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June 28, 2013

Commissaries use research to determine savings

Scout reports

One of the benefits commissary shoppers enjoy is an overall cost savings over goods and supplies purchased at outside retailers. These savings help keep customers coming back.

However, commissary officials don’t determine customer savings through a random dart-throw.

Instead, they do a price-comparison study which is published annually in September, to determine the average level of savings.

The Defense Commissary Agency, or DeCA, uses a Neilsen-provided database of actual prices from commercial grocery stores and commissaries to determine savings in six specific areas worldwide. They include: the 48 states within the continental United States, or CONUS; all 50 states; worldwide; Alaska; Hawaii and overseas.

In CONUS, the database allows DeCA to compare prices of virtually every UPC coded item sold in CONUS commissaries to identical items sold in commercial grocery stores. (More than 35,000 scanned grocery items were used in the 2012 analysis.) Tobacco products are not included.

For CONUS non-scannable items such as fresh meat and fresh produce, where it is not possible to use the database, a price comparison is obtained through a survey of the produce contract core items and mandatory meat items carried at 30 commissaries versus two outside retailers for each commissary location.

“I don’t know which retailers the survey [personnel] use, but when we price-compare, we compare our commissary prices against stores from three of the area’s most well-known grocery chains,” said Judy Mendez, Fort Huachuca Commissary director when she explained about the price comparisons people sometimes see in aisles when shopping in the commissary.

“Hands down, our biggest savings are on meat, chicken and produce,” she added.

Surveys outside the continental United States are done differently, depending on the area where the commissaries are located. However, they also involve cost comparison.

DeCA uses the necessary components of the latest published Consumer Expenditure Survey published by the Bureau of Labor Statistics to weigh savings across seven major categories; scan data categories include dairy, grocery food, frozen food, grocery non-food, and health and beauty care. Non-scan categories include fresh meat and produce.

DeCA’s sales weights from the six geographical areas are then factored into the model to arrive at a worldwide savings percentage.

Taxes for food and nonfood items are then applied to all retail sales prices and surcharge applied to commissary prices to arrive at an after-tax and surcharge-savings percentage.

These savings are then presented in general geographic segments (shown) with the DeCA worldwide savings percentage representing a composite of all geographic areas.




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