So this $10 is very, very impactful, no question about that. Our goal, as I mentioned, is to increase loyal members, up to 3 million members by the end of 2024. And yeah, there is no question that when you give $10, that’s going to impact your sales. That’s the reason the same store sales were 0.1. But if you really naturalize the impact of approximately $2 million, same store, sales will probably, added another 0.4%. And on the same store sales, excluding cigarettes, which I think that’s the best metrics to measure our business, it would probably add another 0.6%. So again, it’s an investment, it’s a long term investment. But if you look in Q after Q, the concentration of loyal members in Q3 2021, from inside sales was around 13.6%. We grew it to 16.7% in Q3 2022.
And now we are at 19.3% in Q3 2023. And one thing to notice is that we keep increasing margin, even though, we are, basically giving tremendous value to those loyal members that come in more often, we actually were able to increase margin again by 50 basis points compared to Q3 2022.
Kelly Bania: Just a couple follow-up questions there. If you get to 3 million members by ’24 what percent of your sales or customer base will that represent? And maybe just in terms of the $10 enrollment program, I mean, is that going to continue at that level? Or in how do you think about cycling that next year? Should we expect that could impact traffic or just trying to think about how we cycle this promotion, as we get to Q2, Q3 next year?
Arie Kotler: Sure. So I can tell you that as of November 1, we have — we paused that in September ’19, for a little bit, and as of November 1, we started it all over again, because we saw a huge impact, based on that. Again, it’s not a big dollar amount, but I think the impact is tremendous over here. Those customers are coming more often. We see more trips, we see more trips over here. And the longer the member is with us, the more they expand inside the store. And I just want to be just maybe be very clear about that, I mentioned four trips, and $41 per month. The reason for that is that a lot of those members actually enrolled, just close to the end of the quarter. And it takes some time for basically those members to start to get offering from us.
I mean, we are providing offering to those members on a regular basis. Almost on a daily basis, they get great offering. And this is what we are counting on. And this is by the way, a long term investment. When I say long term investments means that we are investing in the short term, because we believe that as we continue to grow our loyalty member base, I believe that we’re going to increase inside sales because of that. And that’s going to drive by the way customers to the pump as well, because we have actually offering inside the store that will send customers with nice cents per gallon off, basically when they come to actually to purchase fuel at the pump. So I think that’s basically going to impact that as well in the future.
Kelly Bania: Okay, thanks. Just one more for me, Arie on operating expenses, the same store personnel expenses, nearly flat, I think you called out a reduction in overtime hours. Maybe can you just give us an order of magnitude how that is impacting the overall OpEx, when it starts to cycle and what you’re seeing just in terms of wages and wage rates in the market today.
Arie Kotler: So I’ll Don answer this question if that’s okay with you Kelly?
Kelly Bania: Thank you.
Don Bassell: Yeah. Hi, Kelly. So the way we’re looking at it is, is we’re switching hours from overtime to regular hours. So it’s not necessarily the difference in hours being worked. More of those hours are being worked at a regular rate versus an overtime rate. And the other thing I think we mentioned is last summer, we did a promotion for all employees sort of like an incentive for the 100 days of summer. And this year we have obviously rates have gone up and we have now not had to do that kind of incentive. So yes, you do have rising labor wages. But what you’re seeing a reduction in is the incentives that have been out there, and that we’ve offered in the past. So net-net, you get sort of this flat, increase. And so rate rates are increasing but they’re not increasing at the rate that we saw earlier.
And that’s why we’re happy to see almost a flat personnel. It’s really how you’re spending your money, and we’re putting more into the wage rate rather than just incentives.
Kelly Bania: Perfect. And can you remind us when you kind of get back to normal in terms of the overtime — cycling the overtime?
Don Bassell: Could you please clarify your question? I’m not sure what you’re asking?
Kelly Bania: Well, I’m just trying to understand from a comparison standpoint, when the overtime hours start to get back to normal. Are you still shuffling increases for the next couple of quarters?
Don Bassell: Right, right. And a lot of it to break out Kelly, a lot of it was wage increases that we’re doing, I think this has been a — it has really going to be cycled more as we get toward the end of the year. It’s been an effort that we have done all year, by bring in temporary resources to do that. So this has been an ongoing effort. So we’ve really — in terms of cycling, it would really be done by the end of this year, because this has been a major focus from operations is to really cut down those overtime hours, give people a better quality of life, and then also raised — to say raise the hourly wage, and also use some temporary services to fill in for things that we can give people relief on.
Kelly Bania: Got it? And just maybe last one, for me any thoughts on just how you’re planning CapEx for 2024, that we can start to think about incorporating into our model?
Arie Kotler: Don, would you like to answer that?
Don Bassell: Sure. I mean, our maintenance CapEx will stay — I think this is the last big year that we have of our EMV conversions, which I think we talked about was somewhere between $10 million to $12 million a year that we have. But we will have some again, without giving out specific guidance, we have a lot of projects that will require CapEx going forward. But in looking at total, if you look at our total CapEx, roughly about two-thirds is maintenance, one-third is investment. So that may be a guideline for you. But there will be projects that will be coming up that will require CapEx, but a lot of those will be CapEx with a significant ROI too.
Kelly Bania: Thank you.
Arie Kotler: Thank you, Kelly.
Operator: Our next question is from Alok Patel with Stifel. Please proceed.
