Rick Dreiling: Yes. Another effort that we’re working really, really hard on. In regards to the number of cooler doors, we’re going to go from three, I believe, 10 or 12 is the plan. We’ll have a door that is $1.25, couple of doors will be $3, $4, $5, and we’re actually looking as we look at the multi-price point to expand that even more. The interesting thing is when a frozen food item goes into the basket, the basket actually gets larger. So, your point about driving traffic, driving transactions is spot on. The other interesting thing, when we went to $3, $4 and $5 that allowed us to offer a family serving versus at $1.25, where it’s just a single serve. So, again, much more appealing to the actual — to the consumer. The other thing, John, the fact that we went to multiple price points allowed us to put ice back in the stores.
And ice is always a big seller. When we were locked in on $1, we had to take it out and we went to a larger bag, 7 pounds, took it to $2, and again, we’re back in the ice business. I also agree that what will happen is we will keep growing sales and allow us to leverage our SG&A down in the stores. And then I also want you to think about the fact as we roll the Rotacarts out, that we’ll be delivering to the Dollar Tree stores in those also. So, all of that time that it takes to unload a truck will be invested in putting more multi-price point items out on the shelves.
John Heinbockel: Okay. Thank you.
Rick Dreiling: Thanks, John.
Operator: Thank you. Next question is coming from Paul Lejuez from Citi. Your line is now live.
Rick Dreiling: Good morning, Paul.
Paul Lejuez: Good morning. Curious if you could talk about the monthly trend for each segment. Also curious to hear about your performance in urban versus suburban and rural locations. And anything that you would say in terms of the competitive landscape that you see changing out there from a pricing perspective? Thanks.
Rick Dreiling: Yes. Great question. As I look at the flow across both banners through the quarter, it was pretty consistent all the way through. We started off strong and it remained strong through the balance of the quarter. In terms of performance, I think it’s pretty even, but I will make this observation. It appears that the trade down from a higher income customer it’s coming more in the urban environment than in the rural environment. So that’s — it’s an interesting spin, but it’s pretty even all the way across. In regards to the competitive environment out there in regards to pricing, the way I see it, it’s very rational right now. Nothing significant is going on. I would say the ad collateral is basically the same it’s always been. Everybody’s kind of — I think everybody is on the same playing field right now.
Operator: Thank you. Next question is coming from Matthew Boss from JPMorgan. Your line is now live.
Rick Dreiling: Good morning, Matt.
Matthew Boss: Good morning, Rick. Great. Thanks. So maybe a two-part question. Rick, at the Dollar Tree banner, could you elaborate on the traffic trends? It seems like that’s the real positive progression here. Any change in momentum that you’ve seen in August? And maybe just speak to market share trends that you’re seeing by category at Dollar Tree? And then, Jeff, on the expense front, I guess, is there a way to think about the progression of the foundational investments that you’ve been putting in place as we think maybe beyond this year? It seems like store standards and wages maybe two of the more stickier initiatives. Or maybe just to ask differently, what do you see as the comp that we need to leverage fixed costs maybe next year in the model?
Rick Dreiling: So, I’ll take the first part, Jeff. Matt, the traffic is steadily increasing in Dollar Tree. Our traffic was up 9% in quarter two. Really, really pleased with that. Your other question is, discretionary was still up in Dollar Tree. It was up 3.9%. The consumables though were up over 11%, which is our way — remember, consumables drive that traffic. And we have, by unlocking that price point and as we continue to unlock the price point, it’s going to open up more opportunities for us to bring in really powerful value items. So, pleased with customer traffic. In fact, I’ll throw this in, customer traffic was up 3.4% on the Family Dollar side. So, we are seeing movement now with the customer base.
Jeff Davis: And as it relates to the investments that we’re making, they’re really twofold. So, you had expense investments as well as CapEx. As we think about the expense investments, I think you’re spot on with respect to the wage and store standard elements. There’s a few elements that also transcend into our supply chain as we need to increase — improve the standards in our DCs. We’re right on track with respect to how we thought they would play out over the course of this year and then as we think about going into next year. From a CapEx perspective, you kind of layer on top of that, then the work that we’re going to be doing with our Rotacart rollout and what we need to do with trailers and lift gates and the actual [indiscernible] parts as well as what we’re going to be doing from an IT perspective in adding additional capabilities with systems.
As you think about what’s the level of comp that we’re going to need to deliver, there’s going to be a number of factors that you have to take into account and, quite honestly, we are working through that right now as we look out. One is going to be what’s going to be rate of inflation as it relates to our cost in the marketplace, especially in labor, which is one of our more significant areas. The other piece, of course, is going to be in sales mix. The comp, you need a little higher level of comp when your sales mix is more weighted towards consumables versus discretionary. We believe, over time, we’re going to see this mix balance out and be not as significant a shift on a year-over-year basis, which you’re seeing right now. Once again, that’s over the long term.
We had talked a little bit about this in the Investor Day, where we think that both Family Dollar and Dollar Tree will kind of average out over the period of time. So, I’m not going to give you a comp number that we need to meet in order to leverage expenses at this point in time, because there’s a number of factors that we need to give a little more thought to and quite honestly, depending on what the economy does.
Operator: Thank you. [Operator Instructions] Our next question is coming from Simeon Gutman from Morgan Stanley. Your line is now live.
Simeon Gutman: Good morning, guys.
Rick Dreiling: Good morning.
