Jake Bartlett: Got it. Great. That’s really helpful. And then in the context, and I know it doesn’t – certainly doesn’t seem like it’s happening so far as gross profits per case remain robust and have been robust for your larger competitors as well. But with a lot of these salespeople coming on industry-wide the macro is still somewhat under pressure. Do you expect price competition to increase? It seems like that’s still a risk to the gross profit per case story out there. It hasn’t come to fruition. But how much of a risk do you think that is that all these sales guys, people hitting the market are going to have to start competing a little bit more on price?
David Flitman: Yes. I think this has always been a competitive industry, and it always will be. And things changed during COVID. And I think I would describe the competitiveness out there now is back to pre-COVID levels. It’s very fragmented. There’s a lot of competitors out there. Jake, that doesn’t deter us at all. We’ve got a differentiated model. But I think it underscores the importance of two things. One is all the initiatives that we have underway that we control to continue to drive that improvement in gross profit per case and then looking at ways to continually get more productive and take cost and waste out of our system. That’s why this 3% to 5% productivity target is so important to us. That’s why the MOXē penetration is important because it allows our sales team to be much more productive in front of the customer.
Not chasing the back office stuff, but selling the value that we bring, selling great products and importantly, helping our customers solve the problems.
Jake Bartlett: Great. Appreciated.
David Flitman: Thank you.
Operator: We’ll take our next question from Mark Carden with UBS.
Mark Carden: Good morning. Thanks so much for taking the questions. So CHEF’STORE was a bit of a headwind in 3Q to a slightly greater extent than it was in 2Q. Is this simply being driven by residual effects from the systems conversion issue and the need to win back some of these customers? And then how should we think about the impact here over the course of the next few quarters?
David Flitman: Yes, I think you’re hitting right in the center of the target there, Mark. As we’ve said now, the systems change is largely behind us. We’ve had some lingering effects in terms of lost business through the course of that, which started in the third quarter of last year. Encouragingly, we are seeing month-over-month sequential improvement and more recently, week-over-week improvement. So I’m encouraged by the ramp-up. As you heard Dirk say, we expect to be in a position to flat to growth by the end of this year, exiting the year with the goal of driving strong topline growth next year. And I think largely, we’re on track to do that. So I’m very encouraged by what I see. We continue to invest in the business. We’ve opened one new location already in the fourth quarter in Virginia, and we’ve got a couple of more planned in the Carolinas here before the end of the fourth quarter.
So progress continues, and I expect that, that ramp rate will continue here as we exit 2023.
Mark Carden: Okay. Great. And then on Renzi, I know it’s still early, but how is the integration fare relative to your expectations? And then in context with Saladino’s, do you think you may have capacity to acquire at a faster pace while also, of course, understanding that you don’t necessarily need to lean on M&A?
David Flitman: Yes. I think Renzi has gone even better than I could have imagined. It’s gone extremely well on the integration front. We put a very strong leader in place there. We’ve had a great cultural fit. Importantly, we haven’t lost any key talent, and it’s been very transparent and a non-event for the customers in the market. So we love it. There’s not enough good, I can say about how Renzi has gone. It’s all very, very positive. And then the second part of your question again?
Mark Carden: Just the second part, basically, with your new acquisition, do you guys think that you might have the capacity to acquire at a faster pace, again, understanding that you don’t necessarily have to acquire?
David Flitman: Yes. I think, as I said, it filled a geographic void for us, particularly on the independent side there where we were serving that market. It’s kind of hard to get to the Central Valley from San Francisco or L.A. very efficiently. So it solves that problem for us. And importantly, we have plenty of chain business in that part of the country and the half of that business that we’re acquiring that was chain related will help us serve that segment of the customer base also more effectively. So we’re excited about it from all those angles. It just makes sense at the right time. And importantly, as I’ve said a number of times this morning, a great multiple that we paid for.
Mark Carden: Great. Thanks so much. Good luck.
David Flitman: Thank you.
Operator: [Operator Instructions] We’ll take our next question from Andrew Wolf with CL King.
Andrew Wolf: Thanks. Good morning. I’d like to follow-up on some of the questioning on the labor productivity. And you’ve experienced accelerating case growth in the quarter and sort of for the year as well. You’re in a tight labor market and you had good results. So that’s pretty impressive. But to what extent can you measure or just anecdotally talk about to what extent hiring more fresh people who’ve obviously come in relatively low in terms of productivity as you’re growing. How much of that impacts the labor productivity metrics that we’re able to discern.
David Flitman: Well, I think attracting talent is important. And I would say the inflow of applicants for our jobs has increased to the point where I would say it’s relatively the same as it was pre-COVID. It’s always been the challenge to retain those folks through the course of time. And that’s why we leaned in so hard around this flex scheduling pilot. And while initially as you start those pilots, you need to add a little bit of headcount, it actually hurts your productivity. What we’re seeing is double-digit improvements in turnover. Obviously, that leads to reduce overtime and improve productivity in the long run. And we’re seeing that everywhere we’ve taken that model. So I think we’ve got a unique approach that makes a lot of sense for us and will help us retain people, which is the key here to driving productivity over the long haul.
And as Dirk said, we’re pleased with our driver results, both in terms of turnover and productivity being back to pre-pandemic levels, and we’ll continue to drive improvement from there.
