David Tarantino: Okay. And that’s the total comp?
Steven Hislop: Yes.
Jon Howie: The total comp, yes. And as you mentioned, we had about 3%, 3.5% pricing roll off. So that’s talking — you’re talking about a 1% negative traffic possibly, yes.
David Tarantino: That’s good. That’s helpful. And then Jon, if I look at your guidance and the performance you’ve had on restaurant margin, it looks like maybe this year shaping up to be at least at the high end, if not above the high end of that long-term target you shared previously. So I was wondering if you can kind of frame up how you’re thinking about the margin structure longer term? And is it possible to think about 20% plus type restaurant margins as you look at the business?
Jon Howie: Well, I mean, it’s all related to kind of the volumes and how those shake out. But what we’re seeing for the rest of the year, we’re looking in the third quarter with those prices coming off. We’re not going to have the sales leverage that we’ve had in the first 2 quarters. And so we’re going to see a little less margin here in the third quarter. And then in the fourth quarter, obviously, we have the extra week, but we’re also rolling over the addition of our extra delivery partner in the fourth quarter. So that’s going to flatten that out a little bit as well. So I think that will temper the margins a little bit than what we’re seeing right now. But long term, I mean, we’re still looking at that 350 basis points above, so in that 19% to 20% range.
Operator: Our next question comes from Brian Mullan with Piper Sandler.
Aisling Grueninger: This is actually Aisling on for Brian. My question is about your recent catering business and how that is coming along versus your own internal expectations of that? And what kind of impact has it had to your off-premise business?
Steven Hislop: We’re excited, obviously, we’re in 16 states, well, how many — 17 markets currently on the catering, and we’re excited. I think I mentioned in my prepared statement, we are about 80 basis points higher than the year. And so we’re very, very excited about that. We’ll continue to add certain trucks and refill some of our markets as we continue forward. But we believe long term, we believe that catering number can be in that 4% to 6% range over the next few years.
Operator: Your next question comes from Brian Vaccaro with Raymond James.
Brian Vaccaro: I just wanted to circle back on commodities. And Jon, could you provide some more color on the items you’re seeing favorability on driving that recent deflation? And also remind us where you are on beef contracts specifically?
Jon Howie: Sure. So I’ll just start with the beef. Beef, we’re contracted through the rest of the year, just a little spillover in the next year, but not much. So it’s really just basically through the rest of the year. And those are at prices a little less than last year. So that’s some of that deflation. We’re also seeing significant deflation, obviously, in chicken, as I think most people are coming off of the all-time highs from last year, seeing deflation in dairy as well and then some of our produce. But we expect kind of the produce that always kind of jumps up here in kind of the third and fourth quarter. We’re also seeing inflation in some of our grains and oils and things in our grocery basket. But those are really the big items.
Brian Vaccaro: Okay. Great. And on labor, I just — you talked about increasing staffing levels, which I think makes a lot of sense as dining continues to recover. But could you provide any perspective just on how much average hours were up or some other way that you might be able to quantify that? And maybe more broadly, just speak to what you’re seeing in terms of turnover? And are you seeing any tangible benefits of more tenured teams driving better ops, increasing guest satisfaction, et cetera? Maybe just speak to that dynamic a little bit?
Jon Howie: I’ll speak to turnover. Turnover, from an hourly standpoint, we’re still a little over 100% from a management standpoint, a little over 26%, 27% and as far as the hourly, I don’t have that figure for you as far as the increase over the last year. But what we have been doing is replacing a lot of our overtime hours with kind of full-time positions now, which obviously, when you replace them with fresh people, that’s going to help the guest experience as well. So you don’t have as much overtime. So that’s also helping out, but we’re continuing to get fully staffed on each and every shift and that helps the customer experience.
Brian Vaccaro: All right. That’s great. And then just lastly, on the development front. Obviously, build-out costs have been pressured in recent years. Are you seeing any green shoots of relief on that front on the horizon? And maybe you could just level set as just in terms of your unit economics that you’re underwriting as you think about the pipeline next 12 to 24 months?
Jon Howie: Well, we continue to underwrite. We’re looking at the cost in a new unit in that . It’s kind of the cost of it. All in, net of landlord dollars. But as far as what we’re seeing a construction cost standpoint. We’re seeing costs starting to flatten out but not yet come down. I think I’ve heard somebody else saying we don’t want to get these developers used to these prices. And so hopefully, we’re trying to get as competitive as we can in some of these pricings. So we can bring those costs down. But right now, we’re not seeing it.
