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2009 ALA Conference/Food Show

Honolulu, Hawaii

Mr. Philip E. Sakowitz, Jr.,Mr. Philip E. Sakowitz, Jr.,Director and CEODirector and CEO

August 21, 2009August 21, 2009

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SavingsSavings+ +

ServiceService++

Foot TrafficFoot Traffic==

Sales

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Updated savings figures for commissary shoppers based on October 2008 USDA figures for retail grocery store food purchases consumed at home:

X 31.1% average savings =

– FAMILY of FOUR saves nearly $3,400 annually

– FAMILY of THREE saves more than $2,600 annually

– A COUPLE saves more than $2,100 annually

– SINGLES saves nearly $1,200 annually

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• Commissary Customer Satisfaction Index (CCSS)–Patron Satisfaction 4.61 (out of 5.0)

• American Customer Satisfaction Index (ACSI)–National average for commercial grocers: 76–DeCA’s score: 76

• FDA Recalls–Above average for commercial grocers

• Sustain Customer Savings–Benefit Value–Mandate: 30%–Actual: 31.1%

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• Contract provides customized world class customer service

training to all DeCA employees

• 1st Corporate training program ever

• Dale Carnegie Training will provide training

– 648 Classes – Some classes will be bi-lingual as needed

– Training dates: Aug 1 – Sep 30, 09

• Consistent with our Agency goals of providing great

customer service

• Builds on our strength of customer service

• Good for the Customers and Good for the Employees

– Significant for employees education and training

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Location Type Date

Richards-Gebaur, MO New Jan. 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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FY Location Grand Opening

2007 Chievres, Belgium Oct 2009

2008 New Orleans, LA Oct 2010

2008 Eglin, FL Dec 2010

2009 Fort Bliss, TX (BRAC) Jul 2011

2009 Fort Riley, KS (MILCON) May 2011

2009 Moody, GA Jul 2011

2009 Quantico, VA Aug 2011

2009 Fort Campbell, KY Oct 2011

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Area CustomerTransactions

Percent Change

East 40.1M + 1.5%Europe 10.8M - 1.2%West 42.0M + 2.5%Total 92.9M + 1.6%

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AreaCustomer

Transactions

Percent Change

East 34.8M + 1.86%Europe 9.5M + 3.79%West 36.2M + 1.12%Total 80.6M + 1.75%

•Data current thru Aug 9, 2009

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Area Dollar Sales

Percent Change

East $2.7B + 4.8%Europe $487M + 2.7%West $2.6B + 5.6%Total $5.8B + 5.0%

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Area Dollar Sales

Percent Change

East $2.4B + 4.2%Europe $393M + 4.5%West $2.3B + 2.9%Total $5.8B + 3.66%

•Data current thru Aug 9, 2009

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DeCA Has Improved Loyalty Among Their shoppers Compared to 2007, and WMSC

Has Slightly Declined

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

DeCA 2008 Annual State of the BusinessSource: Nielsen Homescan 2008 Cross Outlet Facts

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Guard and Reserve

On-Site Sales

Business Transformation

Corporate Communications Outreach Efforts

Partnerships/Cooperative

Efforts

Workforce

Development Commissary Construction/Build to Lease

InitiativesGoing Greener

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42% Subscribeto an RSS feed

TitleSocialMedia

85% Have watched video clips

65% Have uploaded photos

59% Have joined a social network

79% Of active usershave read a blog

55% Have started their own blog

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• Increased Focus on the Commissary Benefit Awareness

– Army Wives Talk Radio

– Operation Homefront

• Accolades Received“Thank you for having the man on from the commissary (Mr. Sakowitz). I have been married 10 months and I am 4 months pregnant. My husband and I have been looking for ways to cut backIn our expenses in anticipation of the baby's arrival. Neither me or Eric knew you could save somuch at the commissary. I remember you said on the air that you are the coupon queen but I didn'tknow that you used them at the commissary.”

“I went shopping last night at the commissary. WOW! I took my coupons, my shopping list and when I got home I had saved $14 in coupons and my total bill was $46 dollars less than Safeway! That is $92 a month we could have been saving all along!

There should be a big billboard on every base!”

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• FY 2008: 104 on-site sales generated – $4.5M in sales– 41,347 Guard & Reserve customers

• FY 2009: 169 on-site sales scheduled (150 goal)

– 136 events have been accomplished– $ 7.7M in sales – 71,107 Guard & Reserve customers

•Data current thru Aug 9, 2009

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• Conducted survey to identify stocking issues

– Focused on 33 top manufacturers– Targeted 3 Groups

1. Less than 10% support2. Between 10 & 20% support3. Over 20% support

• DeCA provided survey results to buyers/category managers– Use vendor stocking information as part of buying/item selection

process– Increase emphasis on manufactures responsibility– Scheduled future surveys to measure support changes

• Anyone over 20% will be required to meet with the Director on a plan of action to improve support

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• Working in partnership with Industry– Conduct meaningful dialogue and interchange of best business

practices and processes

– Synergistic effort builds supply chain alliances and provides vehicle for developing collaborative innovations

• Developing Industry Interchange Training Program– Excellence through integration of government/commercial processes

to drive new business models

– Facilitates integrated multidisciplinary training opportunities across core functional areas with international companies

– Key element of our Talent Development Program • 10 Industry Partners; 6–12 month assignments

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• Production & Distribution of “How to Conduct a Commissary Tour” DVD

– Distribute DVD to DeCA regions, military and civilian dietitians

• Continue to work with the DoD Nutrition Environment Enhancement Team for

health promotion and promotion of the benefit.

• Target dietitians in the War College

– Outreach about the benefit and health promotion

– The Navy Health Promotion Course

– The Air Force Health and Wellness Centers

• Kit will be available on www.commissaries.com

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• DeCA is a Federal partner in promoting USDA’s initiative to DoD community

• DeCA and its industry partners to promote healthier eating habits in commissaries

• Children, military members, seniors targeted for reminders on healthy eating options

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• OMB Memo, June 11, 2009, Planning for the President’s FY 2011 Budget and Performance Plan

• Administration’s Goal: Build a transparent, high-performance government capable of addressing the challenges of the 21st century.

Four deliverables from federal agencies:1. Identification of limited number of high-priority

performance goals2. Submission of the FY 2011 Budget3. Steps to reform agency hiring processes4. Steps to improve employee satisfaction and wellness

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• Audited Opinion of Financial Statements– Clean Audit Opinion — 7th straight year

• Internal Controls over Financial Reporting

– In Top three in DoD for FY 2008 Statement of Assurance for Internal Controls

• Commercial Services Mgt (formerly Competitive Sourcing)– "The Omnibus Appropriation Act prohibits funding A-76 during FY 2009."

• Constant Dollar Decline!

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800

900

1,000

1,100

1,200

1,300

1,400

Cost (Then Yr $) 1,019 1,011 1,053 1,094 1,123 1,165 1,203 1,202 1,263 1,280 Cost (FY 2000 $) 1,019 980 983 990 985 982 978 920 912 870

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09

FY 2000 Constant Dollars ($M)

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The

Economy

CompetitionDOD

Budget

Scrutiny

Relevance

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