The White Falcon - 21.03.1964, Page 3

Saturday, March 21, 1964
WHITE FALCON
3
Wherever servicemen are located, some form
of retail store is found with them. The United
States Army has always had its post exchanges.
Sailors on naval vessels always managed to pur-
chase life’s essentials and a few luxuries, even
though they often had to wait for a port of call.
Supply channels were limited in the early days
and the post proprietor was subject to headaches
galore because of transportation problems. Even
so, the omnipresent difficulties in keeping soldiers
supplied with tobacco and writing paper didn’t
become immediate until the Civil War. With full
scale troop movements throughout the vast area
between the Atlantic seaboard and the Mississippi
it became necessary for the North to streamline
its supply system.
Following the close of hostilities the War Depart-
ment adapted the system to a smaller, more wide-
spread force. But the headaches continued. Supply
was a haphazard thing. No separate department
for meeting the personal needs of the serviceman
existed. , j jli:
LOOSE ORGANIZATION
In the early days of our Navy the exchange
system amounted to person-to-person bartering. A
plug of tobacco might be worth a few sewing
needles, or a wool cap would possibly bring its
owner a razor.
From the early years of the twentieth century,
through the Second World War, Navy retail func-
tions were handled by Ships Service, a sprawling,
locally managed organization, which was financed
from the taxpayers’ pockets. In 1945 Secretary of
the Navy James Forrestal became mindful of the
loose organization and appointed a commission of
independent businessmen and Navy officers to
review and streamline Navy resale activities.
EXCHANGE ESTABLISHED
In 1946 the Navy Exchange as we know it to-
day was established, and its mission was defined
— “To provide an attractive, convenient, well-
managed facility where authorized persons can
obtain quality merchandise and services at rea-
sonable prices.”
The management of the Navy Exchange system
FOR ALL AGES — Far from catering to one age
group the Exchange, through facilities such as
Toyland, supplies the “necessities” of childhood
as well as items for the older set.
was delegated to the Navy Ships Store Office
(NSSO), which in turn was made responsible to
the Bureau of Supplies and Accounts (BuSandA).
A permanent advisory board composed of business-
men, financiers and consultants was established.
The Chief of BuSandA and the Deputy Chief
of Naval Personnel were given the chairmanship
of the board.
PROFITS DISPOSITION
Although Navy Exchanges operate in much the
same way as civilian retail establishments, their
objectives are integral to the Naval Establishment.
Between 80 and 95% of Navy Exchange profits
are channeled into local recreation funds, provid-
ing morale and welfare maintaining facilities such
as gymnasiums, theaters, clubs, service depart-
ments and hobby shops. Between 5 and 20% of
Exchange profits go to the Bureau of Personnel’s
Central Recreation Fund which provides fleetwide
services. A major portion of this profit block fin-
ances the purchase and disposition of free movies
to Navy ships and installations. Expenses for
these movies total approximately $2.5 million an-
nually.
The Navy Exchange is a self-sustaining facility.
It operates on non-appropriated funds with a
percentage of its gross profits meeting its over-
head, e. g., payroll, stock, maintenance. Exchange
sponsored clubs are financed unilaterally. Their
profits are “cycled” from the clubs’ tills back in-
to their facilities.
EXCHANGE TOTALS
There are 169 Navy Exchanges in existence,
many in far flung locations such as Naval Station
Adak, Alaska and Bangkok, Thailand. Every Ex-
change falls into one of five groupings according
to gross sales receipts. Because of its $250,000
monthly gross the Keflavik Exchange is classed
in the top group, which is determined on a
$150,000 basis.
In Fiscal Year 1962, combined total sales of
all Navy Exchanges and ships stores totaled
$337,282,368. The Keflavik Exchange averages
approximately $3 million in annual sales, and has
an on-hand stock value of $500 thousand.
PROVIDING GOODS
In accordance with its primary function an Ex-
change must provide essentials to its patrons.
However, it also provides numbers of luxuries,
ranging from engagement rings to stereo sets,
to delicate china. Some Exchanges provide auto
sales services.
Trained buyers scout wholesale markets for the
Navy Exchange. They compile a Price Agreement
Bulletin to aid NavEx purchasers in finding the
best items for the least cost. Lt. Hugh R. French
Jr., the Naval Station Exchange Officer, summed
up the Exchange’s price objectives with “We try
to stay abreast of stateside markets through the
very latest publications.”
A problem inherent to all Exchanges is main-
taining low products prices in the face of rising
labor and material costs. A problem most peculiar
to overseas Exchanges is the inconsistancy of
transportation. In 1963, three monthly shipments
failed to reach NavSta Exchange counters.
LOCAL ACTIVITIES
Our local Exchange employs some 200 Icelandic
workers, 10 dependents and over 150 off-duty mili-
tary personnel. Seventeen enlisted personnel and
two officers are permanently attached to the work
force.
Its services range far beyond the Main Retail
Store. Also falling into the realm of Exchange
activities are: the Exchange Annex (T-27), Toy-
VAST ARRAY — Your Exchange carries a di-
versity of goods, ranging from soap to stereos and
from dishes to diamonds.
PERSON TO PERSON — Each patron of the Sta-
tion Exchange is given the best possible service.
land, the service station, three barber shops (Of-
ficers’, Chiefs’ and Station), a beauty shoppe,
photo shop, laundromat, tailor shop, dry cleaning
plant, Terminal Restaurant, Viking Club, Snack
Bar (T-100), Crows, Nest, Polar Club, Keflavik
Club, Viking retail outlet, a radio-TV repair ser-
vice and a number of services for site and off-
base personnel.
STOCK PROBLEMS
Just as the early trading post had its problems
the Naval Station Exchange has its share, too.
An overwhelming majority of stock is received
via cargo ship from Bayonne, New Jersey. These
shipments are inconsistent, and at times fail to
materialize because of obstacles such as longshore-
men strikes. In short, your Navy Exchange is en-
tirely dependent on ships in keeping the shelves
stocked. To avert a serious lack of stock the Ex-
change Office orders from between 1.7 to 4.8 times
the amount of a particular item needed. In the
event of an overabundance a sale is held. If a
severe shortage in essentials materializes items
may be flown in.
Stock is shipped according to an exchange code
number. Unfortunately, Keflavik’s code is similar
to NAS Bermuda's and many products program-
med for the Naval Station end up in Bermuda.
Some stock ultimately winds up somewhere in
Europe instead of locally.
Because of rapid rotation of personnel, workers
must be trained in a hurry, and training is a
never-ending cycle.
(Continued on Page 6.)