1. Navy Exchange Service Command

2. Navy Exchange Dual Mission
Providing Sailors and Navy Community Quality Goods and Services at a Savings
Supporting Navy Quality of Life Programs
“The creation of supplemental source of funding for the military MWR Program is to be considered a secondary mission when establishing pricing”
- DoD Instruction
Our Navy Mission is codified within DoD Directives.
In an early speech, ADM Mike G. Mullen, Chief of Naval Operations said, “I am really convinced that family readiness, in great part, lies at the heart of Fleet readiness.”
We believe this is particularly important for our Navy family who endure long deployments. We are focused to be more than just a store for the Navy spouse and family left behind as the fleet sails.
DoDD states “Armed Services exchanges have the dual mission of providing authorized patrons with articles of merchandise and services and of generating NAF earnings as a source of funding for DoD military programs.”
Merchandise Pricing. ASER says, “Merchandise and services sold through the Armed Services exchanges, whether by direct or concession sale, should be priced in a substantially uniform manner at the lowest practicable level consistent with the mission to provide authorized patrons with articles and services necessary for their health, comfort, and convenience. The creation of a supplemental source of funding for the military MWR program is to be considered a secondary mission when establishing prices.”
A Critical Non-pay Benefit for the Navy Family

3. $2.7B $43M 23% Our Navy Exchange… Caring, Committed, Connected
Sales
$43M
Active Duty, Retirees, Reservists, Guard, Family Members
to MWR
23%
27% Navy
Family Members
Savings
14,000 Associates Worldwide
2,257,738
Total Navy
Eligible Shoppers
160 Navy
37 MSC
104 42
104

4. 2011 Store Performance - Total
Segment
Sales
% of Sales
‘11 Sales
Growth
’11 GM%
‘10 GM%
GM $
Variance
Main
$1,295.5M
63.8%
2.8%
23.02%
23.40%
+3.2M
Small
$351.2M
17.3%
3.2%
26.05%
25.93%
Specialty
$353.5M
17.4%
4.9%
26.96%
26.95%
+4.5M
Total
$2,030.0M
100.0%
+3.2%
23.96%
24.20%
+10.9M

5. Consumables: Candy, Food, Tobacco, Beverage, Spirits
2011 Store Performance
Consumables: Candy, Food, Tobacco, Beverage, Spirits
Segment
Sales
% of Sales
‘11 Sales Growth
FY 11 GM%
FY 10 GM%
GM$
Variance
Main
$181.8M
34.8%
+0.9%
23.71%
24.21%
-500K
Small
$232.2M
44.4%
+4.4%
27.43%
27.34%
+3M
Specialty
$100.4M
19.2%
+8.2%
26.39%
26.17%
+2.2M
Total
$523.1M
100%
4.0%
25.53%
25.65%
$4.5M

6. CANDY & NUTS DEPARTMENT SUMMARY
May 2-4, 2011

7. CANDY & NUTS DEPARTMENT SUMMARY
Opportunities:
Power Wing Shippers (Power Panels) One-time Buys
Seasonal Candy- 4 Main Seasons- Huge Business trending at about 20% of total
Innovation in Nuts/Trail Mix for One-time Buys
Main Store Customer- Seasonal, Larger Pack Sizes
Mini-Marts- Convenience, single packs- instant consumables

8. DRY GROCERY, SNACK, AND PERISHABLES FY 2011
GROCERY, SNACKS, & PERISHABLES DEPARTMENT SUMMARY
DRY GROCERY, SNACK, AND PERISHABLES FY 2011
Sales $
Sales $ LY
% Sales $ vs LY
Sales Units
Sales Units LY
% Sales Units vs LY
Total
76,298,913
70,499,461
8.23%
35,212,487
33,977,623
3.63%
SNACKS
50%
22,983,793
20,546,127
11.86%
10,997,749
10,588,752
3.86%
DRY GROCERIES
47%
21,574,334
20,360,673
5.96%
11,668,374
11,204,711
4.14%
OTHER GENERAL GROCERY 0%
201,905
219,109
(7.85%)
113,602
90,901
24.97%
SEASONAL FOODS 3%
1,483,381
1,160,178
27.86%
282,758
204,723
38.12%
61%
46,243,413
42,286,087
9.36%
23,062,483
22,089,087
4.41%
FROZEN
48%
12,365,979
12,013,774
2.93%
4,656,245
4,660,680
(0.10%)
CHILLED
37%
9,628,422
9,181,741
4.86%
4,443,423
4,446,855
(0.08%)
PRODUCE 4%
1,072,217
913,350
17.39%
765,702
647,271
18.30%
FRCUT FISH/POULTRY 1%
207,640
97,926
112.04%
28,576
15,991
78.70%
FRCUT BEEF
137,808
77,510
77.79%
16,323
7,601
114.75%
FRCUT PORK
55,903
36,619
52.66%
5,033
2,849
76.66%
OTHER PERISHABLE 9%
2,431,003
2,169,143
12.07%
1,047,378
1,003,938
4.33%
34%
25,814,734
24,425,195
5.69%
10,927,551
10,750,905
1.64%
0.1%
84,238
64,868
29.86%
35,129
34,280
2.48%
PREPARED
100%
4,156,529
3,723,311
11.64%
1,187,324
1,103,351
7.61% 5%

9. GROCERY, SNACKS, & PERISHABLES DEPARTMENT SUMMARY
Mini Mart and Fleet:
Impulse and immediate consumables focused
Grocery and Housing:
Focus on both grocery and convenience with depth
of core grocery items
Seek :
Innovation
Convenience packaging
One time buy opportunities
Power Wings / Panels
Shippers
Top Locations and Segmentation
Total
Sales $
Sales $ LY
% Sales $ vs LY
76,298,913
70,499,461
8.23%
NEX FACILITY BAH
GROCERY 9%
7,070,633
6,091,440
16.07%
ORLANDO MCCOY ST 6%
4,744,721
4,437,989
6.91%
PEARL HARBOR MALL
MAIN 3%
2,177,427
2,027,116
7.42%
GUAM HOSP MM/GAS (6)
HOUSING 2%
1,447,870
1,179,308
22.77%
GREAT LKS STUDENT ST
FLEET
1,310,801
1,500,584
(12.65%)
PEARL HOLOMOKU MM
1,212,399
1,139,267
6.42%
PEARL HALSEY MM
1,202,025
1,218,743
(1.37%)
SAN DIEGO MURPHY MM
1,145,917
1,137,751
0.72%
PENSACOLA FLEET ST 1%
1,132,589
1,067,647
6.08%
SINGAPORE MAIN ST
1,116,711
975,116
14.52%
NEX ROTA GATEWAY MAL
1,067,622
987,907
8.07%
SAN DIEGO QMART CLSD
1,048,210
1,550,016
(32.37%)
S DIEGO QUICK MART
1.8%
1,381,907 NA
YOKO MAIN STORE
986,317
1,024,436
(3.72%)
NORF AIR STATION MM
MINI MART
969,698
699,331
38.66%
GUAM NCTS MAIN (20)
900,618
693,463
29.87%

10. Partners Delivering Qualify of Life
MWR and NEX
Partners Delivering Qualify of Life
CNO
Senior Navy
Leadership Balances
Programs
Joint
MWR/NEX BoD
Strategic Direction
Financial Goals and
Objectives
Profit Distribution
Joint Base Events
Name Brand Food
Telecommunications/ Internet
Internal Audit Support
Wounded Warrior Support
NEX
Net Profit
30%
NEXCOM
Share
70%
MWR
Share
100% NEX Profits
Support Sailor Programs
Construction/Renovations
Information Systems
Equipment
25% To
Installations
Connection More Than Dividend Distribution

11. Unique NEX Strategy Overlaps into Four Major Retailing Segments
Discount Mass Retailer
Wal*Mart, Target,
Kohl’s, TJ Maxx, Clubs
Department Stores
and Specialty
Macy’s,
Penney’s, GAP,
Coach, Limited
NEX
Focused Discounter
Home Depot, Best Buy, Sports Authority
C-Stores
7-11, WAWA,
Sheetz,
am pm
No Other Retailer does what we do!
Any other retailer would only focus on one area
Due to our diverse customer base, we must try to offer each area 11 11 11

12. Navy Exchange Customer
New to the Navy, single, male and enlisted, they have disposable income they spend mainly on themselves. Brand name oriented and generally not price sensitive.
Married and single active duty enlisted, no children, primarily 18-44, not price sensitive; brand and style conscious. Live off base or in on-base housing.
Active Duty married and single with children, primarily Limited disposable income, working to make ends meet with family needs.
Retired from the military, almost all Receiving multiple retirement incomes . Half do not have children living at home. Seek quality and value and are above average spenders.
Retired, Receiving military retirement and social security. Loyal to shopping at the Exchange. Many have significant disposable income and prefer high quality and brand names.

13. NEXs Operate Differently from Commissaries
Commissaries are subsidized with taxpayer dollars that pay salaries and operating costs
NEXs operate like civilian retailers … profits must pay salaries, insurance, retirement benefits, the cost of renovating and building new stores and purchase inventory

14. Exchanges & Commissaries
Navy Exchange
Commissary
Non-appropriated fund program (NAFI)
Self-supporting except overseas transportation costs
Prices included markup to cover operating expenses and provide MWR dividend
Broad assortment
Appropriated fund program
Operating costs supported by taxpayers
Prices based on cost plus 5% surcharge
Limited non-food assortment

15. Social Connection
Facebook
YouTube Video
Twitter
Digital Flyer 15

16. Social Media 124,145 Likes 580,000 Flyer Sign-Ups
310,000 Sign-Ups
27,000 Text Message Sign-Ups
Demographics:
56% Female
44% Male
26% Ages 18-24
27% Ages 25-34
20.3% Ages 35-44
46 Countries
46 Languages

17. Vendor Community-Points of Interest
NEX Offers:
A unique channel of trade to try different ideas and offers
A trading partner that is not going out of business
An A-1 Credit Rating
An outstanding repeat clientele
A customer base that develops lifetime brand loyalties during their time in service.

18. It is the men and women that serve our country!
Bottom Line Is………
If ANYONE deserves the NEWEST PRODUCTS, the BEST DEALS, the BEST SERVICE, and SPECIAL CONSIDERATIONS…
It is the men and women that serve our country!
YOU play an important role in delivering this to our customers!!!