BONNIE A. KANITZ

DIRECTOR, DeCA EAST

July 11, 2007

DeCA EASTSALES UPDATE

FY06 SalesFY06 SalesACV %ACV % SalesSales % %

ChangeChangeTransactionsTransactions

% Change% ChangeAverage Average Sale % Sale %

DeCADeCA 100%100% 5.417B5.417B 0.9%0.9% -2.1%-2.1% 3.0%3.0%

EastEast 46.6%46.6% $2.526B$2.526B 1.9%1.9% -1.2%-1.2% 2.9%2.9%

EuropeEurope 8.7%8.7% $ .470B$ .470B -3.8%-3.8% -5.0%-5.0% 1.3%1.3%

WestWest 44.7%44.7% $2.420B$2.420B 1.0%1.0% -2.1%-2.1% 3.2%3.2%

DeCA East achieves over $2.5B in sales

for 2006!!

FYTD 07 (October 06 – May 07) SALESFYTD 07 (October 06 – May 07) SALES

LocationLocation SalesSales% %

ChangeChangeTransactionsTransactions

% Chg% ChgAverage Average

Sale % Sale %

DeCADeCA $3.676B$3.676B 1.8%1.8% -1.0%-1.0% +2.9%+2.9%

DeCA DeCA EastEast $1.725B$1.725B 2.9%2.9% -0.1%-0.1% +2.9%+2.9%

Zone 21Zone 21 $75.2M$75.2M -1.2%-1.2% -4.9%-4.9% +3.9%+3.9%

Zone 23Zone 23 $77.5M$77.5M 0.4%0.4% -1.2%-1.2% +1.6%+1.6%

Zone 24Zone 24 $198.0M$198.0M 3.7%3.7% +0.2% +0.2% +3.4% +3.4%

Zone 25Zone 25 $164.2M$164.2M 1.3%1.3% -1.4%-1.4% +2.7%+2.7%

MAY 2007 RESULTSMAY 2007 RESULTS

REGIONREGION CASESCASES DOLLARSDOLLARS %%

EASTEAST 1,042,826 1,042,826 $ 7,084,161$ 7,084,161 56.756.7

EUROPEEUROPE 61,046 61,046 $ 775,105$ 775,105 6.2 6.2

WESTWEST 721,793 721,793 $ 4,632,153$ 4,632,153 37.137.1

GRANDGRAND

TOTALTOTAL 1,825,6651,825,665 $12,491,420.01$12,491,420.01

All time record for May Worldwide Caselot SalesAll time record for May Worldwide Caselot Sales 1.6% increase over the Worldwide Caselot Sale in May 20061.6% increase over the Worldwide Caselot Sale in May 2006

Fort DrumFort Drum

1010thth Mountain Division has 4 brigades. Three are Mountain Division has 4 brigades. Three are stationed at Fort Drum; one is stationed at Fort Polk.stationed at Fort Drum; one is stationed at Fort Polk.

A brigade from Fort Drum returned from extended A brigade from Fort Drum returned from extended deployment in June from Afghanistan.deployment in June from Afghanistan.

Another brigade from Fort Drum, (originally scheduled to Another brigade from Fort Drum, (originally scheduled to return home in June), was extended until late September.return home in June), was extended until late September.

The brigade returning in September from an extended The brigade returning in September from an extended tour in Iraq will be replaced by a brigade at Fort Drum.tour in Iraq will be replaced by a brigade at Fort Drum.

Next Spring, another Fort Drum brigade will return to Next Spring, another Fort Drum brigade will return to Afghanistan. This will leave only one brigade at Fort Afghanistan. This will leave only one brigade at Fort Drum.Drum.

• FORT DETRICK

NEW CONSTRUCTION $13.5M 34,210 SQUARE FEET CONSTRUCTION START DATE: SEP 06 PROJECTED COMPLETION DATE: JAN 08

• FORT DRUM

ADD/ALT PROJECT $19.2M 82,800 SQUARE FEET PROJECT START DATE: JUL 07 COMPLETION DATE: MAR 09 MAJOR ELEMENTS:

o SMALL ENTRANCE ADDITIONo COMPLETE RENOVATION TO CURRENT DeCA STANDARDS AND LAYOUT

• SARATOGA SPRINGS

NEW CONSTRUCTION (REPLACES SCOTIA) $7.1M 22,400 SQUARE FEET START DATE: DEC 07 PROJECTED COMPLETION DATE: NOV 08

• TOBYHANNA

ARCHITECTURAL & REFRIGERATION UPGRADE $3.6M START DATE: SEP 06 PROJECTED COMPLETION DATE: OCT 07 MAJOR ELEMENTS:

o SALES AREA UPGRADEo REPLACE REFRIGERATION EQUIPMENT & DISPLAY CASESo UPGRADE MEAT MARKETo MISC. REPAIRS

Impact of closing locations: (BRAC

2005)• Commissaries affected: 6 Stores

• Fort Monmouth, NJ

• Fort McPherson, GA

• Fort Gillem, GA

• CE Kelly Support Center, PA

• NSCS Athens, GA

• NAS Brunswick, ME

• FY 2006 Sales: $65.5M

• FY 2006 Surcharge: $3.3M

• Depreciated value of assets: $9.1M

• Employee authorizations: 195

• Brunswick

FYTD 07 Sales (May 31) +2.4 $176,058

FY 09 there will be a 50% draw down in active duty members due to Squadron deployments that are not returning to Brunswick.

Attitude is everything! Brunswick has become one of the best Attitude is everything! Brunswick has become one of the best “Team Stores” in the zone. All managers and staff approach their “Team Stores” in the zone. All managers and staff approach their jobs as if they are getting a new store in 4 months and will all jobs as if they are getting a new store in 4 months and will all receive grade increases versus actually closing in 3 years due to receive grade increases versus actually closing in 3 years due to BRAC.BRAC.

• C. E. KellyC. E. Kelly

FYTD 07 Sales (May 31) – 6.2% FYTD 07 Sales (May 31) – 6.2% ($322,734)($322,734)

Extensive BRAC media coverage.Extensive BRAC media coverage.

All installation activities, i.e. PX, Gym, have All installation activities, i.e. PX, Gym, have reduced operating hours. This limits the amount of reduced operating hours. This limits the amount of traffic to the Post and Commissary.traffic to the Post and Commissary.

• Fort MonmouthFort Monmouth

FYTD 07 Sales (May 31) – .13% FYTD 07 Sales (May 31) – .13% ($10,724)($10,724)

Curtailment of operational hours at some facilities Curtailment of operational hours at some facilities located on baselocated on base

Tours by interested parties regarding purchase of the Tours by interested parties regarding purchase of the Fort Monmouth property continueFort Monmouth property continue

Customer base is primarily retired, senior Customer base is primarily retired, senior citizenscitizens

#1 Aggressive merchandising program#1 Aggressive merchandising program Focus on perimeter departments - - quality, Focus on perimeter departments - - quality,

availability, service, & maximum savingsavailability, service, & maximum savings

Set expectations - perimeter always comes first Set expectations - perimeter always comes first

Meat – cut all that you can cut, major push to eliminate Meat – cut all that you can cut, major push to eliminate

case ready on principle cuts - - maximizes customers case ready on principle cuts - - maximizes customers

savingssavings

Meat Truckload / Seafood Road Shows - - aggressively Meat Truckload / Seafood Road Shows - - aggressively

stomped unauthorized installation competitionstomped unauthorized installation competition

Focus on perimeter departments (cont)Focus on perimeter departments (cont)

Produce – emphasis on merchandising and qualityProduce – emphasis on merchandising and quality

Deli/Bakery – focusing on improving as it is a “real” Deli/Bakery – focusing on improving as it is a “real”

departmentdepartment

Aggressive indexing of categories & MBU program

compliance

Case lot/truck load sales/side walk sales –

continuous special outreach events

Club pack program endorsed and promoted Club pack program endorsed and promoted

Summer and Winter 06 Summer and Winter 06

#2 #2 Focus on leadership with four “E’s & P”Focus on leadership with four “E’s & P”

in every storein every store

EEnergynergy

EEnergizenergize those around youthose around you

EEdgedge (able to make those tough decisions)(able to make those tough decisions)

EExecute xecute & & PPassionassion

Building strong teams to execute Agency vision Building strong teams to execute Agency vision

and programsand programs

#3 Focus on weekend vendor stocker #3 Focus on weekend vendor stocker

supportsupport

Do you really know what yourDo you really know what your

support is on the support is on the

weekend?weekend?

One Store, One 300K One Store, One 300K Super Bowl Saturday Sales Super Bowl Saturday Sales

Opportunity Opportunity Friday, Saturday, Sunday = Friday, Saturday, Sunday =

60-65% Sales60-65% Sales Friday = Vendor Admin Friday = Vendor Admin

DayDay Saturday/Sunday – poorest Saturday/Sunday – poorest

days for Vendor Stockingdays for Vendor Stocking Who’s watching the Hen Who’s watching the Hen

House?House?

Days Results 285K in sales = missed target goal!

Rank Date Net Sales Event1 1/31/2004 $26,032,612 Super Bowl

2 2/3/2007 $26,029,117 Super Bowl

3 11/18/2006 $25,255,742 Thanksgiving

4 2/2/2002 $24,835,463 Super Bowl

5 11/19/2005 $23,802,452 Thanksgiving

6 11/17/2001 $23,765,390 Thanksgiving

7 2/4/2006 $23,571,575 Super Bowl

8 3/3/2001 $23,308,730 Pay Day

9 7/1/2005** $23,169,867 July 4th

10 12/30/2005** $23,125,009 New Year's Eve

11 9/2/2006 $23,100,835 Labor Day

12 12/2/2006 $22,896,133 Pay Day

13 11/20/2004 $22,860,682 Thanksgiving

14 9/30/2006 $22,638,613 Pay Day

15 2/3/2001 $22,616,317 Pay Day

** Friday, All other dates Saturday

DeCA Missed Top Sales Record DayDeCA Missed Top Sales Record Day by by $3K $3K on Feb 3on Feb 3rdrd!!

1)1) Program Weekend Checks on Service LevelsProgram Weekend Checks on Service Levels

2) Fix Vendor Stocking Support on Weekends2) Fix Vendor Stocking Support on Weekends a) Separate Team for Fri, Sat & Sunday?a) Separate Team for Fri, Sat & Sunday? b) Pay Hourly – NOT BY ROLL-UP!b) Pay Hourly – NOT BY ROLL-UP!

DeCA WILL PAYDeCA WILL PAY OVER OVER $104,000$104,000 TO CONTRACTORS TO CONTRACTORS

TO STOCK VENDOR CATEGORIES FROM JUST TWO STORES !TO STOCK VENDOR CATEGORIES FROM JUST TWO STORES !

Fort Meade (Class 5)Fort Meade (Class 5)

43,208 cases and $25,064 paid to the contractor FYTD 0743,208 cases and $25,064 paid to the contractor FYTD 07

Average cases 5,401/monthAverage cases 5,401/month

Average cost $3,133/month (equates toAverage cost $3,133/month (equates to $37,596 annually!)$37,596 annually!)

Hanscom (Class 3)Hanscom (Class 3)

Estimated Frozen Food Cases Stocked & Cost Per MonthEstimated Frozen Food Cases Stocked & Cost Per Month

7,296 cases and $5,584 paid to the contractor7,296 cases and $5,584 paid to the contractor

Equates toEquates to over $67,000 annually over $67,000 annually

• A weekend vendor stocking test program was initiated by A weekend vendor stocking test program was initiated by Kraft Foods Military effective March 30, 2007 in 43 DeCA Kraft Foods Military effective March 30, 2007 in 43 DeCA East stores.East stores.

Additional stocking support is being provided to selected CONUS Additional stocking support is being provided to selected CONUS stores for enhanced weekend coverage.stores for enhanced weekend coverage.

Labor supplement covers mid-morning to late afternoon in test stores, Labor supplement covers mid-morning to late afternoon in test stores, maximizing sales opportunities for all operating hours.maximizing sales opportunities for all operating hours.

Incremental shelf replenishment orders are considered to capture Incremental shelf replenishment orders are considered to capture missed consumption, and matched with the level of incremental missed consumption, and matched with the level of incremental support provided on a store by store basis.support provided on a store by store basis.

• Results are favorable and have proven in most instances Results are favorable and have proven in most instances to capture sales that were previously lost due to NIS to capture sales that were previously lost due to NIS conditions.conditions.

• Kraft, Nestle, Webco, and Sarvis now on board in select stores with payday weekend support!

• Other brokers and manufacturers are expressing interest and making inquiries regarding participation.

SARVIS

A “WIN-WIN” PROPOSITION!

Kraft Vendor Stocking Enhancement Test

  FRIDAY-MONDAY FRIDAY-MONDAY

TOTALSTOTALS YTD TRENDSYTD TRENDS

PARTICIPATING STORES:PARTICIPATING STORES:(ZONES 21, 23, 24 & 25):(ZONES 21, 23, 24 & 25): TYTY ChgChg % Chg% Chg YTD CHGYTD CHG YTD CHANGEYTD CHANGE

FORT BELVOIRFORT BELVOIR $84,196$84,196 $10,297$10,297 13.9%13.9% 3.6%3.6% $88,186$88,186

FORT MEADEFORT MEADE $65,120$65,120 $9,640$9,640 17.4%17.4% 4.4%4.4% $80,819$80,819

MCGUIRE AFBMCGUIRE AFB $48,617$48,617 $6,718$6,718 16.0%16.0% -0.5%-0.5% -$6,213-$6,213

QUANTICO MCB $66,102 $7,730 13.2% 5.2% $91,701

DOVER AFB $19,757 $1,703 9.4% 1.9% $13,323

FORT DRUM $27,100 $6,237 29.9% 3.4% $25,369

FORT MYER $49,782 $4,595 10.2% 5.1% $72,175

HANSCOM AFB $21,678 $1,892 9.6% -3.9% -$28,112

BRUNSWICK NAS $16,749 $2,537 17.8% 1.6% $6,989

FORT MONMOUTH $10,362 $1,390 15.5% -1.7% -$6,074

NEWPORT NETCNEWPORT NETC $17,095$17,095 $1,419$1,419 9.1%9.1% 6.6%6.6% $35,352$35,352

PATUXENT RIVER NASPATUXENT RIVER NAS $21,212$21,212 $1,828$1,828 9.4%9.4% 1.5%1.5% $10,094$10,094

BANGOR ANGBBANGOR ANGB $7,041$7,041 $1,539$1,539 28.0%28.0% 4.3%4.3% $9,752$9,752

C.E. KELLYC.E. KELLY $6,669$6,669 -$354-$354 -5.0%-5.0% -3.9%-3.9% -$11,069-$11,069

“Pictures say 1,000 words!”

DeCA East POC for Vendor Stocking Issues (Joyce Chandler - CMS)

#4 Continued emphasis/training on CAO#4 Continued emphasis/training on CAO

processes to optimize shelf pack-outprocesses to optimize shelf pack-out

If you stock it, we will order it!!If you stock it, we will order it!!

Tactical Changes To Increase SalesTactical Changes To Increase Sales

Addressing leadership issues – Building Strong Teams!Addressing leadership issues – Building Strong Teams! Focus on perimeter salesFocus on perimeter sales Focus on MBU programs & special sales events Focus on MBU programs & special sales events

(“WOW!”)(“WOW!”) Push club pack salesPush club pack sales Continued CAO training to ensure maximum shelf stockContinued CAO training to ensure maximum shelf stock Improve Weekend Support & CoverageImprove Weekend Support & Coverage Ensuring that outreach program is at its maximum Ensuring that outreach program is at its maximum

potentialpotential Improve merchandising of the sales floorImprove merchandising of the sales floor Continuous indexing of commoditiesContinuous indexing of commodities

“Telling the future by looking at the past assumes that conditions remain constant.

“This is like driving a car by looking in the rear view mirror”

- Herb Brody