Navy Exchange Fights Retail Giants to Preserve Sailor Benefits
Could a small convenience shop in Poland be central to U.S. naval readiness? On a windswept stretch of farmland and pine in northern Poland, some 150 U.S. Navy sailors rely on a Navy Exchange Mini Mart for snacks, hygiene products and familiar household brands. That modest outpost in Redzikowo is one of hundreds run by the Navy Exchange Service Command, or Nexcom, and it exists not just for convenience but to support sailors and their families.
Nexcom funnels profits back into programs that sustain service life. The chain supplies active duty members across branches, veterans and families with lodging access, uniforms and tax-free goods. Nexcom also operates larger department-style stores near major bases and smaller convenience sites overseas. “Even though we’re within the military, we compete for people’s share of wallet, right? They can just as easily … stop at a Target, they could stop at a Walmart, but we want them to shop here,” said Nexcom’s CEO Robert Bianchi, who holds a Harvard MBA and has almost 30 years of experience as a sailor. “It is a constant challenge to stay relevant.”
The business model matters because retail earnings fund morale, welfare and recreation programs. Those services include day cares, gyms, counseling and community events that bind families and deployments together. But Nexcom’s sales have declined for 12 years, falling 19% between fiscal 2012 and 2024, and fiscal 2024 recorded the lowest sales in nearly 20 years outside the Covid-19 pandemic. Dividends that feed MWR programs have dropped as well, falling 43% from $51.9 million to $29.8 million between fiscal 2013 and fiscal 2024. “The pressure is there. I feel it, you know, and just like a retailer, we watch our sales figures and every day we’re looking at our retail trends,” Bianchi said. “What is at risk is potentially the degradation of this benefit for all those military members and their families around the world and so that’s why we take this very seriously … if we made less money, [MWR] may have to reprioritize some things within their budget.”
Customers and leaders point to modern retail rivals as a key reason for the slide. Nexcom has lagged in e-commerce and store design while competing against big chains that have expanded access and convenience. “Amazon’s never closed,” said Angela Emerson, a Navy veteran and Nexcom customer, explaining why many shoppers opt elsewhere. Behind those words is a broader challenge: service organizations must now think like commercial retailers to keep patrons loyal.
In May 2020, Nexcom hired retail consultant Melissa Gonzalez, a principal at strategy, design and architecture firm MG2, to help redesign stores under a “Store of the Future” program. The effort has already consumed $20 million in improvements and Nexcom plans to spend $80 million more over the next three years, much of it earmarked for those projects. Gonzalez noted the difficulty: “They have a lot of unique challenges with the Navy Exchange. One, no
two buildings are the same, so it’s really hard to standardize things that you would then roll out once you come up with a concept, because there’s a lot of different scenarios with the architecture, with the geography, with merchandizing,” she said. “Also, when the Navy Exchanges first started, there weren’t so many comps like you see today, Target and Walmart and some of these others who have really grown. And so what is the
repositioning of their place in the industry, to their customer, with all of this evolution that’s happening?”
Renovations have pushed Nexcom to rethink merchandising and the customer journey. “The least expensive item we sell is a note card overseas. It’s about 30 or 40 cents. The most expensive item we sold last year? A diamond solitaire ring that was over $90,000,” said Richard Honiball, Nexcom’s chief merchandising and marketing officer. “How do we merchandise it? It is challenging, which is why we don’t try to be Costco and bulk things out, or we don’t try to be Amazon and carry everything. What we try to do is curate the assortments as best we can, and I think we get it right more than we get it wrong. But when we get it wrong, we listen to the patron and we adapt.”
Leaders say the turnaround is beginning to show measurable gains. Customer satisfaction rose 2.7 percentage points in 2025, the first increase since fiscal 2021, and retail sales were up 3.2% year over year. “Any time we’ve touched an area, it’s driving more sales,” Honiball said. “We didn’t start off saying we’re going to create the Store of the Future, but we were two or three projects in and realized that in essence, what we’re doing is creating this new environment that is much easier, it’s easier to run and it’s more engaging for the patrons.”
The path forward is clear: accelerate high-impact renovations and modernize digital shopping while protecting the benefits that set Nexcom apart. Short-term wins should focus on stores that yield the biggest dividends.
US News Hub Misryoum visited Norfolk, Virginia, to compare a traditional store, NEX Norfolk, with the overhauled NEX Oceana. The differences are visible on the floor. At NEX Oceana the lighting is brighter, signage is digital and departments are easier to navigate. “People have become more aware of what a good setting feels like. Lighting is critical, right?” Gonzalez said. Curated brand sections replaced haphazard racks, and the changes drove higher sales in several categories. Bath and Body Works sales at NEX Oceana jumped 40% between 2023 and 2024. Honiball added: “We’ve already remodeled 20 of the 25 main stores, and we’re seeing increases across the board. In beauty, our beauty sales are up in the high single digits. They’re performing three to 400 basis points better than the main chain.”
There remain operational frictions, especially online. Nexcom’s digital storefront requires military credentials and some purchases still need phone follow-up, which frustrates busy families. “It’s like this big rigmarole to try to get logged on. It’s kind of a pain,” said Melissa Wadington, whose spouse is in the Navy. Physical stores retain unique advantages, however. Service members in uniform can get front-of-line privileges, and staff often understand military life. “It’s nicer people because we’re all military,”
said Kathy Pawlak, the spouse of a veteran Navy pilot. Bianchi argued the human element is central: “That’s kind of our secret sauce,” he said. “When a family or a sailor walks in here, one out of three people they’re interacting with probably has walked a mile in their shoes, right? So they get it. They understand if that kid is crying in the aisle and whoa, daddy’s gone, you know, or whatever, they get
it because they probably moved, or they probably had a dad or a mom who was gone and they can really empathize with that.”
Navy Exchange leaders acknowledge the risk and the urgency. The organization is not a federally funded program but a self-sustaining retail system, meaning sales are essential to funding the very benefits that keep families intact. “There is no time to sit idle in this retail environment,” Bianchi said. “I won’t lie to you and tell you that the competition isn’t fierce. It is. I mean, we fight. We fight to maintain that loyalty.” As Nexcom modernizes stores and tightens its digital experience, the broader question will be whether those moves restore the revenue needed to protect morale and readiness.