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The Honolulu Advertiser
Posted on: Monday, August 14, 2006

New agency boss knows groceries

By Tom Philpott

After 140 years, the tradition of a career military officer being in charge of commissary stores, and how groceries are stocked and sold on base, is over.

Patrick B. Nixon, a career grocer and a senior civilian executive of the Defense Commissary Agency since its formation 15 years ago, became its first full-fledged civilian director in June. Stand by for fresher produce, more self-checkout counters and stores designed to serve both convenience shoppers and patrons needing to re-stock their fridge and pantry.

Nixon is in charge of 284 stores and 18,000 employees. Fresher produce for commissary patrons has long been a goal of his. He began to do something about it when he became acting director in 2004 and will see it achieved system-wide as the commissary agency's director.

For decades, commissaries procured meats, dairy products, fruits and vegetables using the same bureaucracy that supplies mess halls. That began to change, Nixon said, when "we realized that the military logistics system that does troop feeding is not agile enough, nor does it operate with the type of distribution model needed in the retail supermarket industry."

In the 1990s, the Defense Commissary Agency began contracting for its own meats. But procurement of fruits and vegetables for commissary bins remained the responsibility of the Defense Logistics Agency.

The commissary agency has been testing a commercial model to supply produce to 22 commissaries in the Tidewater area of Virginia. Results show fruits and vegetables are fresher, and that the commissary agency can lower its own costs by eliminating Defense Logistics Agency involvement. Commissaries in the Midwest will be next in line to see fresher produce.

Nixon said his goal always is to increase value to commissary patrons while reducing costs to taxpayers. Commissaries cost taxpayers $1.1 billion a year to operate, with 68 percent of that going to salaries.

Nixon has spent all of his working life in the grocery business except for three years as a Marine with 21 months of service in Vietnam. For the past 23 years, Nixon has been managing commissary stores or commissary regions.

Shoppers, on average, still save 32 percent over goods sold in retail supermarkets, for annual savings of $2,700 for a family of four.

There is no talk today of privatizing commissaries, Nixon said. The notion of allowing "variable pricing," which would accommodate a for-profit approach to store operations, has been scrapped, Nixon said.

Commissary products still are sold at cost plus a 5 percent surcharge. Surcharge dollars are used to modernize current stores and to build new ones. A big challenge ahead, said Nixon, will be finding enough dollars to expand stores at stateside bases due to receive thousands of additional troops and families from bases being closed in Europe.

The commissary agency's "store of the future," the largest commissary ever built, will open in San Diego next year. At one end will be a convenience store, with short-term parking. At the other, patrons will enter a modern store with a wellness and nutrition theme.