THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, September 8, 1995 TAG: 9509080519
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
LENGTH: Long : 109 lines
The Defense Department says it wants only to please by opening commissaries year-round to reservists and their families, but the idea has the nation's supermarket chains up in arms.
Grocers sighed with relief two years ago, thinking they had seen the last of the proposed legislation they loathed. They were mistaken. The first version failed, but another one is now winding its way through Congress.
``This is actually old news. I was surprised it had resurfaced,'' said Michael E. Julian, chairman and chief executive officer of Norfolk-based Farm Fresh Inc.
Roughly 7 million people are eligible to shop year-round at the military's estimated 320 commissaries. The proposal, tucked inside the defense budget bill, would give more than 2 million reservists, National Guard members and their families the same benefit. The measure also would open commissaries year-round to more Reserve and Guard retirees.
The proposal already has passed the Senate. Grocers are furiously lobbying the House of Representatives, which didn't agree with its Senate colleagues, to fight the legislation once it goes into conference.
Commissary officials don't see what the fuss is all about.
First of all, they say, reservists and Guard members deserve the same privileges as active-duty military personnel, especially since their duties are increasing.
``We use the terms that they are no longer weekend warriors but on-call warriors,'' said Sydney Hickey of the National Military Family Association, which supports military family interests.
The move also would make the nation's civilian-soldiers feel less like second-class citizens in the military, said Maj. Tom Wilkinson, a spokesman for the Virginia National Guard.
``Although I might not use it that often, it would be nice to have that opportunity,'' Wilkinson said.
The Defense Commissary Agency doesn't think serving civilian-soldiers and their families will have much of an impact. Reservists and Guard members already can shop at commissaries 12 times a year, during two weeks of training and if they're called to active duty. Because almost all of them live off base, agency officials doubt a significant number will go out of their way to shop at military supermarkets.
``They're assuming that reservists are going to make a big impact,'' said Flo Dunn, a spokeswoman for the Defense Commissary Agency. ``We don't see that at all.''
She said her agency supports a limited, regional test to show the effects of extra commissary shoppers.
But the supermarket industry says commissaries are notoriously inefficient, and that taxpayers already are footing the bill. The government says it spent $976 million in fiscal 1995 to subsidize commissaries. Grocers say the government will have to pay even more money if the proposal passes.
``We feel this is a time that the government should be eliminating excess spending,'' said Chris Ahearn, a spokeswoman for Salisbury, N.C.-based Food Lion Inc.
The Food Marketing Institute, an industry organization, says the Defense Department's motive is increasing revenue - not pleasing reservists.
``They've seen their sales decline as active-duty personnel have declined, so they're looking for new sources of revenue,'' said Bill Greer, editorial director for the Washington-based group.
Greer also argues that active-duty personnel should retain more benefits than civilian-soldiers.
``I think active-duty military personnel who work year-round have to wonder why someone who puts in two weeks a year gets the same benefits they have,'' he said.
But it's not taxpayer subsidy that worries grocers; it's turf. In a cutthroat industry known for its razor-thin profit margins, the military's seemingly well-intended gesture isn't welcome.
Especially in Hampton Roads.
In this region, commercial grocery chains have more to worry about. Hampton Roads is stocked with seven military commissaries. They include Norfolk Naval Station, Oceana Naval Air Station, Little Creek Naval Amphibious Base and Fort Eustis in Newport News. The others are at Norfolk Naval Shipyard in Portsmouth and Langley Air Force Base and Fort Monroe in Hampton.
The commissaries remain strong competition. Farm Fresh and Camellia Foods, which owns the Be-Lo chain, are particularly vulnerable because their stores are primarily located in defense-dominated Hampton Roads.
Last year, local commissaries generated $233.9 million in sales, giving them 8.4 percent of the region's retail grocery market, according to the publication Food World. They are No. 3, behind leader Farm Fresh and Food Lion, among retailers that sell groceries and other products.
The figures included two commissaries - at Fort Story and Yorktown Naval Weapons Station - that have since closed.
Local grocers have good reason to fear a slip in sales.
Commissaries regularly beat retailers' prices because they only charge 5 percent over cost.
Despite its low prices, the Norfolk Naval commissary doesn't look like a discount operation.
``We are a regular grocery store,'' said Sonny Tudor, officer in charge.
The military supermarket is well stocked and clean - from the restrooms to the shiny floor. And a seafood section in back includes everything from catfish to salmon steaks and scallops.
Workers receive continuing training at the commissary, mainly because commissary customers demand polite and speedy service, Tudor said.
``Our customers have a great feeling of ownership,'' Tudor said. ``They feel, `I've earned this benefit. This is my store.' '' ILLUSTRATION: Color photo by Martin Smith-Rodden, Staff
The Norrfolk Naval Station commissary is one of seven military
markets that operate in Hampton Roads.
Graphic
Market share for stores that sell groceries in Hampton Roads.
by CNB