The director of the Army & Air Force Exchange wants to permit all honorably discharged U.S. veterans to shop at the Exchange’s online stores to soften the blow of declining U.S. troop deployments abroad.
Exchange management have warned for years that continued draw downs of U.S. troops overseas would hurt its sales disproportionately because overseas military personnel spend a higher percentage of their income on base. In the fiscal year ended Feb. 2, 2013, the Exchange derived 32 percent of its $8.6 billion in sales overseas. Sales to Iraq, Qatar, Afghanistan and Kuwait declined 22.6 percent, or by $132 million, to $452.5 million from fiscal 2011 to fiscal 2012.
To mitigate the impact, Exchange Director and CEO Thomas Shull told the Associated Press last week he favors expanding access to shopmyexchange.com beyond active and retired military to 20 million honorably discharged veterans. Currently, only active military or vets with 20 or more years of service in the military can shop at the Exchange, which offers discounts of up to 25 percent on a wide range of national brands, including athletic and outdoor brands. Under Shull, the Exchange is now developing Nike shop-in-shops in some stores and offering more national brands online.
Exchange profits also have an impact on recreational spending by U.S. military personnel, because the Department of Defense reinvests about two-thirds of Exchange profits in youth services, recreation centers, golf courses and other amenities to improve the quality of life for U.S. military personnel. That amounted to $224 million in fiscal 2013, but only after the Exchange cut expenses by $50 million in response to sequestration and declining overseas sales.
The Exchange operated 131 main stores and 850 specialty stores on military installations in all 50 states and 30 countries in 2012, but was expected to close more overseas stores last year. It has yet to publish its financial results for fiscal 2014.