John Swygert: I think I said earlier in the call that our supply chain costs for 2022 on a full year basis came-in in the range of 13%. Our 2023 guide is more in the range of 10%. And we’ve said on past calls that supply chain cost range in the range of 7% to 8% pre-pandemic. So that gives you a quantification if we got all the way back to pre-pandemic levels. What the improvement would be? There’s a small deleverage that we have relative to wage investments in the DC, but that’s a relatively minor portion relative to the gap that I just referenced.
Brandon Cheatham: Got it. Okay. That makes sense. Last one from me. Does your new DC, does that potentially allow you to get product to stores quicker? And could that change how you approach the closeouts that you might purchase at various points in the season?
Eric van der Valk: Brandon, it’s Eric. No, our new DC, I mean, it’s a matter of hours really, the difference between an existing DC and new DC to some of the stores that are friendly from a geographic standpoint to Illinois. So the difference of a 12 hour drive versus a six hour drive doesn’t make really any difference in terms of our ability to deliver units to the customer.
Brandon Cheatham: Yeah. I was just curious if there was like different technology that might dramatically improve the throughput of you being able to accept goods into that DC?
Eric van der Valk: Sure. Yes, a little different spin on the question. We are looking at all the options that are available to us that in terms of automation or semi automation, we’re in that process of making the selection of our material handling equipment now over the next 30 days to 60 days. So we’re looking at it more from a financial standpoint and what is the return on the investment if we were to spend on automation, but also to reduce our reliance on human capital in general is a good thing considering it’s been a risk for retailers, especially over the last several years. So we are considering. But to just connect that to your first question, I don’t know that it’s going to make any difference in our business from a top line standpoint.
It’s more about overall throughput and productivity that it would be about moving products faster through DC to a store. Again, it would come down to a matter of hours and not days. So I don’t see those investments making a different top line.
John Swygert: Yeah. Paul, basically, the — DC expansion is really built out to be able to reduce the stem miles we’re driving and be able to continue to grow stores further and further apart and be able to service them.
Brandon Cheatham: Got it. Okay. Appreciate it. Good luck guys.
John Swygert: Thanks, Brandon.
Operator: Thank you. One moment. We have a question from Scot Ciccarelli from Truist. Your line is now open. We’re still not hearing you. I’m not sure if you have a mute button.
Unidentified Participant: Hey, good morning. This is (ph) calling in on for Scot Ciccarelli. With the strength you guys are seeing in consumables, do you have any plans to expand your offering there to meet the shifting demand trends from consumers?
John Swygert: Hi Josh, we don’t have any plans to expand consumable offerings in the stores. We have plans to continue to turn the inventory and refill what they’re buying, there’s really — our model is pretty simple. We keep the consumable levels in the, call it, 22% range and we’re going to stick with that. But we are continuing to turn that faster and faster as they keep buying it.
