The commissary will start carrying an in-house brand in May of next year, officials announced this month, and commissary price changes aren’t far behind.
The plan may seem like a simple thing — add “generic” products specific to the commissary to shelves, much like Walmart does with its “Great Value” brand. But under the surface, the plan is the first visible step in the commissary reform that the Defense Department and Congress have been mulling for years.
Unlike every other product currently carried by the commissary system, the generic products will not be sold at-cost. In fact, the whole goal behind the in-house brand is to allow the commissary system to make some coin by contracting with a company to produce an off-label brand and then marking them up beyond what the commissary paid for them.
That’s a no-brainer if you’re a store like Walmart where items are purchased by the store at one price and sold to you at another, allowing the business to be, well, a business.
But if you’re the commissary where, until recently, goods had to be sold at-cost plus a five percent surcharge, well, this is mark-up stuff and commissary price changes are a brave new world.
And while it starts here with generics, it certainly won’t stop here. In the most recent defense bill, Congress gave the commissary the go-ahead to change all prices, as long as they can match a yet-to-be-announced savings point. In that plan, the commissary system will examine costs off-base through a formula and then adjust item prices in their stores to reflect a, for example, 20 percent savings.
In the meantime, the private label products will be produced by SpartanNash, a company that already contracts with the government for grocery and food distribution.
Initially, DeCA will launch the program worldwide in May of next year with 400 new products, bringing the total to about 1,000 products by the end of 2017, they said.