1. DEFENSE COMMISSARY AGENCY Your Commissary … It’s Worth the Trip! DeCA Update American Logistics Association 67th Annual Convention Mr. Joseph H. Jeu Director Director October 28, 2014

2. Your Commissary … It’s Worth the Trip! Defense Commissary Agency 2 Why customers say, “The Commissary … It’s Worth the Trip!” A DeCA Video Presentation Taking Care of Military Families

3. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Budget update – DoD budget proposed a phased reduction of $200M in FY15, $600M in FY16, and $1B in FY17 – FY15 continuing resolution funds DeCA at FY14 level House, Senate rejected DoD’s legislative proposal – House NDAA directs study by an independent grocery expert on impact of budgetary proposal of commissary operations including the addition of private label items – SASC report requires a less detailed study than that requested by the House for submission to the MCRMC – House restored $100M and the Senate $200M in funding Political Landscape 3

4. Your Commissary … It’s Worth the Trip! Defense Commissary Agency FY14 Sales: $5.625 billion Momentum from last half of the year –Case Lot Sales re-instated –Monthly sales meetings –Guard & Reserve on-site sales FY14 Sales and Transactions 4

5. Your Commissary … It’s Worth the Trip! Defense Commissary Agency FY15 Sales Goal $5.8 Billion About 3% over FY 2014 Sales With your support – We Can Do It! 5

6. Your Commissary … It’s Worth the Trip! Defense Commissary Agency 6 Vision & Strategies – Set in 2012 New Vision – Understand our Customers and Deliver a 21 st Century Commissary Benefit Established Key Strategies – Study and support consumer shopping trends - leverage social media to gain insight into our evolving customers – Explore emerging concepts such as electronic and mobile commerce and other business model improvements – Employ new efficiencies in construction, technology and operations

7. Your Commissary … It’s Worth the Trip! Defense Commissary Agency I.D. Card Scanning Branding Study – Creates a “Commissary” culture – Improves standardization and consistency Social Media 7 Strategy – Manage Customer Relations

8. Your Commissary … It’s Worth the Trip! Defense Commissary Agency 8 Sales Flyer

9. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Commissary sells value brands at lower prices – Significantly lower prices than other national brands within commissary – Equal or lower prices than other retailers’ average in- house or private label brands DeCA plans to spotlight Value Brand – Easier to see on the shelves Strategy - Value Brand Program Re-energized 9

10. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Strategy - Health & Wellness Initiatives 10 The commissary is one of the most important tools you have for the health and well-being of the military in this country. – Senator Barbara Mikulski HBI/Better for You Natural & Organic Healthier Eating

11. Your Commissary … It’s Worth the Trip! Defense Commissary Agency CLICK2GO – Three locations (Fort Lee, Offutt AFB, Travis AFB) – Meeting pilot metrics Rewards Card – Continued acceptance and growth – Digital Coupons Commissary Apps Warehouse Format − Hybrid at Imperial Beach − Club Store in a Store at McChord AFB 11 Strategy – E&M Commerce and Store Formats

12. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Construction – Standard design – Lower cost construction alternatives – Third party construction study Technology – EBS/CARTS Operations – Store level efficiencies (Electronic Shelf Labels, SCO) – Commercial Activities contract reviews – Workforce Analysis 12 Strategy – Ongoing Efficiencies

13. Your Commissary … It’s Worth the Trip! Defense Commissary Agency New Construction Completed in 2014 New London, CT Surcharge Funded Opened April 16 13 Pittsburgh Area, PA Congressionally Funded Opened October 21 Gunter Annex, Maxwell AFB, AL Surcharge Funded Opened August 5 Annapolis, MD Surcharge Funded Opened September 10

14. DEFENSE COMMISSARY AGENCY Your Commissary … It’s Worth the Trip! Thank You! For your continuing support of our patrons and this benefit