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The economy of shopping on base — How do the NEX and Commissary stack up to the other bargain stores in town?
The Bangor NBK commissary is bustling on Sunday, one of the biggest shopping days of the week. Carts squeeze past each other in the aisles, swerving out of the way just before collision.
In the meat department, Chris Gordon of Port Orchard eyes a stack of deep red sirloin steaks. When a spot opens between two other customers, he reaches forward and pulls the whole stack of four off the shelf. Satisfied with his find, he strides back to his wife and two young boys who are dangling on the shopping cart in aisle six. Their cart is filled almost to the top with snacks, beverages, produce, and now the steaks.
For military families, the Commissary and the Navy Exchange (NEX) are important “non pay” privileges. With the reputation of having the best deals in town and being completely nonprofit, these two stores sell every day items at low prices with no tax. For families feeling the effects of the economic recession, being able to shop on base is a vital perk of the job.
But like all stores, the prices for some items are better than others.
“The meat and produce here are very good. We always stock up when we come out,” Chris Gordon says. Other shoppers within earshot nod their agreement.
But Lynette Gordon, the active duty enlisted sponsor adds, “Diapers, actually most baby items, are the same or more expensive on base, and it’s just cheaper to buy in bulk at Costco.” As a mother of two young boys, the price difference is enough to make her split the trip for a bargain.
The Commissary faces some price competition with the rise of bulk stores like Costco and big chains like Walmart.
Nancy O’Nell, a Commissary public affairs officer, explains “other stores may offer “loss leaders” to draw customers in by selling certain items below cost, they pay for such promotions by marking up prices of other products to account for their overhead costs and their desired profit. Since Commissaries sell at cost, we do not have profits to cover losses we would incur if we price matched.”
Cassandra Hutts, a junior officer’s wife and employee of Walmart, observes, “Commissary prices compared to say Central Market, Fred Myers, and Albertsons are less, but I think equal compared to Walmart.”
When prices are so similar, shopping just becomes a matter of geographical convenience. Hutts says that she often picks up groceries after a work shift to save the drive from Poulsbo to the Bangor base.
With the price of gas continuing to hover near $4 per gallon, distance from the base is a definite factor in whether or not people will come from distances to shop.
Over all savings
Though the Commissary does not price match, it does go to bat for its military families by negotiating top quality, low-cost contracts with vendors which lead to an average savings of more than 30 percent yearly.
In the produce section, Paula Sullivan, who has worked at the store for 25 years, stocks bags of precut salad. Never taking her eyes of the rows of leafy green, she explains that the current supplier of produce for the store is Spokane Produce, an Eastern Washington distributor who had to compete to win the Commissary contract.
“Different companies bid for contracts every couple of years. It changes all the time, but the best bid gets it,” Sullivan says.
She believes that this is one way that the buyers for the Commissary work to keep prices competitive and quality high. Distributors are put through their paces, presenting their freshest produce at the best possible price to secure the military contract.
The Navy Exchange, just next door, has much more freedom with price matching. The NEX is the counterpart to the Commissary, but runs on a completely different model. While the Commissary is government funded and must sell all products at-cost, the NEX is a self-funded nonprofit, meaning that it keeps itself running with its own revenue. 30 percent of profits at the end of the year are put into remodeling, maintenance, employee pay, and updating facilities. The other 70 percent is placed directly into MWR programs like the gym, bowling alley, and other programs on base that increase quality of life for military families.
“It’s a fine balance. While we don’t have a board of directors, we do have to create some profit to sustain the NEX and for donation to better MWR. Some [NEX] locations make no profit, especially the smaller ones; then we have to pay to keep them open as well. But all NEX locations have the primary goal of giving back profits to the Navy community. No outside retailer has that sort of heart,” says Cricket Mathews, manager of the Bangor NEX.
Shoppers come to the NEX to find bargains on clothing, housewares, sports equipment, toys, and all other non-food items. Its layout is similar to a mall, automatic doors sliding open to a display of glittering pink glass perfume bottles and makeup--Clinique, Estee Lauder, Kiehls. All the top names. Mannequins stand along the corridor wearing the season’s latest fashions, Coach purses, designer sunglasses, and jewelry.
Further down is an electronics sections big enough to satisfy any tech junkie, boasting plasma screen TVs and a full line of Apple products.
Navy families flock to the NEX when they are looking to purchase big ticket items where the benefit of buying tax free really makes an impact.
“We definitely check out bigger ticket items at the NEX before making a purchase anywhere else. Having no tax on an item that’s a few hundred dollars or more definitely has its benefits,” explains Hutts.
Matt Jogerst, NEX Lead Sales Tech, explains that though Apple products are price locked by the manufacturer, most other electronics will be 5 to 10 percent outside of the market price, and if a customer finds a better deal anywhere in town all they have to do is mention it. Bringing in an advertisement leads to an immediate discount. Just saying that you saw a lower price is also enough.
“If the difference is greater than five dollars, we’ll call the store for you and look it up right there. It’s a done deal,” Mathews says.
Even with such competitive pricing, families that live off base sometimes show reluctance in driving the extra miles and go through security to shop on base. One challenge that both stores face is getting the word out.
“Only so many people are allowed to shop here. So there are no ads in the Sunday paper, like the other stores. Navy families have to opt in, friend us on Facebook, create a military log in on our website, and sign up for email alerts. We can’t reach out as much as they can get to us. In some cases our hands are tied,” explains Mathews.
Families that are newly stationed in Bangor and Bremerton bases are given information about the savings on base during orientation. They are also encouraged to go online where they can access phenomenal deals on a growing number of products.
Mathews explains that the earliest NEX locations were run by military officers with no background in retail. They were tiny with no real assortment of products. Now the NEX is run by managers with strong backgrounds in retail and sales that push for more variety in the stores.
“We realize that people have a million places to shop. So we have to be competitive, better than all the other stores in the area. We have to continually evolve like any other business to bring those shoppers into our stores,” says Mathews.