Business View - November 2014 11
Shull said he is adamant that this proposal will not lead
to that — and has said “no” to recent talk about allowing
DoD civilians overseas to shop online.
Other sources have said the proposal is not a done deal,
and that AAFES still has difficult questions to answer
about how the proposal would help not just veterans,
but service members and their families.
AAFES must present its business case for the proposal
to the DoD Executive Resale Board. The next meeting of
the board has been delayed tentatively until the end of
November.
That business case is critical, one source said, because
if the idea is implemented and fails, there could be risks
to the exchange and harmful effects on other parts of
the military community, including the MWR system.
Shull, who has worked in the commercial retail indus-
try for 25 years, said he looks at ways to increase the
customer base from a retailer’s perspective. “That’s a
very commercial way of looking at this,” he said of the
proposal to let veterans shop AAFES online.
He noted that the current customer base is made up of
a finite number of active-duty, Guard and reserve mem-
bers and retirees that has been shrinking with the draw-
down of the military.
But it’s also a matter of extending a modest benefit to
veterans, including a number who have served multiple
tours in combat over the last 13 years, he said.
“What can we do, in a very modest way, to honor their
service that takes nothing away from active duty or retir-
ees?” Shull said.
He contends the move also would benefit the military
community, by increasing sales and providing more prof-
its that could be contributed to MWR programs, and to
improve brick-and-mortar stores.
Shull discussed the proposal as part of his plan to shore
up AAFES’ finances, and vowed to continue to provide at
least $200 million to MWR each year.
AAFES has reduced its costs by about $300 million a
year, including eliminating about 6,000 positions over
the last two years. Officials have reduced their expen-
ditures for shipping AAFES merchandise overseas from
$145 million a year when Shull arrived in 2012, to $100
million this year. Those overseas shipping costs, known
as second destination transportation charges, are paid
for by taxpayer dollars.
