AAFES Wants to Sell to Veterans

DALLAS -- In a bid to open its stores to veterans, The Army & Air Force Exchange Service (AAFES) has asked the Pentagon to allow it to offer online shopping to all honorably discharged veterans.

Currently, the AAFES online portal is available only to active service members, retirees and disabled veterans, according to a report by The Dallas Morning News. AAFES is the largest U.S. military retailer, operating 850 convenience/specialty stores (Troop Stores, Service Stations, Express, Class A liquor stores), 131 main stores, 174 military clothing facilities and 72 theaters. It also has more than 1,590 quick-service restaurants.

Tom Shull, chief executive of AAFES, told the news outlet that the move could add more than 22 million veterans to its retail network. That could generate 1,500 new jobs in the Dallas area, he said.

Qualified shoppers would be verified through the Department of Defense's eBenefits website. If benefits are extended to dependents, including surviving spouses, that would increase the pool of shoppers by 10 million people.

A spokeswoman for the Pentagon said the proposal is being reviewed.

"Veterans would view [online shopping with AAFES] as a benefit, and it doesn't cost the taxpayers any additional money," Shull said. "This is a way to honor all of those who have served honorably and benefits the Pentagon and the taxpayer. What other government program can say that?"

Adding millions of potential customers who are loyal to the military could increase AAFES' online sales from $200 million this year to $1 billion in five years, he added.

The sales boost would come as AAFES faces declining revenues -- expected to be $8.3 billion this year, down from $10 billion in 2012, according to the news outlet. Shull points to several factors behind the decline: active military members continue to leave Iraq, Afghanistan and Europe, and the facilities that serve them close; Exchange stores are losing customers as more active military families choose to live outside U.S. military bases; and Walmart has added stores closer to U.S. bases.

While sales are declining, profits are forecast to be $332 million this year, up from $272 million in 2012. Some of the savings have come from furloughs, stores being closed one day a week and 4,000 staff cuts worldwide by the end of this year, The Dallas Morning News reported.

All of AAFES' profits go to programs that support active-duty personnel and their families. "These are quality-of-life programs, and we don't want to risk them at a time when our people are trying to reconnect with their families," Shull said.

Retired Sergeant Major of the Army Ken Preston told the news outlet that he hasn't heard of any opposition to Shull's proposal, and it's just a matter of the Department of Defense reviewing and changing the policy.

"As budgets begin to shrink, maintaining morale and recreation dollars are very important for quality-of-life programs," Preston said.