Richard Galanti: Essentially, yes. Much like the travel business.
Scot Ciccarelli: Okay. Thank you.
Unidentified Company Representative: Mostly.
Operator: We’ll take our next question from Greg Melich with Evercore ISI.
Gregory Melich: Hi, thanks. Richard, I want to follow up on the membership fee hike as I think now we’re in extra time. And I wonder how much does the growth in mix and Executive membership driving that high single-digit growth. Is that what it means that you don’t have to increase it and you could keep waiting or is there something else?
Richard Galanti: I think it’s just us. Again, if I look at the — if you ask the question, what are the variables we would look at, we would want to look at strong renewal rates, strong new sign-ups, strong loyalty, and we have all that. So I think it’s a question is, we haven’t needed to do it. We like providing extreme value. Certainly, while we’ve gone a little longer than the average increase, we feel we certainly have driven more value to the membership. So I’ll use my standby answer, my answer, it’s a question of when, not if. But at this juncture, we feel pretty good about what we’re doing.
Gregory Melich: And a follow-up on inflation. I just want to make sure I got that right. You said 0% to 1% for the quarter. Did it trend towards 0%? Did we exit near the bottom? And you mentioned some categories that were deflationary, which ones are stubborn in terms of inflation where it’s hardest to get it out?
Richard Galanti: Which inflation — which categories are stubborn in inflation?
Gregory Melich: Yeah. Where you can’t get that?
Richard Galanti: CPG, obviously.
Gregory Melich: All the branded packaged stuff?
Richard Galanti: There wasn’t a big trend. I think at the end, it was a little lower than the beginning, but not a big trend.
Gregory Melich: Okay. So it’s not like we exited 0%. We’re still slightly positive.
Richard Galanti: Right. But recognize, the LIFO charge is an inventory cost of sales charge. [Multiple Speakers]
Unidentified Company Representative: Year-over-year number. LIFO [Multiple Speakers]
Richard Galanti: Right. The 0% to 1% is from the beginning of the fiscal year. Now it’s from — I’m sorry, the beginning of — the 0% to 1% is versus a year ago.
Gregory Melich: Year-over-year, got it.
Richard Galanti: Yeah.
Gregory Melich: Great. And then just last, what is the auto renewal rate now?
Unidentified Company Representative: Around 60%.
Richard Galanti: In the U.S., it’s around 60%.
Gregory Melich: Perfect. Thanks. Have a great holiday guys.
Richard Galanti: You too.
Operator: We’ll take a next question from Rupesh Parikh with Oppenheimer.
Rupesh Parikh: Good afternoon. Thanks for taking my question. So I just want to go to operating expense growth. So operating expense growth is still high. Would you expect the growth rate to moderate once you lap that March wage increase? And then anything unusual within that line item that’s still driving pretty high growth?
Richard Galanti: There’s not a lot unusual. I think it gets back to the question of low inflation, which creates a little bit more of a challenge, right? My extreme — and again, that was a very extreme example I gave you on nuts. But when you had a slight 0% to 2% decline in sales and a 14% increase in units, you got more labor involved, more hours stock of the shelf. I mean that’s at the 40,000-foot level. And that’s an extreme example. But I think overall, it is sales base. You should also remember, if you remember going back to fiscal ’19 and the first part of fiscal ’20, before COVID, our SG&A percent was — for all of ‘19, it was at 10 04. In the first quarter of 2020, it was a 10 34, And for the whole year, it was a 10 04 for both of those two years.
And we used to think to ourselves will we ever be able to get it back below 10%. And in 2022, which was the kind of month seven through 18, if you will, that 12-month period after that full fiscal year for us of COVID, we reported an 8 88 for that year. So even at the 9 45 that we just reported, we’re still quite a bit lower than we had been historically, a function of a lot of things, including higher sales productivity and all that. So I think we’re doing pretty well. I think certainly, that’s the challenge. How do we reduce that and how do we manage that? And certainly, the biggest way to manage is driving more sales.
Rupesh Parikh: Great. And then maybe just one follow-up question. So just curious how you’re feeling about the healthier consumer. So it was interesting to hear that TVs did well this past quarter.
