And all of that drives really strong member value. So I see a really unique opportunity for Sam’s to use this momentum as a jumping off point to accelerate, to driving growth through digital engagement, offering unique value through great items that consumers can’t get anywhere else, and a deep understanding of members in a way that will make us more relevant to them both in club and digitally, so we can appeal to an even broader set of consumers. So, yeah, a lot to go for. Really exciting. So thanks for asking.
Operator: Our next question comes from the line of Robbie Ohmes with Bank of America. Please proceed with your question.
Robert Ohmes: Thanks for taking my question. Actually, it’s a follow-up question on deflation. I was hoping Doug or anyone else could just talk about. Just to clarify what’s driving the LIFO tailwinds? Is it all general merchandise right now or is there grocery in there and Doug, you mentioned lowering grocery prices, but you also mentioned, I think, stubborn inflation still out there in your opening comments and so is there — just maybe even a little more color, like is dry grocery getting set to deflate? Is that what you guys are seeing? And then also, where do wage pressures come in? Do you think wage pressures are also sort of disinflating now?
John David Rainey: Robbie, good to speak with you. This is John David. I’ll start and address the LIFO part of the question and maybe hand it over to Doug and others. On the improvements that we’ve made there. That is, as you know, dependent upon the cost of goods that we’re buying. And we’ve seen the pricing level come down overall broadly. But I don’t want to miss the point to mention that our teams have actually done a really good job of working with suppliers to help affect that outcome. So this is not something that just happens to us. The team has worked to actually have this outcome, so it’s far better than what we expected when we went into the beginning of the year, and we’re actually pleased to see this outcome.
Robert Ohmes: And John David, is that — is just to clarify, is that general merchandise vendors or is that all vendors, including grocery vendors?
John David Rainey: It’s across all categories. It probably skews a little bit more to consumables and GM,
Doug McMillon: Robbie, this is Doug. Generally across markets, we have an inflationary environment. The U.S., and what we went through here the last few years is more dramatic than what I’d seen in the U.S. But of course had experienced that in Brazil and Argentina and other places. China is not really inflated. That’s an outlier as it relates to this conversation. But in the U.S. specifically, as I mentioned a few minutes ago, in the fresh categories, you see beef up, but dairy, eggs, chicken, seafood down. So commodities will do what commodities will do. General merchandise had been coming down and came down a little more aggressively in the last few weeks or months than the trend before that, which we think is a really good thing.
But it does start to have an impact on dollars when units — when the units don’t go up enough to offset the deflationary impact as it relates to GM. The dry grocery and consumables question feels like the key question Will it come down? Will those categories come down? We hope they will. On a two-year stack in Walmart US, John, I think we’re still mid-double digits, slightly up versus a year ago. But we think we may see dry grocery and consumables start to deflate in the coming weeks and months. And so as we look ahead to next year, we could find ourselves in Walmart U.S. with a deflationary environment. And John David mentioned earlier, that causes us to think about what are we doing with expenses. Are we ready for that? It’s too early to call how dramatic it’ll be.
And as we mentioned earlier, we are happy about it. We want our customers and members to have lower prices, and we’ll manage mix, and we’ll manage through it better than anyone. And it doesn’t change anything about our plan. All the things that we’ve been doing to change, to be able to serve people in new ways, like with pickup and delivery, the expansion of the marketplace, all the things that flow from that, that help us with operating income, all those things are still true regardless of what the top line dollar growth rate looks like as a total enterprise. And for a while now, we’ve been talking about four and greater than four. If you look back at the last three years, I’m hard-pressed to remember 2019 seems like a long time ago, but 2019 grew faster than 2018 on a calendar year basis.
So we had a trending growth rate moving the right direction, and then the pandemic hits, and then inflation hits. So if you look back at the last three or four years, We’ve been growing faster than four. If we find ourselves in a deflationary environment next year and we grow at four or a little less than four, or around four, as long as we’re growing share and improving what we’re doing for customers and members on the top line, that’ll be what it’ll be. We’ll get as much as we earn, but the operating income percentage will still go up because we’ve got this automation plan and we’ve got the digital businesses reshaping the income statement, which will help returns. So the plan is the plan we are executing. We’re just trying to communicate with you today as we release our results, what we saw the last part of October in Walmart U.S. in particular, communicate what happened with expenses.
