commerce business is Retirees Concern - 37% of Retiree customers are 55+ Our Next Steps:

Focus Target Marketing on Transition Age Groups Leverage their community in “Refer a Vet” program for online shopping privileges

Active Duty 33% of customers are Active Duty

25% of online customers are Active Duty Doing very well with 25-34 age group Growth opportunity - 23% of 18-24 have a Military

Star Card, but only 6% are shopping online

Our Next Steps: Focus on Young Active Duty - Graduation Cards with Milstar Focus

Create Loyalty Incentives in Food Courts and Express




Grow the Express

Buy more, save more Incorporate vendor instant rebates and/or BOGOs Highlight/promote seasonal items to increase basket Bundling Point of sale promotions Solution selling Larger, “value” package sizes where it makes sense

Drive convenience store sales per transaction to realize a 5% average sales per transaction increase (expected) or 10% average

sales per transaction increase (exceptional) in Express Stores.

How this will be achieved:



Extend Online Benefits to Veterans

Soldiers and airmen today have deployed 3-4 times into combat Their sacrifices are often higher

They should have some benefit when they leave the service

Online shopping privileges for


AAFES’s goal is to extend the shopping privilege, but this is still awaiting approval.


http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://eastbrooklyn.com/intro-to-laptop-computers-for-seniors/&ei=iCKEVdaWHYHk-AHO94HADw&bvm=bv.96042044,d.cWw&psig=AFQjCNEa0JXnBfJT1I_-aqExTMFxcPwmXQ&ust=1434809314612552


Navy Exchange Service

Command (NEX)

NEX



Established: 1946

Employees: 14,000

Headquarters:

3280 Virginia Beach Blvd.

Virginia Beach, VA 23452

Phone: (757) 463-6200

Website: www.navy-nex.com


Norfolk, VA Chesapeake, VA

Chino, CA Pensacola, FLA

Naples, Italy Honolulu, Hawaii

Chief Executive Officer

Robert Bianchi



COO:

Michael Good, SES

NEX Profile

Retail Stores; Concessions; Food

Facilities; Gas and Auto Repair;

Vending Centers; Uniform Stores;

Ship Stores


NEX Mission

NEX Mission

To provide iconic brands and

quality goods and services to our

customers at a savings and

support Navy quality of life

programs.



Navy Exchange Sales Trends

NEX Profile

$ Billions

$2.81$2.66 $2.66$2.77$2.64

2010 2011 2012 2013 2014


6.45% +4.92%

+1.44%

-5.33% 0%


NEX Quick Facts!

• NEX offers its customers a 22% savings compared to outside the gate

• $2.4 billion provided to Navy recreation programs over 65 years

• NEX operates 94 NEX complexes (approximately 300 stores)

• ShipStores and Navy Lodges also come under NEX

• The Navy Lodges (39 worldwide) generated more than $67 million in sales

• NEX supports the wounded warrior program, with games for the hospitals,

and 13,000 free nights at the Navy Lodge

NEX Profile




Diverse Global Customer Base

Empty Nesters 21%

Double Dippers 21%

Arrivers - 11% Full Nesters 34%

Senior Shoppers 11%

Source: ALA Roundtable Presentation 2014

NEX Diverse Global

Customer Base

NEX Profile



Top 10 Mini Marts

NEX Profile

Store Name & Rank

FY 2013

Sales

1 JEB Little Creek-Fort Story, VA (Autoport) $11.89M

2 JB Pearl Harbor-Hickam, HI (Fleet Store) $11.51M

3 NAS Pensacola, FL (Mall Mini-Mart) $10.63M

4 NB San Diego, CA (Quick Mart) $9.53M

5 JB Pearl Harbor-Hickam, HI (Mini-Mart Holomoku) $8.72M

6 NH Guam (Mini-Mart/Gas) $7.38M

7 NBK Bangor, WA (Mini-Mart/Package Store) $7.08M

8 NA Capodichino, Italy (NEXMart) $6.93M

9 NAS Whidbey Island, WA (Fleet Store) $6.83M

10 NS Mayport, FL (Fleet/Furniture Store) $6.70M



Top 10 Class 6 Stores

NEX Profile

Store Name & Rank

FY 2013

Sales

1 JB Pearl Harbor-Hickam, HI (Mini-Mart) $10.61M

2 NS Norfolk, VA (Package Store) $10.31M

3 NAS Jacksonville, FL (Package Store) $9.75M

4 NAS Oceana, VA (Package Store) $9.16M

5 JEB Little Creek-Fort Story, VA (Gas/Mini-Mart) $8.56M

6 NAS Pensacola, FL (Mall Mini-Mart) $7.87M

7 NSA Bahrain $6.24M

8 NB San Diego, CA (Package Store) $6.23M

9 NSA Mid-South, Millington, TN $5.93M

10 WRNNMC Bethesda, MD (Package Store) $5.46M



NEX’s Focus: 2014 and Beyond Growth Businesses

Health and Wellness

Pet Apparel Handbags Activewear eCommerce

Fresh Food Footwear

In-Store Experience Cosmetics Portfolio Management Store Segmentation

Center Core “A Better You” Consumer Electronics

NEX Profile

Marketing

Omni-Channel

Grow Email

Navy Blue Holiday

Customer Loyalty Program

Mobile

Supply Chain

In-Stock on Shelf

Space Management

Vendor Compliance

Supply Chain Decision Tree

Growing Sales = Driving Traffic, Keeping Shoppers in Store > 25 minutes


It’s All About the Customer

It’s all About the Customer




Marine Corps


Established: 1897

Employees: 3,543

Headquarters:

3044 Catlin Avenue

Quantico, VA 23134-5103

Phone: (703) 784-3800

Website: www.usmc-mccs.org

Director

Cindy Whitman Lacy

FY 2014 Sales: $898.8 Million

COO: Jennifer Ide


Selected Operations & Services: Retail Stores;

Concessions; Vending Centers; Gas & Auto

Repair; Food & Hospitality centers;

MWR programs

Marine Corps Profile



Marine Corps Vision

• A Great Shopping Experience – Curb to Register

• The First Place our Customers Think to Shop and Have

Confidence in our Assortments

• Clear in our Value Story to the Customer

• Emotionally Connected to the Marine Customer

Marine Corps Mission


Marine Corps Sales Trend

$ Millions

$925.3

0

$997.7

8

$1,0

38

$967.5

0

$898.8

4

2010 2011 2012 2013 2014

Marine Corps Profile


+.41%

+7.78% +4.01%

-6.84% -7.13%

82 Proprietary & Confidential Source: ALA Roundtable Presentation 2014

Line of Business FY14 Sales

(000)

Chg vs.

YAGO Food & Gourmet $58,309 -3.20%

Non-Alcoholic Beverages $45,006 -6.71%

Tobacco $44,523 -5.66%

Health & Beauty $26,596 -2.65%

Cosmetics $22,598 -4.68%

Spirits $22,416 -5.12%

Beer & Ales $22,304 -1.91%

Sports Nutrition $12,262 8.45%

Cleaning $8,233 -19.89%

Wine $8,167 -9.41%

Stationery $8,167 -7.46%

Hardware $4,504 -8.40%

Pets $2,710 -1.59%

Personal Care $2,443 -9.97%

Automotive $2,206 -6.44%

Mass Cosmetics $1,408 -2.18%

Total Consumables $291,853 -4.83%

Consumables by Line of Business


• Supply Chain/Inventory Efficiency

• Marine Marts/Small Store Formats

• Operational Efficiency

• Customer Centricity

• Strategic Communication

• Employee Development & Career Pathing

MCX Priorities


Marine Corps Priorities


Veterans Canteen Service


Established: 1946

Employees: 3,100

Headquarters:

Jefferson Barracks Road, Bldg# 25

Saint Louis, MO 63225

Phone: (314) 845-1200

Website: www.vacanteen.va.gov



Executive Director:

Joseph Tober

Retail Stores; Food Operations

(Cafeterias); Personalized Services;

Vending

Core Customers:

Patients (including relatives & friends);

Staff & medical workers; Volunteers

COO:

James Leahy

Average Retail Store Size:

1,500 sq. ft.

Veterans Canteen Profile


Mission Statement:

To provide America’s Veterans, enrolled in VA’s

Health Care System, their families, caregivers, VA

employees, volunteers, and visitors, reasonably

priced merchandise and services essential to their

comfort and well being.

Veterans Canteen Mission



$372$412 $421 $429 $443

2010 2011 2012 2013 2014

Veterans Canteen Sales Trend

Source: Military Retailer 2011 Fact Book

$ Millions

-5.82%

10.75% 2.18% 1.90% 3.26%



Eligible Customer Base


• Veteran Enrollees > 7,800,000

• Family Members (est.) 7,800,000

• VA Caregivers 221,000

• VA Volunteers 25,000

• Family Members 580,000

More than 16 million


Established: 1945

Employees: 1,600

Headquarters:

Chesapeake, VA

Phone: (757) 420-2480

Website: www.uscg.mil



Commander:

Captain Robert Whitehouse

Retail Stores; Food Operations (franchised); Gas

Stations; MWR Programs; Vending Centers

Director of MWR:

Gary Scheer

Coast Guard Profile

COO:

Jim Reiley



Mission: To provide quality goods and services at a savings to our authorized patrons, and to provide funding to the Coast Guard’s Morale, Well Being and Recreation program.

Coast Guard Mission

Coast Guard Mission


The Coast Guard Exchange (CGX) is one of many support organizations within the Department of Homeland Security (DHS). CGX is a military activity that operates as a business enterprise. Income generated is used as working capital to maintain CGX and to provide the Coast Guard with supplemental funding to the Morale, Well-Being, and Recreation (MWR) fund. Because CGX provides services to its customers in remote locations, some units operate with little or no profit as a benefit to military service members and their families. Photo: Courtesy of the ALA


$158.4 $162.6 $162.7 $158.3 $158.0

2010 2011 2012 2013 2014

Coast Guard Sales Trend

Coast Guard Profile


$ Millions

+8.32% +2.65% +0.06% -2.70% -0.19%

93 Proprietary & Confidential Source: American Logistics Association

Coast Guard Profile

64 Locations in 23 States and Puerto Rico

94 Proprietary & Confidential Source: American Logistics Association

Coast Guard Profile

Store Segmentation

Format # Stores % Total Stores

% Total Sales

Superstore 2 3% 30%

Main Store 6 9% 13%

Convenience + 12 19% 18%

Convenience 1 11 17% 4%

Convenience 2 22 34% 12%

Fleet 5 8% 11%

Student 4 6% 6%

Market Place 2 3% 6%

TOTAL 64 100% 100%


Military Resale Market

• Powerful mission – serving the most deserving patrons in the world, with a benefit they highly value

• Profitable market – no slotting fees, lower go-to-market costs • Strategic channel – demographically formative years, large

number of authorized patrons, global reach

Summary



Thank You!


the military market 2015 (fy 2014) - empower it, inc · 2015. 8. 26. · defense commissary agency...

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