1. DeCA West Update Scott E. Simpson Director, DeCA West

2. Do You Know Your Metrics?

3. As of May 07 Gain/LossPercentage Number In Tolerance Grocery - $ 9,858,753 - 0.56% 78/93 Meat + $ 151,380 + $ 151,380 + 0.10% 76/82 Produce + $ 173,259 + 0.11% 76/86 Overall - $ 9,534,115 - 0.46% Accountability Results DeCA West

4. As of May 07 Gain/LossPercentage Number In Tolerance Zone 6 - $ 2,434,355 - 1.52% 4/9 Zone 8 - $ 665,860 - $ 665,860 - 0.51% 7/9 Zone 9 - $ 644,772 - 0.27% 10/11 Accountability Results - Grocery Attending Zones

5. Accountability Results – Meat Attending Zones Gain/LossPercentage Number In Tolerance Zone 6 + $ 27,964 + 0.18% 8/9 Zone 8 + $ 14,583 + 0.12% 9/9 Zone 9 + $ 14,378 + 0.07% 10/11

6. Accountability Results - Produce Attending Zones Gain/LossPercentage Number In Tolerance Zone 6 + $ 3,488 + 0.33% 6/9 Zone 8 + $ 24,769 + 0.25% 8/9 Zone 9 + $ 41,340 + 0.21% 11/11

7. (Apr 07 Final) FY07 YTD Target FY07 YTD Actual Variance Expenses $ 239,060,821 $ 237,682,284 -$1,378,537 Sales$1,428,175,177$1,419,569,388-$8,605,789 Unit Cost 0.16740.16740.0000 Unit Cost – Target vs. Actual DeCA West

8. (Apr 07 Final) FY07 YTD Expenses FY07 YTD Sales Unit Cost Zone 6 - $ 642,564 + $ 4,224,510 - 0.0093 Zone 8 - $ 1,227,893 - $ 33,753 - 0.0088 Zone 9 - $ 986,116 - $ 3,378,604 - 0.0029 Unit Cost – Target vs. Actual Attending Zones

9. Current CCSS Scores Attending Zones Zone Score Delta from Region (4.55) Delta from DeCA (4.61) Zone 6 4.66 + 0.11 + 0.05 Zone 8 4.56 + 0.01 - 0.05 Zone 9 4.48 - 0.07 - 0.13

10. YTD FY06 YTD FY07 (April) % Change CONUS Zones 6, 8, 9, 15, 16, 18, and 19 $ 932,148,287 $ 934,792,070 + 0.28% OCONUS Zones 12, 13, 33, 35, and 36 $ 484,311,315 $ 484,939,775 + 0.13% Region $ 1,416,459,603 $ 1,419,731,844 + 0.23% Sales Comparison DeCA West

11. FY06YTDFY07YTDChange% Zone 6 $139,047,667$142,746,486 + 2.66% Zone 8 $139,316,052$139,939,513 + 0.45% Zone 9 $166,919,515$167,884,563 + 0.58% Sales Comparison Attending Zones

12. Why are metrics Important?

13. Best CONUS Super Store WINNER ‘04 & ‘05 AVG ‘06Sales UC AVG UC‘06Accountability G M P T CCSS(4.61) $ 69,649,539 $ 71,011,960.1176.1132 -0.06 0.25 0.25 -0.62 4.96

14. Best CONUS Large Store Runner Up ‘04 & ‘05 AVG ‘06Sales UC AVG UC‘06Accountability G M P T CCSS(4.61) $ 25,414,537 $ 26,848,895.1399.1335 0.01 0.08 0.20 -0.44 0.01 0.08 0.20 -0.444.67

15. Best CONUS Small Store Runner Up ‘04 & ‘05 AVG ‘06Sales UC AVG UC‘06Accountability G M P T CCSS(4.61) $ 7,540,675 $ 8,959,114.1786.1762 -0.57 -0.83 -1.01 N/A 4.63

16. Best OCONUS Large Store WINNER UC AVG UC‘06Accountability G M P T CCSS(4.61).0918.0832 -0.14 N/A N/A 0.43 -0.14 N/A N/A 0.434.73

17. Best OCONUS Small Store Runner Up UC AVG UC‘06Accountability G M P T CCSS(4.61).5858.5208 0.12 N/A N/A N/A 0.12 N/A N/A N/A4.81

18. Do You Know Your Metrics? Accountability Accountability All Departments All Departments Tobacco Tobacco Property Property Unit Cost Unit Cost CCSS CCSS Sales Sales

19. Because I Do!

21. Commissary Compliance Inspection (CCI) Results

22. FY06 Zone 6-9 CCI Scores STORE OVERALL IG SCORE Ellsworth AFB 94.9 Fort Carson 67.6 Minot91.6 Peterson AFB 83.7 USAF Academy 87.5

23. FY07 Zones 6-9 CCI Scores STORE OVERALL IG SCORE Fort Bliss 83.1 Fort Sam Houston 86.4 Lackland AFB 83.6 Laughlin AFB 66.0 Randolph AFB 80.3 Fort Sill 82.1 Tinker AFB 82.7 White Sands MR 64.2

24. RegionDirector’sView

25. Growing Sales... Know your competition StoreRanking# of Stores 2006 Sales (Billions) Wal-Mart Supercenters12,195$ 91.988 Kroger23,250$ 60.553 Safeway31,737$ 38.416 Supervalu42,531$ 35.200 Costco5487$ 31.841 Sam’s Club6567$ 24.278 Ahold USA7799$ 24.000 Publix8884$ 21.800 Delhaize America91,529$ 17.300 H-E-B10303$ 12.400

26. Growing Sales... Who shops Who shops Female Head of Household69% Female Head of Household69% Male Head of Household19% Male Head of Household19% Both11% Both11% Other 1% Other 1% Average number of shopping trips Average number of shopping trips 1.9 per week 1.9 per week Down from 2.1 in 2005

27. Growing Sales... What day consumers shop What day consumers shop Retail DeCA West Sunday21%14% Monday12%7% Tuesday12%15% Wednesday11%14% Thursday12%15% Friday14%17% Saturday18%18%

28. Growing Sales... What time consumers shop What time consumers shop Retail DeCA West 0800-120039%23% 1200-170038%55% 1700-210019%22% 2100-08004%0%

29. Growing Sales... Consumer Trends Consumer Trends Percent of sales by department Percent of sales by department 20002005Change Dry Grocery (Food)30.9527.00 - 12.8% Dry Grocery (Non-Food)8.777.94 - 9.5% GM/HBC (Includes Prescriptions) 10.6611.15 + 4.6% Perishable49.6750.12 + 0.9%

30. Growing Sales... Percent of perishable sales Percent of perishable sales 20002005Change Meat/Fish/Poultry14.3213.05 - 8.9% Service Deli 3.383.48 + 3.0% Produce9.7010.23 + 5.5% Baked Goods 3.153.21 + 1.9% In-Store Bakery 2.142.10 - 1.9% Dairy9.089.44 + 4.0% Frozen Foods 6.957.18 + 3.3%

31. Growing Sales... How a consumer spends a $100 How a consumer spends a $100 Perishables$50.10 Beverages $ 8.26 All other grocery, food $ 11.30 None-Food Grocery $ 7.94 Snack Foods $ 4.42 Main Meal Items $ 6.84 Health & Beauty Care $ 3.58 General Merchandise $ 4.38 Pharmacy $ 3.18

32. Growing Sales... Food expenditures as a share of disposable personal income Food expenditures as a share of disposable personal income At Home Away from Home Total 196014.13.417.5 197010.33.613.9 19809.04.213.2 19907.04.211.1 20005.84.09.9 20055.84.19.9

33. Growing Sales... Food Safety Food Safety 38% stopped purchasing certain foods 38% stopped purchasing certain foods spinach, lettuce, bagged salad, and beef High fuel and home-heating costs High fuel and home-heating costs 69% cook more and eat out less 69% cook more and eat out less 62% eat more leftovers 62% eat more leftovers 40% purchase fewer food items 40% purchase fewer food items 30% purchase more canned, frozen or boxed foods 30% purchase more canned, frozen or boxed foods 21% purchase more prepared meals from the store instead of eating out 21% purchase more prepared meals from the store instead of eating out

34. Growing Sales... One in five shoppers (19%) visit a store without planning One in five shoppers (19%) visit a store without planning Planning at category level not product level Planning at category level not product level Nature of meal patterns is changing Nature of meal patterns is changing Less likely to plan meals for the week Less likely to plan meals for the week Shoppers now have Shoppers now have Greater openness to new ideas Greater openness to new ideas Greater flexibility Greater flexibility Release from restrictive habit Release from restrictive habit Merchandising and in-store promotions need to respond to this spontaneous nature

35. Growing Sales... Meal Solutions and Niche-Marketing Meal Solutions and Niche-Marketing Delivering fresh, healthful, & convenient products Delivering fresh, healthful, & convenient products Hot-service Counters 89.2% Made-to-order Sandwiches 71.6% Separate checkouts/prep fds58.1% Sushi Stations52.9% Snack/juice/coffee bars50.0% Market niches Market niches Ethnic Foods 83.9% Natural/Organic Food 72.4%

36. Growing Sales... Meeting the competitive challenge Meeting the competitive challenge 98.8% of retailers are emphasizing perishable products 98.8% of retailers are emphasizing perishable products Meat, produce, prepared foods and deli/bakery Other areas of focus Other areas of focus Natural/organic products 84.1% Providing a unique shopping 74.4% experience Emphasizing patron wellness73.2% and family health Low prices 72.0%

37. Questions?