1. DEFENSE COMMISSARY AGENCY Your Commissary … It’s Worth the Trip! Non-Food Categories April 21, 2016

2. Nadja Stein DeCA STATE OF THE BUSINESS ANNUAL 2015

3. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 3 Win against Walmart in HBC Identify low conversion items in DeCA to increase basket Determine top UPCs for DeCA shoppers in Walmart and Grocery to drive assortment/promotion FOCUS DEPT RESOURCES INCREASE $ PER TRIP Increase in baskets by $2 can result in 3% sales increase Focus on converting Medium shoppers to Heavy shoppers DeCA OPPORTUNITIES Within key stores, alter merchandising for these groups Tailor promotions and communications on the digital platforms TARGET YOUNGER FAMILIES AND HISPANICS

4. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 4 BASKET DECREASE SIGNIFICANT Buyers / Shoppers (% Penetration) How much they buy / spend (Buying Rate) DeCA Total Sales How many times they buy it (Purchase Frequency) How much they buy on each trip (Purchase / Basket Size) X $879 (-$60.5 per HH per year) 13.9 trips/HH (-0.6) $63 per trip (-$2) Source: Nielsen Homescan 52 Weeks Ending 12/26/15 v YAGO, Total Product Line, DECA Shopper at DECA 2.6% (+0.1%)

5. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 5 DeCA SHOPPERS LOYAL TO THE MILITARY BASE Source: Nielsen Homescan 52 Weeks Ending 12/26/15 vs YAGO, Total Product Line DeCA SHOPPER SHARE OF WALLET BY CHANNEL +0.5 -0.3 Grocery and Supercenters make up over 40% of DeCA shopper SOW -1.2 +0.2 0.0 +0.2 -0.2 0.0

6. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 6 MILITARY CHANNEL TRIPS AND BASKET DOWN DeCA HHs $/trip at Supercenters has increased Source: Nielsen Homescan 52 Weeks Ending 12/26/15 vs YAGO, Total Product Line DeCA SHOPPER – CHANNEL PURCHASE DYNAMICS

7. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 7 WALMART IS DeCA’S LARGEST COMPETITOR Sam’s and Costco are a distant 2 nd & 3 rd ; Exchanges are steady RETAILER DeCA SHOPPER SOW Pt CHG YA WAL- MART TOTAL20.31.3 COSTCO5.40.2 SAM’S5.40.1 EXCHANGES ALL TYPES 3.3(0.5) TARGET TOTAL2.9(0.3) KROGER3.00.5 SAFEWAY1.80.5 HEB & HEB PLUS1.6(0.7) ALL OTHER36.3(0.5) +0.9 Source: Nielsen Homescan 52 Weeks Ending 12/26/15 v YAGO, Total Product Line, DECA Shopper DeCA SHOPPER – ALL OUTLET SHARE OF WALLET - 0.7

8. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 8 IN HBC, DeCA PATRONS SPEND ABOUT TWICE AS MUCH IN WALMART THAN IN COMMISSARIES IN GM categories, WMT gets almost 30% of our shopper’s dollars Source: Nielsen Homescan, SOW 2015 In Household categories, Commissaries are destination #1

9. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 9 DeCA HH SPEND AT WM DRIVEN BY $/TRIP DeCA HH spend at Costco driven by trips Source: Nielsen Homescan 52 Weeks Ending 12/26/15 vs YAGO, Total Product Line DeCA SHOPPER – BANNER PURCHASE DYNAMICS

10. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 10 FOCUS ON INCREASING BASKETS DeCA shopper trips on decline on Military Base, non military channel store count growth continues DeCA shopper base is stable DeCA increase in shoppers most likely softened basket size; opportunity to increase Heavy shoppers Increase of 0.4 Trips (assumes $63 per trip) Increase of $2/Trip (assumes 13.9 trips per year) OR +3% Sales Increase Source: Nielsen Homescan 52 Weeks Ending 12/26/15, Total Product Line

11. OPPORTUNITIES FOR DeCA IN HBC

12. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 12 FOCUS ON HBC AGAINST WALMART; DAIRY & PRODUCE AGAINST GROCERY CHANNEL DeCA SHOPPERS - DEPARTMENT SHARE OF WALLET- UPC CODED ITEMS Source: Nielsen Homescan, 52 weeks ending 12/26/15, Total US, DECA Shopper Department DeCA TOTAL GROCERY WAL- MART TOTAL Value of 1 pt SOW (MM) $(MM) Upside Against Grocery $(MM) Upside Against WM Bakery 20.237.623.2$3.7$64.3$11.1 Beauty Care 13.28.725.5$7.9$97.5 Dairy 26.237.619.4$13.2$149.9 Deli 25.337.516.5$1.9$23.1 Frozen Foods 27.036.319.0$10.6$99.0 Grocery 24.426.219.5$55.8$100.4 Health Care 11.912.222.8$8.0$2.4$87.7 Meat 29.333.521.1$4.8$20.2 Pet Food And Accessories 19.314.731.8$0.6$7.4 Produce 19.337.517.0$5.5$100.7 Total Product Line 20.124.320.3$136.2$572.2$27.2 Grocery

13. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 13 DeCA Shopper Buyer Conversion Source: Nielsen Channel Facts 52 WE 6/30/12, Publix RTA, Total Trips, UPC Sales Source: Nielsen Homescan 52 Weeks Ending 12/26/2015, DECA Shopper, Total US Item $/ Item tripPatron Savings Q4 Patron Savings vs XAOC: 25.2% BEAT WALMART ON THESE HBC ITEMS 4.7 23.6% 4.4 20.1% 7.8 27.2% 4.5 20.9% 9.0 16.3% 4.5 32.1% 10.4 29.7% 4.9 21.1% 3.8 27.0% 4.9 33.8%

14. DeCA SEGMENT OPPORTUNITIES

15. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 15 HEAVY SHOPPER GROUP CONTINUES TO DECLINE Source: Nielsen Homescan 52 Weeks Ending 12/26/15 (4 YEAR TREND) Total Product Line Buyer Distribution - 6.9% CAGR Are shoppers converting from Heavy to Medium and Medium to Light?

16. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 16 Nielsen Homescan ASP, Distribution of Shoppers, 52 weeks ending 12.26.15, HML at COMMISSARY HEAVY SHOPPERS SKEW TOWARDS LARGE HOUSEHOLDS Migration of Younger Bustling Families

17. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 17 OPPORTUNITY AMONG FAMILIES AND NON WHITE HOUSEHOLDS These groups either underperform in % $ versus % shoppers or underdeveloped

18. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 18 TARGET YOUNG FAMILIES WITH APPEALING NON- FOOD AND HBC ITEMS Source: Spectra Best Products Report, Younger Bustling Families, March 2016 Prioritize solutions for busy families on the go through merchandising and assortment Basket Building HBC NON FOOD CRÈME RINSES & CONDITIONERSMARKERS/PENS/PENCILS SANITARY NAPKINSDRINKWARE CONTAINER AND SET HAIR CARE AND FASHION ACC.KITCHEN CUTLERY AND FLATWARE PRE-MOISTENED TOWLETTESDISPOSABLE CUPS SOAP – SPECIALTYALUMNUM FOIL RAZORS DISPOSABLEBAGS – SANDWICH & FOOD STORAGE COTTON – SWABS/ROLLS/BALLS/APPLDISPOSABLE DISHES ADHESIVE BANDAGESFOOD STORAGE CONTAINERS ORAL HYGIENE BRUSHESSTORAGE AND SPACE MGMT SOAP – LIQUIDAIR/SPECIALTY FRESHENERS SHAMPOOBAGS – TALL KITCHEN

19. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 19 GI Gen Gen X Millennial Boomer Gen Next EACH GENERATION BECOMES MORE MULTICULTURAL Gen Next population, under age nine, already reaching the “tipping point” Source: Nielsen The Multicultural Edge: Super Consumers Rising March 2015 Report % U.S. Population

20. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 20 HISPANIC HOUSEHOLDS DRIVE $/BASKET AT WALMART AND GROCERY Source: Nielsen Homescan, 52 we 12/26/15, Total US, DECA Shopper groups % HHs% Dollars Dollars/HH Index$/HH DeCA $/Trip Walmart $/Trip Grocery $/Trip DeCA Shopper100 $879$63$40$28 DeCA Caucasian Shopper6365104$912$64$44$31 DeCA African American Shopper222196$845$63$29$23 DeCA Asian Shopper57119$1,047$59$41$23 DeCA All Other Races Shopper10875$657$64$44$30 DeCA Hispanic Shopper181689$785$60$47$32

21. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 21 Basket $ Size DeCA Shopper - 0.7 pts+ 1.3 pts-- $2+ $1 DeCA Caucasian -+ 2.3 pts- 1.1 pts- $3+ $3+ $1 DeCA African American + 1.3 pts- 2.5 pts+ 1.5 pts+ $7- $5+ $1 DeCA Asian -+ 1.1 pts+ 2.8 pts-+ $10+ $2 DeCA All Other Races - 6.0 pts+ 2.4 pts-- $11+ $3- $3 DeCA Hispanic - 4.6 pts+ 5.1 pts-- $9+ $9+ $3 WALMART GAINED SOW OF DeCA HISPANIC SHOPPERS Source: Nielsen Homescan, 52 we 12/26/15, Total US, DECA Shopper groups Chg in SOW Grocery Channel Walmart gained DeCA Hispanic SOW and larger baskets

22. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 22 HISPANICS REPRESENT A MAJOR SOURCE OF GROWTH FOR THE BEAUTY INDUSTRY Source: Nielsen Target Track. Total US Expanded All Outlets Combined. xAOC. Latest 52 Wks - W/E 2/20/16

23. Copyright ©2013 The Nielsen Company. Confidential and proprietary. 23 NEXT STEPS Drive increased $2 per trip spend at DeCA in store Identify categories with low buyer conversion and +$2 per item trip spend Leverage displays in store to cross promote items with high conversion categories with low conversion categories; focus on meal solutions Create recipe suggestions online that contain the high/low conversion categories; allow to download into shopping list Use social media to drive interest Focus investments In HBC against Walmart Identify key items driving DeCA shopper HBC trips at Walmart Target the Younger Bustling Families and Hispanics shoppers Create a bilingual social media alternative for Hispanic shoppers Ensure you have “Hispanic brands” in Hispanic designated stores…on display Leverage Facebook as gateway for communication Interconnect recipes on digital platform; link to YouTube to create an “online cooking series” Offer mobile coupons and downloadable shopping lists from website Embed offers within recipes and allow to download ingredients into shopping list

24. DEFENSE COMMISSARY AGENCY Your Commissary … It’s Worth the Trip! Paper & Laundry Ms. Rena Dial Category Manager

25. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Sales Tracker 25 Source: Nielsen, RDH – DeCA Worldwide, FYTD Week Ending 3/26/2016 Above categories make up 89.7% of total dollar sales in Paper & Laundry

26. Your Commissary … It’s Worth the Trip! Defense Commissary Agency $ Share & Patron Savings 26 Source: Nielsen, RDH; Patron Savings

27. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Strategies 27 Continual evaluation of categories – New innovation – Assortment refresh Promotions – End Caps – Wall of Value/Mass Displays – Pallet promotions Sales opportunities – Regimens – “Hot Deal” specials – Truckload sales

28. DEFENSE COMMISSARY AGENCY Your Commissary … It’s Worth the Trip! Pet & Household Mr. Darrell Clary Category Manager

29. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Sales Tracker 29 Source: Nielsen, RDH – DeCA Worldwide, FYTD Week Ending 3/26/2016 Above categories make up 91.4% of total dollar sales in Pet & Household

30. Your Commissary … It’s Worth the Trip! Defense Commissary Agency $ Share & Patron Savings 30 Source: Nielsen, RDH; Patron Savings

31. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Strategies 31 Business Reviews in Pet & Household – SKU optimization – New innovation – POG (maintain integrity) Capitalize on our competitive advantage – Expand Ultra Premium – New Club Pack offering – Pallet lifts

32. DEFENSE COMMISSARY AGENCY Your Commissary … It’s Worth the Trip! Baby, Health Care & Beauty Care Mr. LaRue Smith Category Manager

33. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Sales Tracker 33 Source: Nielsen, RDH – DeCA Worldwide, FYTD Week Ending 3/26/2016 Above categories make up 81.3% of total dollar sales in Baby & Health Care

34. Your Commissary … It’s Worth the Trip! Defense Commissary Agency $ Share & Patron Savings 34 Source: Nielsen, RDH; Patron Savings

35. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Strategies 35 Increase Natural/Organic assortment Diversify assortment to meet aging/demographics customers needs Fine tune special merchandising programs (i.e. seasonality racks/half pallets) Maintain value strategy in health aids (analgesics category) Conduct industry roundtable Baby/Health Care meeting in the Fall

36. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Sales Tracker 36 Source: Nielsen, RDH – DeCA Worldwide, FYTD Week Ending 3/26/2016 Above categories make up 92.8% of total dollar sales in Beauty Care

37. Your Commissary … It’s Worth the Trip! Defense Commissary Agency $ Share & Patron Savings 37 Source: Nielsen, RDH; Patron Savings

38. Your Commissary … It’s Worth the Trip! Defense Commissary Agency Strategies 38 Increase Natural/Organic assortment Increase Ethnic Beauty Care assortment Market segments/categories consistent with best in class retail stores Review sales opportunity to expand value items Offer multi-packs Conduct industry HBC Beauty roundtable meeting in the Fall

39. DEFENSE COMMISSARY AGENCY Your Commissary … It’s Worth the Trip! Industry Assistance

40. Your Commissary … It’s Worth the Trip! Defense Commissary Agency 40 Industry Assistance Patron Savings Product Availability Category Resets/POG Speed to Shelf Promotions F ACING THE F UTURE T OGETHER