So really kind of taking almost a CPG type mindset to that approach to our products and saying, how do we maximize value. And I would say the team would probably tell you they’re maybe a third of the way through that work right now. So still a lot of opportunity, we believe, to continue to get stronger in Our Brands performance. From a supply chain perspective, I mentioned it in my comments, but we continue to invest significantly in the supply chain because the team is doing a great job identifying ways in which we believe we can continue to drive efficiency in our supply chain strategy by leveraging data more effectively and technology, continuing to optimize the routes that we’re taking, the capacity that we’re utilizing on those routes.
And we believe there’s still, again, a significant opportunity ahead of us there. Alternative profit, you’ve heard us talk about before as being we’re still in the early innings of our mind about the potential for alternative profits can be, particularly as we keep growing digital and driving engagement through our Kroger Precision Marketing business. So I think, overall, we would say that we’ve been on a journey for a few years that we’ve talked to investors about how do we manage these levers to be able to continue to improve profitability over time. And I’d say we have a good degree of confidence that we see continued plans in those areas. Now all that being said, obviously, we’re going to continue to invest in the customer and continue to deliver more value there to balance that model so that we’re driving top line growth over time as well.
Edward Kelly: All right. And just a quick follow-up. I don’t think Albertsons has had a large opioid settlement yet. Is that correct?
Rodney McMullen: That would be correct.
Edward Kelly: Okay, great. Thank you.
Operator: Thank you, Ed. Our next question is from Robert F. Ohmes from Bank of America Merrill Lynch. Robert, your line is now open. Please go ahead.
Robert Ohmes: Thank you. Can you guys hear me okay?
Rodney McMullen: Yes. Good morning, Robbie.
Gary Millerchip: Hey, Robbie.
Robert Ohmes: Okay. Excellent. You can hear me. Great. Hey, two follow-up questions on the C&S deal. The first one, just the ATCs two headquarters — regional headquarters, I guess, and the five private brands. Was that part of the original October outlined? Or is that sort of unique to this deal with C&S?
Rodney McMullen: Yes. It’s actually part — it was one of those things where we knew that it would be part of the consideration. But until you had a specific buyer, you wouldn’t know the specifics. So we had always had in the back of our mind that, that was something that might be needed in order to find a buyer that would be able to day one hit the ground running. But it wasn’t — it was one of those things where we could have managed it either way, depending on what the particular needs of that particular buyer would have been.
Gary Millerchip: And the only thing I would add maybe, Robbie, would be that if you think about SpinCo, of course, SpinCo was going to be — had to be set up as a full separate company. So it would have to be meaningful assets that would have moved with SpinCo for it to be a viable solution, not having any infrastructure other than what would have to move across from some of the Albertsons or Kroger business today. So that would have been probably more meaningful in terms of the impact that we not have move forward with a buyer like C&S.
Robert Ohmes: Got you. That’s helpful. And then it looks like there’s a fair amount of Kroger and Harris Teeter stores as part of the plan. Was that part of the October thinking or like I noticed the Harris Teeter stores, I guess, in Virginia, like was that part of the original thinking? Or is there a greater mix of Kroger banners as part of this?
Rodney McMullen: It was always part of the original thinking that some of the stores to be divested would be best for it to be Kroger stores. So that wasn’t something that was new to the analysis that was done late last year.
Robert Ohmes: Got it. And what’s the total Kroger banner stores in the C&S announcement?
Rodney McMullen: Yes. There isn’t a specific number yet. We’re still in the middle of the dialogue with the FTC so there wouldn’t be specifics. In the press release that would show by state the number of stores and the banners, but not — there wouldn’t be specifics at this point.
Robert Ohmes: Got you. And just last question, is there any difference in the expected dilution in year one, whether you do 650 or 411?
Gary Millerchip: Yes, as I mentioned earlier, Robbie, we’re really focused on the 413 store plan because we have a high degree of confidence that, that addresses all the areas that we think are important to have a viable operator in the markets that we’re divesting stores. And we believe the package is really effective in solving for that. So what we shared with the guidance back in October would still be very consistent now in our thinking based on the plans that we’re moving forward with. And if obviously, if our plans were to change over time, we would share more details around that. But we feel we’ve got a really strong plan and we feel the guidance that we’ve shared, nothing at this point would say that we have anything that would be a concern to move away from those guidances that we shared.
And if anything, I would say, between the work that we’ve done now to identify by the C&S and some of the additional work we’ve been able to do in planning for the merger with — in some respects with Albertsons, gives us a high degree of confidence that the plans that we shared are still very much the expectation.
