Erica Eiler: Good afternoon. This is actually Erica Eiler on for Rupesh. Thanks for taking our questions. So I guess first, I was hoping maybe you could give us a quick download, maybe on how you’re feeling about the health of your consumer right now? I mean, obviously some concerns out there on student loan impact starting to roll in here, those restarts. So maybe any color you can provide on how you’re thinking about discretionary from here, maybe some of those concerns out there? Anything on trade down or private-label, anything of note on that front in terms of consumer behavior as well?
Richard Galanti: Right, well, look, first of all, first and foremost, our traffic continues to do very well. Being up continually 4% to 5% on a year-over-year basis is great. And our renewal rates continue to be very strong. So that’s the starting point. It makes sense to us on big-ticket discretionary that’s where you’d see the biggest weakness. We see some of that in some areas going back. When we look at our numbers compared to MBD, that tells us where we are versus our competitors. Overall, not in every category, but overall we tend to do better. So even a negative number here is a lower negative number elsewhere. So – and again, what do we do, we brought in some smaller ticket items that are impulse snack items to get an extra partial item in everybody’s basket.
So, yes and newness, bringing those new items. And there’s not been a whole lot in television. Our unit sales and TVs are pretty good, but the average price point has come down, as they do anyway, there’s always deflationary. When you don’t have new technology yet and that’s just, we haven’t seen a whole lot of new stuff yet there. Gaming is good right now and Christmas is good. I mean, we’re one of the – not the only one, but one of the few that are bringing in seasonal items early, everything from decor to trees, to toys, that’s starting off well so far. But it’s new, it’s in the last few weeks.
Erica Eiler: Okay, that’s really helpful. And then just – go ahead.
Richard Galanti: I’m sorry, what else did you ask?
Erica Eiler: And then just shifting gears, so, I just wanted to touch on Retail Media. So obviously a significant focus on driving retail media at some of your peers. So just curious if you could maybe talk a little bit about what Costco is doing in this area and the bigger opportunities that your team sees here?
Richard Galanti: Well, part of that is some of the things we’re doing with digital and mobile and the app. And we’re not giving out quantifiable numbers, but certainly, some of our competitors are talking about doubling these numbers in the next two or three years. In my view, there is some low-hanging fruit out there and we’re actively working on it. We’ve hired a couple of people that are helping us with that as well and more to come.
Erica Eiler: Okay, great. Thank you so much.
Operator: We’ll take our next question from Paul Lejuez with Citigroup.
Brandon Cheatham: Hi, everyone. This Brandon Cheatham on for Paul. I just wanted to – when you look at the retail landscape, I was wondering, how did your wages compare to your competition? Are you seeing similar trends in inflation pressure on the wage front and anything that you can help us with, what your plans are over the next couple of quarters?
Richard Galanti: Well. First of all, we’ve always prided ourselves in providing the best hourly wage package out there, wages, benefits, contributions to 401(k). I’m using U.S. numbers here, but our average U.S. – 90% of our employees like many big retailers are hourly. And our average hourly wage is approaching $26 is in the high-$25s. That’s on top of a very rich healthcare plan, where the employee only pays around 11% or 12% of it I believe. And on top, little less than that – and on-top of that, irrespective of what employee contributes to his or her 401(k), we contribute anywhere from 3% to 9% based on years of service. So you’ve got a 20-year cashier making on a full-time basis in the mid-60s with another $4,000 or $5,000 being contributed to his or her 401(k) plan with a very rich healthcare plan.
So we stand apart in our view compared to anybody. Our pressure is that, it comes from ourselves. In the last few years, as there have been wage pressure, starting with the frontline workers during the beginning of COVID, we like many retailers added a 2% premium – $2 premium rather. We kept it longer to our knowledge than most anybody for a full year and at the end, we kept a dollar in there. And since then we’ve had at least three or four increases on top of the normal top-of-scale increase that we do every – generally have done every year – we have done every year. So we’ll – in our view, the pressure comes from us and we feel that we’re way ahead of our competition in that regard.
Brandon Cheatham: Got it. That’s helpful, thanks. And I think you mentioned the next iteration of the app, you’re going to be able to scan barcodes. Is the idea that eventually the customer are going to be able to scan and go and how could that help flow operations in your stores, if that is the case?
Richard Galanti: I don’t think we’re prepared for Scan and Go, yet. We’re just going to scan, but they can’t go. So at the end of the day, the first order of business is getting the merchandise on there and haven’t had numbers that where a member, he goes online to say, hey, you can also get this currently at your local location. So knowing what’s in store when somebody wants to come out, I think that’s going to be a big positive to start with and part of the scan is to be able to get more product information on the item as well.
Brandon Cheatham: Sure, that makes sense. Okay, I appreciate it. Good luck.
Operator: We’ll take our next question from Greg Melich with Evercore.
Greg Melich: Hi, thanks. I have two questions, Richard. First, I’d love an update given the volatility in gas prices last year and a half is to, where we are on penny profit? I know it has improved a lot, but I’m curious it came back down in the last 12 months or if it’s sort of stabilized at that higher level?
Richard Galanti: Well, we don’t give specific numbers. Gas has been stronger for us and we believe all retailers in the last few years. In fact, it was Q4 last year, which I think it was our strongest quarter, recognizing it’s 16-week quarter. This fourth quarter, it was still strong, down from its strongest a year earlier on a weekly basis, but nonetheless quite strong. And so it’s part of the profit picture currently of all big retailers that sell gas, the supermarkets, the Walmarts and the Costcos of the world. So it’s still a profitable business. It’s – our view has been, you used to be when prices – given that the return it so fast, literally almost daily, when profits are going up – I’m sorry, when the price of gas is going up, the guy down the street is turning it every eight or nine days is paying a little less four days ago.
