Rodney McMullen: Yes. It really gets back to overall. I think it’s incredibly important to understand that we connect with the customer in multiple ways, and fresh is a critical component of that. We fundamentally assume over time, the market is going to get more competitive. We have done that for 25 years. We will continue to do that. And that’s the reason why we put so much investment energy on personalizing experiences, supporting our associates in ways any way we can, pay, continue in education, even additional support on mental health and especially in today’s environment. And what we have found in every environment by supporting and connecting with the customer from a full fresh and friendly experience and then having good prices and very aggressive promotion and then personalizing the experience, we are able to support the customer.
One of the things that also supports gross margin as we continue to expect larger growth in our fresh departments, which have higher margins in center store. And then when you look at our alternative profit businesses and some of those businesses have margins better than what the center store would be. So, for us, it’s €“ you really have to look at all of those things together and look at those things over time, and we feel really good about the business model that we continue to develop and grow at our company.
Michael Lasser: Understood. And my follow-up question is on the outlook for inflation. What are you hearing right now from your vendor about their desire to raise prices into 2023. Gary, you said previously that there will be €“ or some of the prognostications are for 2.5% to 3% food at home inflation next year. If you were to not raise another price from here, how much inflation benefit would Kroger experience in 2023 just from the wraparound effect of what you have already raised this year? And then when you meant to 2.5% to 3%, would it be another 2.5% to 3% on top of that?
Rodney McMullen: Well, I will make a couple of comments, and Gary, you can think about some of the specifics. If you look at in our fresh departments, clearly, inflation is slowing down in many categories. Chicken would be an example. You are starting to see that in some of the other categories as well. And I always make the comment high inflation solves high inflation because farmers produce more when their margins improve. If you look at on CPG companies themselves, right now, it’s kind of mixed. Some CPG companies are willing €“ much willing to have higher prices and give up growth. And what we find is when CPGs do that, our brand is so strong, we really gained share. And that helps the customers budget and it also improves the stickiness and the loyalty of that customer as well.
So, it’s €“ what do they always say, all short statements and economics are wrong. And I really think you have to look at all the moving parts. I don’t know, Gary, anything else you want to add to Michael’s?
Gary Millerchip: Yes, I think you covered it well, Rodney. I think Michael, as Rodney mentioned, we are seeing that fresh is certainly starting to see some change in trajectory on inflation. So, I think it is the grocery category that’s the most stubborn if you like, in terms of where it’s holding in inflation at the moment. And as Rodney said, I think from €“ as we look forward from our perspective, if that were to continue without being sort of supported by true cost increases, then that creates an opportunity for us with our brands to improve margin and grow share over time. So, I think that’s the way we think about it in general.
Rodney McMullen: Thanks Michael.
Michael Lasser: Thank you very much. Have a great holiday.
Rodney McMullen: Thank you.
