Our buyers are out there making sure that we’re getting every promotional penny that’s out there and being on top of that with our suppliers. That’s part of what we do. But that’s been more of a focus. Yes, we focus on the categories that are growing. Examples would be like HABA and apparel, which are very strong for us right now. Part of apparel’s strength is getting more well-known stuff in.
Operator: Your next question comes from the line of Paul Lejuez with Citi.
Brandon Cheatham: This is Brandon Cheatham on for Paul. I want to go back to your comments on wider price gaps. It sounds like you’re managing the business just kind of how you always have. But your price gaps are wider than they ever have been. So I’m just wondering like how has your competitors’ behavior changed? Are there certain categories that they’re not responding to? Or are they responding slower than they have in the past?
Richard Galanti: Well, I think I said that they’re as wide as they’ve ever been. I don’t know if they’ve gotten wider. But we feel very good about where they are. And this is against direct competitors or other large boxes on certain categories, recognizing when it’s a traditional retailer, there’s a much bigger price gap to start with. And I’ll remind you also, despite the fact that we and another warehouse club essentially sell the same types of items, we want to make sure that on exact like-branded items, we’re better priced. So on those $100 million, $150 million, that’s where we look at that. They’re the most competitive, whether it’s Coke and Pepsi or Advil or Tide detergent or key items that everybody knows the price of or is that same item.
There are plenty of items that are differing in quantity, quality, size, color, you name it, where we feel that, in some cases, we have a better value. But that’s up to the customer to behold that. And so we just keep doing what we’re doing. We’re focusing on those competitive items and constantly figuring out how to drive more value in any item we do. How do we, especially private label, but how do we upsize the pack while improving the price per unit within the pack? Even when there was big inflation, if there was a 10% increase, inflationary cost increase in something, how do we get the vendor to eat a little of it, will eat a little of it? Needless to say that still the majority of that increase is going to be in the price, but how do we also, beyond that, from a manufacturing standpoint and a packaging standpoint, how do we lower the price by a few extra percentage points by figuring out how to get x percent more cell units on a pallet by changing the configuration of the pack size.
We focus more on that than anybody I know because we’re taking our $230 billion or $240 billion in sales and dividing it by 3,800 items. So we have many items that are $50 million, $100 million, $300 million, $500 million items. And when we can do that, we think that we do a good job of that.
Brandon Cheatham: So that’s to say, I mean, you think that you’ve got maybe a little bit of a cost advantage over your competitors, so they’re not able to quite match you when you make moves like this.
Richard Galanti: I’m sorry, what was that?
Brandon Cheatham: You have a cost advantage, a little bit of a cost advantage, compared to your competitors. When you take prices down, they can’t quite match you. And so that’s why you’re able to get your price gaps as wide as they have been?
