John Evanko : And gosh, over an hour ago, you guys — one of the first comments you made on the call was manager staffing, I think, at historic highs. I mean is that the GM and all assistant manager positions or — just give a little bit more color in terms of the stability in that essential role.
Ricardo Cardenas: Yes, John, that is all manager positions in our restaurants. So General Manager, Well, general manager, it’s a little bit harder to be all-time high, if you have one general manager for every restaurant — that makes sense. But we’re pretty close to that. So if you think about our restaurant manager staffing, it’s at all-time high. We have more managers per restaurant today than we did before COVID. And part of it is because we are giving them opportunities to grow and we are proud of the fact that we do a lot of promotions from within. So when somebody knows the brand they’re working for and they become a manager there, there’s a little bit more loyalty to that brand. So — and then the other thing, when you think about all the things we did during COVID, we made sure that our managers were we didn’t really eliminate our manager teams during Cove.
We kept them on because we knew how important they award to bring our team members back. And that’s why we feel like we’re well staffed and we’re fully staffed to manage level.
Operator: We’ll take our next question from Nick Setyan of Wedbush
Nick Setyan: Just a follow-up to an earlier question. I think you said you expect total restaurant labor inflation to go down by 50 bps sequentially through the end of the year from the 7% that we saw in Q2, that would imply for the year something around 7%, maybe slightly lower than 7%, but your total inflation guidance is 7% with 8.5% commodity inflation at the midpoint. So just maybe reconcile how we get from the combination of where total labor inflation and commodity inflation guidance is versus the total inflation guidance.
Rajesh Vennam: Yes. I think the point here is you have to look at other line items. So utility is probably in that mid-teens — low to mid-teens. That’s part of it. And then we are seeing all other costs being in the low to mid-single digits. So when you take that into consideration, the total inflation of is what we’re expecting. So yes, you’re right, total restaurant labor inflation is approximately 7%. And you combine that with 8.5%, the big point of that 8% to 9% on prudent beverage. And then utilities in that mid-teens and all other costs low to mid-single digits, that’s how you get to 7% on the total. So we’re talking about the total cost base. That includes everything.
Nick Setyan: Got it. And then as we kind of think about the inflation gap versus food at home, the gap has been pretty favorable for restaurants for a few quarters now, and that’s potentially narrowing and maybe even may reverse next year in terms of calendar ’23. How are you thinking about the promotional cadence and the overall competitive environment as that grocery gap maybe even reverses.
Ricardo Cardenas: Yes, Nick, if you think about what people get when they go to a full-service restaurant, they get more than just the food. They get the experience. And that was — that’s what people are coming to us for. a great value already, but there’s more than just the commodity that we put on the plate. It’s all of the service, all of the other things that people get to do and being able to sit and spend time with their family and friends. And so yes, if there’s a little bit of a shift in away from home versus at home, we still think we’ve got a great value proposition. That said, we’re not going to get into what happens in promotional cadence happens, right? So if our competitors start doing significant discounting promotions, Can’t say what I think they’ll do.
I just think their margins are — makes it a little harder to do that. We’re going to react the way that we’ve been talking about. We’re going to continue to focus on driving our core guests driving profitable sales growth, and that’s our focus for now in the near future.
Operator: Our next question comes from Jake Bartlett with Truist Securities.
Jake Bartlett : My first one is on the commentary of expecting less traffic than before. So taking the traffic assumption down by 50 basis points. And I just really want to understand what is driving that? It seems like the — in the second quarter, it seemed pretty solid or not diversion from expectations. So are you — the question really is your outlook for the next 2 quarters a little bit less than you were thinking before? We’ve seen when put out for November, the slight deceleration year-over-year but also a deceleration versus ’19. So if you could maybe comment on that — on the industry and what — how concerned investors should be about a deceleration just on the industry-wide in November?
Rajesh Vennam: Jake, I think you’re activating too much signs to this method here because when we look at how we do this, the midpoint of our guidance is about 75 basis points higher than last time with 1% pricing. So really, what we changed the midpoint by 25 basis points on traffic. That’s within the margin of matter of many models we build. I mean, I wish we only had a 50 basis point margin effect around our models. It’s obviously a lot wider. I hate to admit it, but I don’t think — we’re not experts at prognosticating this business on. So we’re doing the best we can, and that’s our best estimate at this point.
