Sales Update Mr. Randy Chandler

Your Text here Sales Thru 2 nd Qtr Versus LY Versus Goal +3.5% $2.86B +1.9% DeCA Sales

Your Text here Transactions Thru 2 nd Qtr # Versus LY % Change +275K 45.8M +0.6% DeCA Transactions

Eastern Region Sales $1.28B (+4.5%) $.24B (-.3%) $1.34B (+3.3%) All Figures Thru 2 nd Quarter European Region Western Region Regional Results

Eastern Region Transactions 20.7M (+1.6%) 5.3M (-3.3%) 19.8M (+.6%) All Figures Thru 2 nd Quarter European Region Western Region Regional Results

Your Text here Sales Up Prices Up* Real Growth 2.1% 3.5% 1.4% DeCA Middle Innings Savings Hold Steady Include produce and meat growth = 1.7% CONUS 6 month

Europe

Far East

West

East

The End of Cheap Food? Healthcare Costs Oil Price Surge Weak Dollar Drought in Grain Areas 6 years of drought in Australia Flooding in Argentina Demand Beef consumption in China has doubled since 1980 Impact of Ethanol

Water It takes 450 lbs of corn to produce enough ethanol to fill an SUV gas tank It takes 800 gallons of water per person per day to produce daily food intake Corn 1,500 gls water = 1lb beef 7 lbs corn = 1lb beef 2.5 lbs corn = 1lb poultry Sustainability

Consumer Impact FMI Trend Reports 71% increase home cooking frequency Meals up 4.9 per week 67% buying fewer luxury items 60% buying more store brands Value Will Be Focus Fewer Trips to Secondary Stores Fewer Trips = STOCK UP

Sales Directorate (PS) Michelle Frost, Chief Semi-Perishable

Developing staff office for Guard/Reserve support Serves as single POC for store support from HQ Logistics Human Resources Communications/IT Second destination transportation Equipment Develop a “Virtual” solution for guard sales Internet ordering – on site payment first step Develop total internet solution - include pre-payment Expand Benefit Access G/R

Category Reviews Six Reviews Completed YTD Two Reviews Currently Underway One More Scheduled 3 Reviews Pending Currently Developing Next Years List

Promotions Total Items Published Reduced by 21% Easier management at store Increased SKU Performance Dollars per SKU up 5% Units per SKU up 7% Increase Pallets/Shippers Incorporate Club Packs Averaging $6.8 million per month $2 million per month increase Seasonal Sales + $9 million

Front End Racks Fixtures Have Been Selected Currently: Developing Stock Assortment Surveying Stores to Determine Type of Fixture 60 Days to Manufacturer Equipment Phased Implementation Beginning September

Plan-o-grams Today all store use standardized plan-o-grams Based on historic sales patterns Specific sets based on store class size No factor included for lost sales Plan-o-gram for the “Future” Pre-position space for growth categories Refine assortments in declining categories Re-configure flow to maximize allocation efficiencies Test concept at Ft Bragg North On track for early summer implementation Measure incremental impacts

Analyze Data Review Site Build Store Plan - Analyze demand - Adjust for volume sold on display - Plan-o-gram specific shelf objectives - Analyze demand - Adjust for volume sold on display - Plan-o-gram specific shelf objectives - Map flow of sales area - Align categories to build affinities - Assure growth can - Map flow of sales area - Align categories to build affinities - Assure growth can - Make needed adjustments - Plan/organize reset - Measure results - Make needed adjustments - Plan/organize reset - Measure results The Ft Bragg Project

Environmental Initiatives (Retail) Reusable grocery bags sold starting 10/30/2007 Status: Over 1,007,000 sold thru 05/14/2008 AFN Video on commissary reusable bags shown in Europe Compact fluorescent light (CFL) bulbs, FY 08 Goal: 1 Million Status: Over 733,000 sold FYTD – thru 05/14/2008 Smart-Way Transport Program (EPA Partnership) Status: 12 DeCA Transport Partners now participate Notice to Trade about program published 01/29/2008 Focused on “Green” Efforts

Environmental Initiatives (Retail) - Earth Friendly Days Promotion featuring Go Green products Status: April 17-30, 2008 Promotion implemented Coincides with Earth Day (April 22) and Arbor Day (April 25) Green Clean, Recycled and Biodegradable Products Status: Number of items has almost tripled over last 12 months Organic Products Status: Sales up 40% (Apr–Mar over prior year) 24.0m to 33.5m Selection up 39% in last 12 months – from 460 to 641 Focused on “Green” Efforts

NIB – People Helping People NIB Sales Top $14M in Most Recent 52 Weeks Traditional Skilcraft Brands - $9.0M Impulse Programs Add $5.1M