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What the price?

Sticker shock or a fantastic deal. Average price or save a few bucks. No one complains about getting a great deal but we certainly speak up when prices are high. I get it. You want a great deal all the time. You were promised the commissary benefit with your service commitment. Somehow the consensus translated to commissary patrons getting a great deal on every product. This is not the case. Our operations are paid for by Congressional funding and ultimately, the American people. The 5% surcharge goes into a fund that repairs commissaries, builds new ones, and maintains the equipment.

You can’t expect a deal on every product.

We may be non-profit but the companies that provide our goods are not. Although our buyers negotiate vigorously to get the best possible price on every item sold in commissaries, there are times when our buyers cannot develop a good business case for accepting certain deals offered by suppliers. Commercial stores often sell items as “loss leaders” at prices well below their cost in order to attract customers who they hope will buy high-dollar items during their shopping trip. Items such as milk, eggs, and bread are commonly utilized for pricing emphasis as a loss-leader.

But there is some good news…

Change is coming slowly. Congress has now authorized the commissary system to “use best business practices” when setting prices and negotiating costs with suppliers. These practices are known as “variable pricing authority.” These changes have altered the course of the commissary benefit. Variable pricing is simply a strategy where multiple factors are considered in determining the price of a product – such as market price, cost of acquiring the product, importance to the customer, etc. This is the standard pricing method used by grocery retailers. Variable pricing, prices will continue to change periodically just as they do today, but the overall out-of-pocket cost of groceries for commissary patrons will not increase. Essentially, we hope to alleviate the wide savings range and smooth it over. We can take profit on some items and use it to put a dent in higher priced items. Since Congress mandates no change to patrons’ overall level of savings, that’s just what we intend to do.

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