Calhoun: The NPS Institutional Archive Theses and Dissertations Thesis Collection 2014-12 Walmart Supercenters a suitable alternative to shopping at the commissary for eligible military patrons Folkers, Eric Monterey, California: Naval Postgraduate School http://hdl.handle.net/10945/44562 NAVAL POSTGRADUATE SCHOOL MONTEREY, CALIFORNIA MBA PROFESSIONAL REPORT WALMART SUPERCENTERS A SUITABLE ALTERNATIVE TO SHOPPING AT THE COMMISSARY FOR ELIGIBLE MILITARY PATRONS December 2014 By: Eric Folkers, Alfonso Francisco, and Joel Frey Advisors: Ryan Sullivan, Laura Armey Approved for public release; distribution is unlimited THIS PAGE INTENTIONALLY LEFT BLANK REPORT DOCUMENTATION PAGE Form Approved OMB No. 0704–0188 Public reporting burden for this collection of information is estimated to average 1 hour per response, including the time for reviewing instruction, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Washington headquarters Services, Directorate for Information Operations and Reports, 1215 Jefferson Davis Highway, Suite 1204, Arlington, VA 22202–4302, and to the Office of Management and Budget, Paperwork Reduction Project (0704–0188) Washington DC 20503. 1. AGENCY USE ONLY (Leave blank) 2. REPORT DATE 3. REPORT TYPE AND DATES COVERED December 2014 MBA Professional Report 4. TITLE AND SUBTITLE 5. FUNDING NUMBERS WALMART SUPERCENTERS A SUITABLE ALTERNATIVE TO SHOPPING AT THE COMMISSARY FOR ELIGIBLE MILITARY PATRONS 6. AUTHOR(S) Eric Folkers, Alfonso Francisco, Joel Frey 7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES) 8. PERFORMING ORGANIZATION Naval Postgraduate School REPORT NUMBER Monterey, CA 93943–5000 9. SPONSORING /MONITORING AGENCY NAME(S) AND ADDRESS(ES) 10. SPONSORING/MONITORING N/A AGENCY REPORT NUMBER 11. SUPPLEMENTARY NOTES The views expressed in this thesis are those of the author and do not reflect the official policy or position of the Department of Defense or the U.S. Government. IRB Protocol number ____N/A____. 12a. DISTRIBUTION / AVAILABILITY STATEMENT 12b. DISTRIBUTION CODE Approved for public release; distribution is unlimited 13. ABSTRACT (maximum 200 words) From 1961 to present day, Walmart has expanded its number of Supercenters to 3,336 locations throughout the continental United States, growing to be the most readily accessible grocer in the lower forty-eight states. This thesis will demonstrate that concentrated populations of active duty and retired military personnel are subject to shorter commutes when shopping at Walmart Supercenters rather than military commissaries. This thesis will further demonstrate that the average military base is closer to a Walmart than a military commissary and that the average number of Walmart Supercenters exceeds the number of commissaries within specific distances from military bases. With rising fuel costs and the number of Walmart Supercenters available nationwide, eligible commissary patrons may be less willing to drive long distances in order to save money on groceries. The closer and more convenient option may best serve the needs of the military customer. If better alternatives exist outside of the commissary, the government can reexamine the practicality of dedicating annual appropriations to the Defense Commissary Agency. 14. SUBJECT TERMS 15. NUMBER OF Commissaries, commissary, Walmart, Walmart Supercenter, shopping benefit, military benefit, PAGES military stores, DeCA, budget cuts, savings, cost cut, cost comparison, surcharge, veteran benefit, 133 eligible patron, NEX, groceries, food, Basic Allowance for Subsistence, BAS, military wives, spouses, 16. PRICE CODE families 17. SECURITY 18. SECURITY 19. SECURITY 20. LIMITATION OF CLASSIFICATION OF CLASSIFICATION OF THIS CLASSIFICATION OF ABSTRACT REPORT PAGE ABSTRACT Unclassified Unclassified Unclassified UU NSN 7540–01–280–5500 Standard Form 298 (Rev. 2–89) Prescribed by ANSI Std. 239–18 i THIS PAGE INTENTIONALLY LEFT BLANK ii Approved for public release; distribution is unlimited WALMART SUPERCENTERS A SUITABLE ALTERNATIVE TO SHOPPING AT THE COMMISSARY FOR ELIGIBLE MILITARY PATRONS Eric Folkers, Lieutenant, United States Navy Alfonso Francisco, Lieutenant Commander, United States Navy Joel Frey, Lieutenant Commander, United States Navy Submitted in partial fulfillment of the requirements for the degree of MASTER OF BUSINESS ADMINISTRATION from the NAVAL POSTGRADUATE SCHOOL December 2014 Authors: Eric Folkers Alfonso Francisco Joel Frey Approved by: Ryan Sullivan Laura Armey William R. Gates, Dean Graduate School of Business and Public Policy iii THIS PAGE INTENTIONALLY LEFT BLANK iv WALMART SUPERCENTERS A SUITABLE ALTERNATIVE TO SHOPPING AT THE COMMISSARY FOR ELIGIBLE MILITARY PATRONS ABSTRACT From 1961 to present day, Walmart has expanded its number of Supercenters to 3,336 locations throughout the continental United States, growing to be the most readily accessible grocer in the lower forty-eight states. This thesis will demonstrate that concentrated populations of active duty and retired military personnel are subject to shorter commutes when shopping at Walmart Supercenters rather than military commissaries. This thesis will further demonstrate that the average military base is closer to a Walmart than a military commissary and that the average number of Walmart Supercenters exceeds the number of commissaries within specific distances from military bases. With rising fuel costs and the number of Walmart Supercenters available nationwide, eligible commissary patrons may be less willing to drive long distances in order to save money on groceries. The closer and more convenient option may best serve the needs of the military customer. If better alternatives exist outside of the commissary, the government can reexamine the practicality of dedicating annual appropriations to the Defense Commissary Agency. v THIS PAGE INTENTIONALLY LEFT BLANK vi TABLE OF CONTENTS I. INTRODUCTION........................................................................................................1 A. OVERVIEW .....................................................................................................1 B. POSSIBLE ALTERNATIVES .......................................................................2 C. AREA OF RESEARCH ..................................................................................2 D. APPROACH .....................................................................................................3 E. ORGANIZATION ...........................................................................................4 II. BACKGROUND ..........................................................................................................5 A. OVERVIEW .....................................................................................................5 B. COMMISSARY HISTORY ............................................................................5 C. BRIEF HISTORY OF WALMART.............................................................10 D. REVIEW OF COMMISSIONS, REPORTS AND THESES .....................11 1. Hook Commission, 1947 ....................................................................12 2. Strauss Commission, 1952 .................................................................12 3. Harden Subcommittee, 1953 .............................................................12 4. Hoover Commission, 1955 .................................................................13 5. Government Accounting Office Report, 1964 .................................13 6. Bowers Commission, 1975 .................................................................14 7. Grace Commission, 1987 ...................................................................15 8. Jones Commission, 1989 ....................................................................16 9. Jeffery Dearing 1984 Thesis ..............................................................17 10. Martin Alcott 1994 Thesis .................................................................19 11. Christopher R. deWilde 1998 Thesis ................................................21 E. MARKET BASKET STUDIES ....................................................................23 F. SUMMARY ....................................................................................................24 III. RESEARCH METHODOLOGY .............................................................................27 A. OVERVIEW ...................................................................................................27 B. AVAILABILITY AND ACCESSIBILITY ..................................................27 C. METHOD OF DATA COLLECTION ........................................................28 D. DECA PRICE SURVEY ...............................................................................35 E. LOCAL PRICE COMPARISON STUDY ...................................................36 IV. LOCATION DATA AND ANALYSIS ....................................................................39 A. WALMART SUPERCENTER AND COMMISSARY SITE SELECTION ..................................................................................................39 B. OVERVIEW ...................................................................................................40 C. HOW ACCESSIBLE ARE COMMISSARIES IN MAJOR METROPOLITAN AREAS? ........................................................................40