John Howard: Scott, this is John. Your question made me realize that I misspoke in my inflation response. So I want to correct that data. So our Q2 inflation that I said was just under 11% is correct. When I said just over 11% for Q2 last year, that was Q1 of this year showing that sequential deceleration that Sandy was talking about. Q2 last year was just under 6%, but the key is exactly what Sandy highlighted that sequential deceleration. So I apologize for that. When you asked your question, you made me realize I gave the wrong data point.
Scott Mushkin: I appreciate the clarification. So then the last thing is we look at this business, My guess is, obviously, pulled your guidance. It seems like expense growth remains an issue across not you guys, employee costs, all this and maybe gross margin as you kind of look at it right now, it’s going to be — can take time to kind of build that as the efficiencies and other things come in. Is that the right way to look at this?
Sandy Douglas: Yes, Scott, the way I would look at it is and I’ll just kind of walk down the P&L for you. The top line is really strong. And the margins that we’re getting from customers is solid. As I travel around the country and meet with customers, and I’ve been in 30 or 40 of them in — of those meetings in the last 30 days. What we’re working on for customers and being driven by customers is resonating and we’re getting good feedback about our improvement for them and the relevance of what we’re bringing to help them succeed. So I feel really good about the top line. And margins generally flow as a function of that value. And customer mix shift here or there or retail’s margin shift into wholesale, those things will move around a little bit.
But basically, we’re steady there and therefore the top line will convert. The area where we’re elevated and if you go back to fuel the future, one of our KPIs was to be 10 basis points a year down in our supply chain expense and obviously that’s gone the other direction. And that’s the opportunity we have and we made the decision to make sure we were taking care of our customers as best as we possibly could and then work on efficiency from that position. And I started talking about the improvement agenda a few quarters ago and that’s now taken the form of a detailed transformation plan to attack that. And we believe there is a set of very common sense proven approaches that we can take that will and further increase our quality to our customers, but then also drive efficiency in the way our system operates.
Efficiency in our operating expenses and efficiency in our capital. And while some of that will be achievable with discipline, and therefore be very high returns. Some of that will require investments in technology and automation where we’ll have very disciplined returns. But that implementation is the center of our transformation plan and we look forward to giving the Street more details as we go forward.
Scott Mushkin: Perfect. Thanks for taking all my questions.
Sandy Douglas: Thanks, Scott.
Operator: And that does conclude the question-and-answer session. I’ll turn the conference back over to Sandy Douglas for any closing remarks. Sandy Douglas Thanks, operator. And thanks to everybody for joining us this morning. While I’m not pleased with the results that we reported today, I remain highly optimistic about UNFI’s ability to create value for our customers, suppliers, associates and as a result for our shareholders. I hope you’ve heard and take away from today’s call that we are on a path to transform UNFI from the bottom up with an enduring focus on serving our customers in the best manner possible. We believe our focus on continuous improvement will lead to growth and perpetuate the flywheel effect that I’ve described in the past and generate solid returns for our shareholders.
For our customers and suppliers, we thank you for your continued partnership and the business we do together. For the UNFI associates listening today, our thanks to each of you for everything that you do for our business, our customers, our communities and each other. And for our shareholders, we know this is a challenging quarter, but we thank you for the trust you placed in us and we will work diligently to deserve that trust. While we have a lot of work to do, I remain extremely optimistic about the value creating potential in front of us given our unique and unmatched customer value proposition. Customer feedback and contract renewals support this thesis. Our technology and operating capabilities represent meaningful improvement opportunities and we will invest in a disciplined, timely and appropriate manner to capture the immense benefits that they represent.
We know we have work to do and we’re doing it. We look forward to updating all of you again after our third quarter.
Operator: And this concludes today’s conference call. Thank you for your participation. You may now disconnect.
