We’ll see a mid-single-digit wage increase this year a tiny bit higher than 2022, and we’re going to absorb some costs, particularly on the health care side. Health care inflation is pretty prolific, and we’re going to absorb some of that cost at corporate. So we think those are the right investments for our team. The impact of 2023 of that basket of activities is about 30 basis points of deleverage on SG&A. And on the IT side, we’re making investments that we need to make in the business to improve our capabilities, and this is really about modernizing our platforms. These are investments in data analytics, AI and new systems and some of those are pivoting to cloud-based systems, and those costs can’t be capitalized. So we feel good about those investments and what they do for our business.
It allows us to go faster. And those investments we think driving leverage — will be driving leverage outside of those investments and focus on efficiencies. So if you take those out, we’d be levering the business. The IT investment is about 30 basis points as well and our guide reflects all of this. And so we feel good about that as well. On capital, we’ll see a little bit of an increase in capital next year, not outsized increase at the low end of our range, 10%. Again, we’re very energized about where we’re focused on the business in terms of opportunities for automation and modernization of DCs in the supply chain, and again, on IT. There’s IT as platform investments and things that we want to do that we see benefit in. Many of those projects on the supply chain allow us to consolidate and close old DCs, and you can imagine that’s kind of big benefit.
And so taken all together, we think these are the right things to do for next year. We’re still expecting margin expansion and a topline guide of 6% to 7%. So we think all of that together makes the right sense for where we are.
Kate McShane: Thank you.
Operator: And the next question will be from Greg Melich from Evercore ISI. Please go ahead.
Greg Melich: Thanks. Just wanted to clarify that last question, and then I had a follow-up on inflation demand. The 30 and the 30 bps or 60 bps of OpEx headwind, presumably that’s offset by more than 60 bps of gross margin expansion, and what’s driving that?
Bert Nappier: Yes. So on the margin side, we’re going to carry the momentum that we had in the fourth quarter. Our teams are doing absolutely reliant job of executing our core strategies on pricing and sourcing capabilities. I think in my prepared remarks, I talked about a 160 basis point increase in the fourth quarter just from the execution of category management, pricing and sourcing activities, that’s going to continue. We expect that to continue into 2023, and so that success is what we have in our forecast. We’re looking for gross margins to be up in the range of 20 to 40 basis points for 2023. We don’t really see a lot of headwind there. Anything in terms of what we’re looking at from FX or inflation or any of that, it’s pretty negligible at this point.
So we’re bullish on our execution of our gross margin activities and that helps us expand margin overall. The SG&A impact on those two investment side are offset by other efficiencies. So when you look at the full year, we expect deleverage of 30 to 40 basis points in total. I gave you 60 basis points of deleverage, and so you’ll see that we’re making some ground up in driving leverage outside of those two investment categories where we can be more efficient and smarter in the business.
Greg Melich: Got it. And then my question on top line isn’t — inflation last year, I think in the Paul what you said it was mid-single to high single, so let’s call it 6% or 7% in auto and low singles in industrial. What’s in your assumption this year when you did your 4% to 6% guide for each business?
