That really drives people’s behavior in a lucrative fashion over the long term. It’s not particularly accretive in the first year, as we’ve seen here in this first year of that new program. But it allows the program to grow so that it will be really a juggernaut in two or three or five years. So we will continue to invest in the business for the long term. That’s really our job is to create that long-term value for our shareholders.
Simeon Gutman: Thanks. And then one follow-up on general merchandise. How well do you know the customer who’s buying it? Meaning, is it the most loyal? Is it a new member? And then the breadth across the different categories in general merchandise. And anything that’s observable between a mature center or an existing market versus new markets?
Bob Eddy: GM was a great story during the quarter, as we talked about, so led the business almost at a positive 2% comp and a huge acceleration off of the third quarter. This was the first quarter where you could really see the new and better assortment across many categories in GM. As you know, we started to renovate in apparel last year and saw some great results. And a lot of the Q4 categories were long lead time categories. The first time to really see that benefit was in the fourth quarter. The great news is it really resonated with our members. We took huge important categories like consumer electronics and just knocked them out of the park. Apparel continued to do well. We had great business in other categories as well.
And you brought up the point of member engagement. We’re not just looking at the sales for these things or the margin for these things. We’re looking at how many members are participating, what’s the growth in those members, what are they look like and they are members from across our portfolio. It doesn’t surprise me to see that, right? If you put a fantastic brand with a fantastic value in front of somebody, their tenure as a member doesn’t really matter. It’s really about that great quality item at a great value. So we are very pleased with what we saw. It’s one inning in a long game. We need to continue to do this over and over and over to rebuild the credibility and general merchandise with our members. But for the first time in a long time, just hearing from friends neighbors, and colleagues that our assortment was much, much better than in the past.
It was a really good first step for our team, and I couldn’t be more proud of what they did during the quarter.
Simeon Gutman: Thanks. Good luck.
Bob Eddy: Thanks, Simeon.
Operator: Our next question today comes from Michael Baker from D.A. Davidson. Your line is now open. Please go ahead.
Michael Baker: Okay. Thanks. I wanted to ask Bill about real estate. Can you update us on how you’re doing in some of the newer markets and intrigued with another new state in Kentucky, just overall, what you’re seeing from new markets and why that gives you continued confidence to continue to grow the footprint?
Bill Werner: Hey, Mike, thanks for the question. Yes, we feel great about the real estate program. We — as we talked about in the release, we did eight clubs last year. We opened up a ninth just last month. And as we look forward to this year, we see continued growth on the horizon. And as Bob said in the prepared remarks, as we step back and look across the club growth plus what we now have in the pipeline, with the pipeline the strong it’s been at any point in my tenure at the company. We feel really good about what’s ahead. In terms of the recent club performance, I think this past year, we’ve seen what we’ve seen over the last couple of years is that the clubs are outperforming on the sell side, and we see really great member acquisition, member engagement. So we continue to work hard. Bob reminds me every day to go a little bit faster on real estate, and we’ve done a great job in adding to the pipeline this year. So I think more club growth ahead.
Bob Eddy: And it’s an important reflection, Mike. It wasn’t too long ago that we stopped opening clubs because we really didn’t know how to do it well. We weren’t doing it profitably. We didn’t have enough members when we opened the clubs. And now the recent results are just spectacular over the last couple of years. And as Bill said, I’m pushing pretty hard to go even faster than where we are today. I’m proud of where we are going from no club growth to about 10 a year. That’s no terrible performance there. It’s fantastic. But this is really clubs time, right? You think about the shopping environment that’s out there where value is paramount, there’s no better value than the club business. And so we need to be as aggressive as possible in bringing what we offer to new markets and to really extending our reach in existing markets as well.
Michael Baker: Yeah, makes sense. If I could ask one, I guess, follow-up but admittedly unrelated. You talked about the strength in general merchandise, particularly over the holidays, that opens the door, maybe wondering if you’re willing to make any comments on monthly trend during the fourth quarter and then into early first quarter where it sounds like there’s a little bit of disinflation? Does that mean maybe a negative comp in the first quarter? Or should all quarters perhaps comp positively?
Bob Eddy: Well, look, we had a fantastic November. We were very proud of as we talked about the new GM assortment and all the offers that we put out there. It was really a great 360-degree program that our team put together and executed very, very well. That resonated early in the quarter. December was slightly less than November, January came back a little bit. So there were slight differences from month to month. But all through the quarter, we saw really good performance. I’ll refrain from getting into the first quarter all that much other than to say and Laura can build on this, however she’d like. I feel like the first quarter, given the pretty significant pricing lap year over year, the first quarter should look a lot like the fourth quarter of last year, and then the comps should build as we go as that comp lap gets a little bit easier from a disinflation perspective.
