Exchange Record Earnings Keep the Benefit Strong
My wife and I are proud to be members of families with over 300 years in combined military service. As a result, I am passionate about honoring those who serve and doing right by them to preserve hard-earned benefits for future generations. One such benefit is the Exchange. Despite military resale serving the entire active-duty and retiree populations at a cost of only 0.2 percent of the Department of Defense budget, this benefit has faced a tumultuous past few years.
I am very excited to report that, as a result of the Exchange team’s hard work and the success of strategic initiatives, the organization achieved record earnings for 2015 of nearly $402 million. Equally as important, service members received a dividend of $236 million for Quality-of-Life programs. The remaining $166 million went towards facility upgrades or new stores including a brand new 270,000 square foot shopping center at Fort Hood and four updated stores at Forts Bliss, Carson, Campbell and Leonard Wood. So, as you can see, the Exchange benefit is as strong as ever, resulting in a better shopping experience for you and those who wear the uniform today.
Keeping the benefit strong requires a great deal of planning, strategy and execution. Since 2012, the Exchange has seen a pronounced decrease in its active-duty customer base – a 9 percent decline, which translates to more than 80,000 customers and their families. Troop drawdowns and reductions continued (and another 25,000 Soldiers are set to exit in the next two years), and we faced DoD budget constraints and increased competition outside the gate.
As a result, we’ve focused on improving shopmyexchange.com to give users the best shopping experience regardless of their location. We have placed on emphasis on providing the brands that our shoppers value such as Disney, Ashley Furniture and Michael Kors, growing name-brand shops in our malls and beefing up healthy options at our Expresses. We also forged relationships with movie studios including Disney, Sony and Paramount Pictures to show first-run movies in the continental United States for the first time in the organization’s history. At the same time, the Exchange reduced costs by optimizing the supply chain by finding ways to move merchandise to our stores more efficiently and decreasing overhead expenses.
The Exchange is one of the few government agencies to implement significant cost reductions while still improving service. It is my goal to ensure that continues. Not just for those of you that have served, but for those serving now and for future generations of Soldiers.
Thank you for your service to our country. It’s an honor to continue to serve you and your families.
Tom Shull, a former infantry company commander, is the first civilian to serve as Director/CEO of the Army & Air Force Exchange Service. Before coming to the Exchange, Shull served on the National Security Council staff in the Reagan White House and served as CEO for several renowned retailers and consumer goods companies.