Navy Exchange Service Command
update to NEREA
Robert Bianchi
Chief Executive Officer
Rear Admiral,
Admiral SC,
SC USN (Ret)
March 2012
The NAVSUP Enterprise
Agenda
¾ Strategic Outlook
¾ NEXCOM Branding
¾ Capitalization Projects
¾ Business Performance
¾ Service to our Warriors & Families
2
NEXCOM 2015 Strategic
g Plan
CNO Sailing g
Directions
NAVSUP NAVSUP
Strategic Guidance
OSD OSD
Health Mandate
SECNAV 21st
Century Sailor & Marine
NEXCOM Strategic Goals
Strengthen Navy Community Readiness
Deliver the benefit to Sailors and
their Families
Grow the benefit through sustainability
and continuous improvement
3
CEO Intent for 2012
¾ Delight our Customers to Create Advocates
¾ Take Care of our Associates, both Today and
Tomorrow
¾ Perform to our Financial Plan and Continually
Improve Business Processes
¾ Maximize Sailor Personal Readiness &
Strengthen our Navy Family Connection
¾ Collaborate with MWR, Military Resale Partners
and Navy Commands to Reduce Costs and
Increase Effectiveness
4
Our Navy Exchange… Caring, Committed, Connected
$3.0B
Sales
$58M
Active Duty, Retirees, Reservists, Guard, Family Members
to MWR (NEX + Ships Store)
Savings
23%
14,000 Associates Worldwide
26% Navy
Family Members
$
$500M in Navy
Family pockets
2.2
2 2 million
105
40
158 Navy
37 MSC
104
Total Navy
Eligible Shoppers
5
NEXCOM Branding Initiative
6
Heart and Soul
7
8
9
NEX & Navy Lodge Openings
10
NEX Norfolk
Grand
G
a d Reopening
eope
g June
Ju e 2011
0
11
NEX Norfolk
12
NEX Norfolk
13
NEX Arlington Uniform Store
Store
relocated
St
l
t d to
t Joint
J i t Base
B
Meyer-Henderson Hall in
temporary facility.
Store will move to permanent
location at MCX Henderson Hall
(3rd floor construction project).
14
Navy Lodge North Island
15
NEX San Diego Q-Mart
First NEX operating 24/7
16
NEX Naval Medical Center San Diego
• Expanded aisles for wheel chair access
• Lower fixtures for easier product accessibility and reach
A Hospital Corpsman
Third Class found
himself decorated on
the NEX wall.
17
Coming Soon …
NEX Bethesda
Nov 2012
Northeast Distribution Center:
Leased
L
d building
b ildi in
i Suffolk,
S ff lk VA
Summer 2012
18
18
FY13 Major
Construction Program
NEXCOM HQ Consolidation
*NEXCOM
Little Creek Main Store Renovation
North Island Main Store Renovation
J k
Jacksonville
ill M
Main
i St
Store R
Renovation
ti
*NTC Great Lakes “A” School Food Court
Corpus
p Christi Main Store Renovation
*Arlington Uniform Store (MCX addition)
*Bangor Package Store addition
Bahrain Main Store Reconfiguration
* New construction requires congressional approval.
Projects approved by MWR/NEX Board of Directors
19
Business Performance
20
NEX Financial Performance
NEX Annual Sales
$3,000
$2,000
Continued Annual
Sales Growth
… 3% overall growth
$1,000
$0
FY08 FY09 FY10 FY11 FY12
Plan
$ thousand
FY11 Preliminary
Sustained Profit levels
NEX Net Profit
$80
$60
$40
$20
$45M to MWR
(FY11)
$0
FY08 FY09 FY10 FY11 FY12
Plan
$ thousand
$ million
FY11 Preliminary
Retail Sales Steady in Current Economic Environment
21
NEX Metrics –
Customer Satisfaction Index (CSI)
Satisfaction Index (ASI)
Associate Satisfaction Index (ASI)
100
90
80
70
82 83 83
79 80 80
77 78
74 76 76
72 72
67 69 67 68 69 69
65 66
73
CSI
ASI
NEX Customer Satisfaction
rated high with consistent
improvement.
60
50
NEX Connections
Customers view NEX
as a strong element
of Navy life.
83
This NEX cares about the Navy community and culture
85
This NEX makes me feel like the Navy is committed to my family’s needs This NEX is a distinct and unique shopping experience
This NEX makes me feel connected to the Navyy
84
83
40
50
60
70
81
80 90
Customer Surveys Show High Satisfaction
22
2011 NEX CSI:
Exchange Comparison
g
p
85
NEX
80
MCX
75
AAFES
70
65
NEX
MCX
AAFES
2006
79
71
72
2007
80
72
73
2008
80
75
72
2009
82
77
74
2010
83
78
75
2011
83
78
76
NEX CSI results favorable to other Military Exchanges
23
NEX Customer Savings
Retailer
Prices are an average of
$500M In
23%
below competition
Navy Family
Pockets
(Including Sales Tax)
Bethesda
Everett
Great Lakes
Jacksonville
Norfolk
Pearl Harbor
Pensacola
San Diego
22.9%
23.6%
22 3%
22.3%
21.6%
22.3%
28 9%
28.9%
19.7%
23.2%
2011 Market Basket Savings survey
NEX Savings
7- Eleven
30.0%
Apple
A l Store
St
16.7%
16 7%
Best Buy
12.3%
CVS
26.3%
Dillard’s
Dillard
s
21 3%
21.3%
Home Depot
4.7%
JC Penney
36.4%
Kmart
21.9%
Kohl’s
31.6%
Macys
33.1%
Michael’s
65.3%
Nordstrom
20.6%
Office Max
32.8%
Sears
16.3%
Target
17.6%
Walmart
14.7%
24
Current Issues
¾ 21st Century Sailor & Marine (SECNAV initiative)
… Focus on Readiness,
Readiness Healthy living and Fitness
… Cigarette pricing parity NLT 1 Oct 12
¾ DoD / Gov’t Budget
… Sequestration cuts $1.2 Trillion; $500B from DOD over next
10 years
… Generates proposals for Exchange Consolidation
… Limited Federal pay raises provides scrutiny for NAF pay
¾ Gas Prices
… impacts consumer behavior & retailer costs
¾ Retirement Expenses
… Market & Discount rates impact annual expenses
25
g those who serve
Serving
26
Serving and Retaining
Navy
y Families
¾ Familyy Focused …
¾A-OK Program
¾Customer Appreciation Days
¾Celebrity Appearances
¾Homecoming Events
¾Health and Safety Awareness Programs
¾Joint Events with MWR / DeCA
¾Naples
p
Utility
y Payments
y
It’s About More Than Just the ROI
27
Employment
Initiatives
p y
p
p y
g
((MSEP))
¾ Militaryy Spouse
Employment
Program
¾ OSD effort to support spouse careers
¾ NEXCOM’s Continuity of Employment program ties with initiative
NEXCOM associates: 20% spouses & 26% military family members
¾ Shipmates
p
to Workmates p
program
g
¾ Navy effort to support transition of Sailors leaving military
¾ Ties in with NEXCOM’s focus on hiring veterans/wounded warriors
¾ Diversity: 68% NEXCOM associates are in minority
categories
28
Supporting
pp
g the Navy’s Mission
¾ Support to Navy Community
¾ 21st Century Sailor & Marine
¾
¾
¾
¾
¾
¾
¾
¾
¾
Initiative
Alcohol Deglamorization
Motorcycle Safety
S f
Disaster Response
NMCRS Support
Wounded Warrior Support
RECRUITCOM partnership
CHINFO Partnership
Navy Fitness
Navy Reading Program
Enabling the Navy’s Mission
29
Our Associates
… A tradition of Caring
g
Rui Kawahara and Yoko Tanaka,
NEX Sasebo,
Sasebo Japan
Jonathan
J
th Benites,
B it
NEX Nimitz Mini Mart,
San Diego, CA
Virgil Taporco, NEX Oceana, VA
30
Thank You For …
‘Your service to the Navy Family
‘Providing us feedback
‘K
‘Keeping
i connected
d with
i h NEX
‘Shopping at your NEX
‘B i a member
‘Being
b off th
the NEXCOM Team
T
31