1 Mr. Thomas E. Milks Chief Operating Officer
2
• Saving money on eating out: switching from fine
dining to fast foods and seeking supermarket meals
solutions in place of restaurant fare
• Saving in the store: buying more value brands, using
coupons, buying basic ingredients, and shopping with
a plan
• Switching store formats: buying at supercenters,
warehouse clubs, and limited assortment stores
Consumers are economizing on food purchases; three trends have emerged in 2009:
Source: FMI Grocery Shopper Trends 2009: Recession Changing Consumers Shopping Behavior at the Supermarket (14 May 2009)
3
• Pressures from the turbulent economy are changing consumers behavior…
• Consumers are doing MORE of:– Going out of their way to find
bargains – Shopping multiple stores for the best
price– Clipping & redeeming coupons– Eating out less – Reading supermarket circulars
• Consumers are doing LESS of:– Dining out for lunch & dinner– Buying less organic produce & meats– Buying less Starbucks Coffee– Buying less Premium dark chocolate
Source: NGA, 2009 Consumer Panel Survey & Phil Lempert, Supermarket Guru & Mintel
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30% 30% 22%36%
Using coupons more often Buying mulitiple items at atime to get better deal
stockpiling sale items Consolidating spending atstores where get best value
Source: Retail Forward ShopperScape, Feb/Mar/Apr 2009
Grocery Food Shopping
• Using coupons, buying multiple items at a time, and
stockpiling sale items most common
• Consumers are looking for that Multiple item buy
(i.e. 10/$10 or 5/$3) in order to get best value on
deal
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• Capitalize on Increased In-Home Eating Occasions– Consumers and Patrons eating out less: Restaurant quality & Healthy meals,
conveniently prepared at home
• Saving Money is a Priority – Increased use of coupons– Buying products on sale– Provide multiple pricing for value and stock up
• Consumers are Time Stressed– Provide convenient home meals solutions, in both Frozen and Shelf Stable
Grocery
– Key in on innovation and flavor profiles that meet the needs of the Patrons: Dining out “At Home,” Convenience, Healthy Fit
• Importance of Variety– Patrons expressed satisfaction with DeCA’s strong variety offering– DeCA point of difference versus Grocery & Club channels
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CHANNEL LOYALTYTotal US Market - 2008
41.1
7.85.0
2.2
39.338.6
8.45.4 4.8
40.040.2
8.15.3 6.2
39.2
COMMISSARY KROGER GROCERY-CORP
SAFEWAY- CORP SUPERVALU RETAILTOTAL- CORP
WAL- MART- SUPER
2006 2007 2008
Page 7
DeCA 2008 Annual State of the Business
Source: Nielsen Homescan 2008 Cross Outlet Facts
DeCA 2008 Annual State of the Business
Source: Nielsen Homescan 2008 Cross Outlet Facts
Confidential & Proprietary
Copyright 2009 The Nielsen Company
Confidential & Proprietary
Copyright 2009 The Nielsen Company
9
Location Type Date
Richards-Gebaur, MO New January 27, 2009
New Orleans, LA Interim store March 31, 2009
Saratoga Springs, NY New April 14, 2009
Dyess AFB, TX Re-opening April 21, 2009
Robins AFB, GA New May 28, 2009
Livorno/Camp Darby, Italy New June 5, 2009
Fort Drum, NY Re-opening June 30, 2009
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Location Type Opening
Chievres, Belgium New Jan 2010
Keesler AFB, MS New Apr 2010
New Orleans, LA New Oct 2010
Eglin AFB, FL Re-opening Dec 2010
Fort Riley, KS (MILCON) Re-opening May 2011
Fort Bliss, TX (BRAC) New Jun 2011
Fort Campbell, KY New Jun 2011
Moody, GA Re-opening Jul 2011
Quantico, VA New Nov 2011
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Project awarded:Project awarded: Sept 2007
Project cost:Project cost: $20.1 M
New facility:New facility:48,256 square feet (sales area 22,295 SF)
Project includes the Project includes the following:following: New administration offices, employee break rooms, cashier office, a bakery/deli area, self checkout, all new refrigeration display cases, walk-in coolers and freezer, new décor package, staging/receiving areas and patron parking.
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Project awarded:Project awarded: Apr 2007
Completion: Completion: Jan Jan 20102010
Project cost:Project cost: $30.3 M
New facility:New facility: 97,876 SF (sales area 51,600 SF)
Project includes the Project includes the following:following: A modern state-of-the-art shopping facility that will be environmentally friendly and energy efficient.
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Project includes the Project includes the following:following: a modern state-of-the-art shopping facility that will be environmentally friendly and energy efficient.
Project awarded:Project awarded: Sep 2008
Completion: Completion: Aug 2010
Project cost:Project cost: $19.5M
New facility:New facility: 48,041 SF (sales area 24,503 SF) part of shopping complex with exchange
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Project awarded:Project awarded: Oct 2008Completion:Completion: Oct 2010Total project cost: Total project cost: $22.3MRenovated facility:Renovated facility: 105,573 SF (sales area 56,988)
Project includes the following:Project includes the following:
This project will expand portions of the warehouse, the front end area for new entrance area, shopping carts and checkout area. It also includes new admin offices, and storage areas. The sales area will be renovated with a new décor package, refrigerated display cases and bakery/deli service area. The refrigeration system, HVAC and lighting system will be replaced.
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Project includes the Project includes the following:following: The project provides new refrigeration systems, display cases, including monitoring and controls, expanded sales/checkout area, and relocated backroom food processing areas. Also included is upgrade of all interior Décor and finishes, HVAC system replacement, repairs, and site improvements.
Project awarded:Project awarded: Aug 2009Completion:Completion: Spring 2011Total project cost: Total project cost: $24MRenovated facility:Renovated facility: Square footage increased from 62,067 to 108,178 SF. (Sales Area will increase by 74% to 58,980 SF )
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Project awarded:Project awarded: May 2009Completion:Completion: Mar 2011Total project cost: Total project cost: $26.1MNew facility:New facility: 113,827 SF (sales area, 60,765 SF)
Project includes the Project includes the following: following: A modern state-of-the-art shopping facility with a large deli and bakery, hot foods, sushi to go and self-checkouts conveniently located next to Grab ‘N Go products. The store will be environmentally friendly and energy efficient. The project is being funded under the Base Realignment and Closure program.
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Project awarded:Project awarded: Sep 2009Completion:Completion: Jun 2011Total project cost: Total project cost: $29.6 MNew facility:New facility: 121,871 SF, (sales area, 63,134 SF)
Project includes the Project includes the following:following: A modern state-of-the-art shopping facility that will be environmentally friendly and energy efficient.
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Project awarded:Project awarded: Aug 2009Completion:Completion: May 2011Total project cost: Total project cost: $15.6MRenovated facility:Renovated facility: 65,470 SF (sales area 34,127)
Project includes the Project includes the following:following: The project includes major additions and alterations to existing commissary for expanded sales area, bakery deli, updated decor, new refrigeration system and controls and display cases, force protection provisions, site improvements related to expansion.
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Project awarded:Project awarded: Sep 2009Completion:Completion: Nov 2011Total project cost: Total project cost: $26.1 MNew facility:New facility: 121,226 SF, (sales area, 64,135 SF)
Project includes the Project includes the following:following: An international delicatessen and bakery, self-checkouts, modern décor; the store will be environmentally friendly and energy efficient.
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• HQ Performance & Policy reorganizes under CoE
concept
• Aligns with Commissary Levels of Authorized
Standard Service (CLASS)
• More efficient, flexible to support culture of
innovation and creativity
• Personnel assigned to individual CoEs will be
linked to store departments for all policy
oversight, construction reviews, and other
operational issues
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– Operations Division – strategy and
oversight
– Management/Admin Division
– Grocery Division
– Customer Service Division
– Meat Division
– Produce Division
– Specialty Departments Division
– Facilities Division
– Environmental Management Division
– Security Division
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• Current label
operations are labor
intensive
• Automatically
installed with all
new CONUS
commissary
construction
• Beginning January
2010 replace CONUS
commissary labels
with ESL over 5
years
• Overseas stores:
ESLs only installed
at LARGE locations
such as Ramstein,
Vogelweh, Osan,
Kadena
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• Efforts to Improve– Re-commissioning at Mayport Commissary to
reduce energy use by optimizing refrigeration and air handling controls
– Preparing to conduct DeCA-wide equipment assessment to meet FY 2015 energy and water goals
• New Initiatives – Initiating Web-based refrigeration monitoring– Low ambient “layered” lighting and daylighting
at Little Creek NAB Commissary • Successes
– Energy reporting Web site– Annual worldwide Facility Energy Supervisor
energy efficiency training
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• In-house Gift Voucher Program
– Available in stores October 15, 2009
– $25 denomination
– Issued and redeemable at all 255
locations
– Purchased with cash, check, debit,
traveler’s check, or money order
– Large quantities should be preordered
at the store a week in advance
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May 2010• Family Fun and Fitness Festival
• 5K Run/Walk (DeCA Industry
partners onboard)
• Everyone Wins! Exchanges, DeCA &
MWR/Services
• “Big Top” in the parking lot: DeCA
Case Lot Sale; Exchange Sidewalk Sale;
Fitness Demos
• Theme - Health, Wellness, Fitness,
Super Sales/Savings!
• Food sampling; music; recreation
demos; health and wellness outreach;
kids programs
May 2010• Family Fun and Fitness Festival
• 5K Run/Walk (DeCA Industry
partners onboard)
• Everyone Wins! Exchanges, DeCA &
MWR/Services
• “Big Top” in the parking lot: DeCA
Case Lot Sale; Exchange Sidewalk Sale;
Fitness Demos
• Theme - Health, Wellness, Fitness,
Super Sales/Savings!
• Food sampling; music; recreation
demos; health and wellness outreach;
kids programs
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AreaDollar Sales
Percent Change
Customer Transactio
ns
Percent Change
East $2.8B + 3.5% 91.9M + 0.70%
Europe $503M + 3.4% 21.1M +4.18%
West $2.6B + 2.1% 94.8M -0.14%
Total $5.9B
+ 3.0%
207.8M +1 .00%
Sales/transactions through September 30Sales/transactions through September 30
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Estimated sales through Estimated sales through September 31September 31
Sales through September 30Sales through September 30
Estimated sales through Estimated sales through September 32September 32
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• Increased focus on “Winning Weekends”
–7 of Top 15 Record “Single Day Sales”
• Expanded Guard and Reserve sales
• Aggressively expanded and promoted club packs
–Focused on perishable
• Case Lot sales
– Twice-a-year worldwide sales
– Increased number of region and zone sales
• Focused on “Greener” Efforts
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Rank Day and Date Sales Event1 Saturday, January 31, 2009 $29,478,429.87 Super Bowl
2 Saturday, February 02, 2008 $28,554,263.79 Super Bowl
3 Saturday, November 17, 2007 $26,860,563.76 Thanksgiving
4 Saturday, November 22, 2008 $26,485,054.81 Thanksgiving
5 Saturday, January 31, 2004 $26,032,612.39 Super Bowl
6 Saturday, February 03, 2007 $26,029,117.16 Super Bowl
7 Saturday, November 01, 2008 $25,708,710.38 Payday
8 Saturday, November 15, 2008 $25,339,345.38 Thanksgiving
9 Tuesday, December 23, 2008 $25,321,467.24 Christmas
10 Saturday, November 18, 2006 $25,255,742.11 Thanksgiving
11 Thursday, July 03, 2008 $25,045,894.17 July 4th
12 Saturday, May 02, 2009 $24,873,606.71 Payday
13 Saturday, February 02, 2002 $24,835,463.69 Super Bowl
14 Saturday, August 30, 2008 $24,469,813.43 Labor Day
15 Saturday, February 28, 2009 $24,444,430.57 Payday
FY 2009: 7 of Top 15
FY 2009: 7 of Top 15
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FY 2009 Totals164 On-Site Sales!
Sales: $9.1M Savings: $4.1MServing 81,668
Patrons!
As of September 30
34
FY 2009 vs. 2008 Sales: 111 % (4.8M)
Customer count:
103%
Serving 41,524 more Patrons!
As of September 30
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18 Surveys completed92.10% Met or exceeded customer expectations91.97% Met or exceeded savings expectations83.15% Consider these sales to be a valuable benefit
53.01% of patrons traveled from a distance greater than 16 miles from the event 59.25% of the patrons do not regularly shop at the commissary14.28% were Active Duty38.97% were Retired Military39.28% were Guard & Reserve
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Fall Winter SpringSummer
(July-Aug)
East $8,698,994
$9,531,161
$13,303,787
$8,242,088
Europe
$722,518 $859,764
$1,389,331
$532,007
West $9,441,503
$10,803,787
$14,190,858
$8,330,102
Total $18,863,015
$21,194,712
$28,833,976
$17,104,197
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DOLLARSDeCA EUROPE $504,700 DeCA EAST $8,913,526 DeCA WEST $8,541,620 GRAND TOTAL $17,959,846 1% increase over Worldwide Case Lot Sale in May 2008
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• Earth Friendly Days promotion featuring “Go Green” products
– April 16-29, 2009, promotion, coinciding with Earth Day (April 22) and Arbor Day (April 24)
• Leveraging explosive category growth for green
and organic products
• FY 2008 surpassed CFL Bulb Goal – over 1.25 million sold! – FY 2009 through September 21, we‘ve sold 578,773
– FY 2009 energy savings: $7.5M ($13 per bulb sold/over life of bulb)
• Reusable grocery bags– Over 2.1 million DeCA imprinted non-thermal bags
have
been sold since October 2007
– Over 627,000 non-imprinted thermal bags sold since 2005
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Distributor
Support
P We PURSUE EXCELLENCEOur pursuit of excellence is demonstrated through the valued benefit we deliver to the military members and their families.
A We are ACCOUNTABLE
We are accountable for commitments, results, and quality to customers, stakeholders, partners, and employees. We drop our personal agendas and band together as a team with shared results. We extend trust, respect each other, and value differing opinions.
S We have a SENSE OF URGENCY We are steadfast in our belief in the value of the benefit we provide. We have a sense of urgency and a common purpose.
S We SET HIGH STANDARDS We ensure standards are set HIGH to measure our progress and continuously improve our processes.
I We value INNOVATION
We recognize the value of innovation, ideas, collaboration and teamwork from across the enterprise. We seek open and honest exchange of information and ideas. We look for opportunities to make positive changes. We get better everyday.
O We take OWNERSHIP
We are leaders that take ownership and pride in what we do. We provide a clear and compelling vision. We empower and engage team members. We treat all with respect and dignity. We expect and model excellence in delivering the “benefit.”
N We are NECESSARY We are necessary to the Quality of Life of the military warfighter and their families.