Military commissaries could increase prices on some items while also lowering them on others as early as November, officials announced Friday.
By law, the items at the store are sold at cost plus a 5 percent surcharge. A measure in the 2016 National Defense Authorization Act requires the Defense Commissary Agency to test a new pricing structure at a handful of yet-to-be-named locations while continuing to sell goods at cost at the rest of the system's stores.
Under the new plan, known as "variable pricing," commissary grocery costs will be set to offer users a savings based on a periodic study of the price of goods outside the gate. Specifics on the savings amount or how, specifically, the price studies will be done have yet to be released.
"We hear from our military families that they sometimes find lower prices on selected items outside the gate," Joseph Jeu, the agency's director said in a statement. "For the first time through this new approach, we will compare our prices with local grocers on a more frequent basis to better inform our customers of potential cost savings over stores in their nearby community."
In the past, the system has estimated patron savings based off an annual nationwide study which compared the price of items carried by both the commissary and civilian stores. That research was then calculated into a national savings average, which for several years hovered around 30 percent.
But critics of the process said the calculation was not accurate. They noted that it didn't take into account the savings from store specific generic brands, which tend to cost less than the national brand items carried by both commissary and civilian stores. It also did not consider the price of fresh meat, which is often less at the commissary than it is off base.
The new plan will look at specific locations rather than a national average, officials said in a fact sheet, and will give the system more flexibility to set prices based on actual local costs.
"The existing methodology was designed to provide a global view of savings, which is why we have always expressed our patron savings as an overall average," the fact sheet states. "This updated methodology does not change the actual benefit patrons receive. It simply gives DeCA an enhanced view of the savings achieved in the various geographic areas. The updated methodology will serve as a baseline used to ensure the current patron savings benefit is maintained as different reforms are tested and implemented."
The pricing pilot roll-out comes at the same time that the agency starts work on carrying a generic "private-label" brand, similar to Walmart's "Great Value" option. That plan, which was also approved in the 2016 legislation, will allow the system to sell some items at a profit.
Officials are beginning discussions with private label producers, they said in the fact sheet, and will decide over the next several months what private-label products to carry and when to start selling them.
"DeCA's goal through this entire effort is to maintain the savings benefit provided for future generations of patrons, to stay relevant to shoppers, and to generate savings to help reduce the need for appropriated funds," the fact sheet states. "Through the introduction of private label, DeCA also wants to improve your opportunities to buy additional quality products at better prices."
-- Amy Bushatz can be reached at email@example.com. Follow her on Twitter at @amybushatz.