Q3 2023 SpartanNash Company Earnings Call

Speaker 1: recent SEC filing, you will see a discussion of factors that could cause the company's actual results to differ materially from these forward-looking statements.

You will see a discussion of factors that could cause the company's actual results to differ materially from these forward looking statements.

Speaker 1: Please remember that all forward-looking statements made today reflect our current expectations only. And Spartan Nash undertakes no obligation to update or revise these forward-looking statements.

Please remember that all forward looking statements made today reflect our current expectations only and Spartan <unk> undertakes no obligation to update or revise these forward looking statements.

Speaker 1: The company will also make a number of references to non-GAAP financial measures.

The company will also make a number of references to non-GAAP financial measures.

Speaker 1: The company believes these measures provide investors with useful perspective on the underlying growth trends of the business, and it has included in the earnings release, a full reconciliation of certain non- GAAP financial measures to the most comparable GAAP measures , which can be found on Spartan National website at www.spartanash.com forward slash investors.

The company believes these measures provide investors with useful perspective on the underlying growth trends of the business and it has included in the earnings release, a full reconciliation of certain non-GAAP financial measures to the most comparable GAAP measures.

Which can be found on <unk> website at www Dot Spartan Nash dot com forward slash investors.

Speaker 1: And now it is my pleasure to turn the call over to Tony. Thank you, Kelly.

And now it is my pleasure to turn the call over to Tony.

Thank you Kelly and good morning, everyone glad to be here.

Speaker 2: Kick us off. I want to call out some highlights for our most recent ESG report that we published last month. We are still early in our sustainability journey and are making strides that I am happy to share with you all today. From 2021 to 2022, we reduced sleep mileage by 12% exceeding our 10% goal.

First off I want to call out some highlights from our most recent ESG report that we published last month, we are still early in our sustainability journey and are making strides and I am happy to share with you all today from 'twenty to 'twenty, one to 2022, we've reduced <unk> by 12% exceeding our 10% goal.

Speaker 2: We decrease DCO zone depleting emissions by a whopping 59%.

Decreased D C ozone depleting emissions by a whopping, 59%, we converted 85% of our retail stores and Dcs to led lighting and we diverted more than 4 million pounds of food from landfills.

Speaker 2: We converted 85% of our retail stores and DCs to LED lighting. And we diverted more than 4 million pounds of food from landfill.

Speaker 2: On the governance side, we demonstrated our ongoing commitment to board refreshment, exemplified by the addition of three new directors in 2022 and one new director this past August .

On the governance side, we demonstrated our ongoing commitment to board refreshment exemplified by the addition of three new directors in 2022, and one new director this past August.

Speaker 2: As a people first company, I'm incredibly proud of the team's continued focus on safety. Since 2020, one of our biggest accomplishments has been an improved safety record, including a 72% decrease in lost time incidents.

As a people first company I am incredibly proud of the team's continued focus on safety since 2021 of our biggest accomplishments has been an improved safety record, including a 72% decrease and lost time incidents.

Speaker 2: Over the past year, our ESG committee and subcommittees have strategically embedded our 2025 ESG goals into our master action plan. We are committed to creating solutions and improve the lives of our associates and the communities we serve. We encourage all stakeholders to read the 2022 ESG report, which is available on the Policy

Over the past year, our ESG committee and subcommittees have strategically embedded our 2025 ESG goals into our Master action plan, we are committed to creating solutions that improve the lives of our associates and the communities we serve.

We encourage all stakeholders to read the 2022 ESG report, which is available on the company website.

Speaker 2: We had the privilege of serving the U.S. military. As a grocery wholesaler, we bring the taste of home to the men, women, and families of the U.S. military around the world. This Veterans Day weekend, we honor those who have served the United States of America.

We had the privilege of serving the U S military as a grocery wholesaler, we bring the taste of home to the men and women and families of the U S military around the World. This veterans day weekend, we honor those who have served the United States of America.

Now turning to our Q3 results.

Speaker 2: Consolidated net sales came in at $2.3 billion, a decrease of 1.4% from a year ago.

Consolidated net sales came in at $2 3 billion, a decrease of one 4% from a year ago.

Speaker 2: In the last quarter, we continue to experience a decrease in sales on our Amazon business.

Similar to last quarter, we continue to experience a decrease in sales on our Amazon business.

Speaker 2: Outside of this impact, we observed positive sales trends in our wholesale segment as well as for the consolidated company.

Outside of this impact we observed positive sales trends in our wholesale segment as well as for the consolidated company.

Speaker 2: We continue to work closely with Amazon as they manage through changes in their grocery formats.

We continue to work closely with Amazon as they manage through changes in their grocery format.

Adjusted EBITDA increased 6%, improving 19 basis points compared to the prior year quarter, our solid bottom line performance amid a challenging environment is attributable to the benefits from our transformational initiatives.

Speaker 2: Adjusted EBITDA increased 6% improving 19 basis points compared to prior year quarter. Our solid bottom line performance, a minute challenging environment, is attributable to the benefits from our transformational initiative.

Speaker 2: Even in an environment where national brands volumes decline, our own brands portfolio held strong. Our new and refreshed own brands products are helping consumers across all income levels further stretch their dollars.

Even in an environment, where national brands volumes declined our own brands portfolio held strong new and refresh owned brands products are helping consumers across all income levels further stretch their dollars.

Speaker 2: Speaking of solutions to help our customers and retail shoppers, we have made huge strides since launching our merchandising transformation last year. As a food solutions company, we have been relentless on combating food inflation.

Speaking of solutions to help our customers and retail shoppers, we have made huge strides since launching our merchandising transformation last year.

As a food solutions company, we have been relentless on combating food inflation.

Speaker 2: For more than a year, our enhanced category planning has leveraged data from commodity markets and other industrial benchmarks to address rising input costs.

For more than a year, our enhanced category planning has leveraged data from commodity market and other industrial benchmarks to address rising input costs.

Speaker 2: Our methodical cost management has helped us capture share and provide additive value to our wholesale customers and retail shops.

Our methodical cost management has helped us capture share and provided additive value to our wholesale customers and retail shoppers.

Speaker 2: We continue to appreciate and grow with vendors who are collaborating with us to find creative solutions.

We continue to appreciate and grow with vendors, who are collaborating with us to find creative solutions.

Speaker 2: We are now in the process of launching the next phase of our merchandising transformation through our compelling offer. This program is accelerating our customer-led capabilities in the following areas.

We are now in the process of launching the next phase of our merchandising transformation through our compelling offer. This program is accelerating our customer led capabilities in the following areas.

Speaker 2: One, simplifying the assortment using advanced analytics. Two, showcasing the power of our own brand.

One simplifying the assortment using advanced analytics to showcasing the power of our own brands three reducing cost to serve in our warehouses and stores for improving in stocks for shoppers and five creating an easier to navigate planet ground.

Speaker 2: three, reducing costs of serve and our warehouses and stores, four, improving in-stock for shoppers, and five, creating an easier to navigate plan a grant.

Speaker 2: All these actions lead to a better overall shopping experience.

All of these actions lead to a better overall shopping experience.

Speaker 2: There is significant unlocked potential within our retail stores. And based on our learnings, we also plan to scale the program to independent customers to help them drive their business.

There is significant unlock potential within our retail stores and based on our learnings. We also plan to scale the program to independent customers to help them drive their business.

Speaker 2: Turning to our recently remodeled upmarket stores, we are growing at double the rate of the rest of our retail portfolio due to these stores innovative offerings. We continue to reinvest in our stores and are on target to renovate or refresh 25% of the base during the planned period from 2021 to 2025.

Turning to our recently remodeled upmarket stores, we are growing at double the rate of the rest of our retail portfolio due to these stores innovative offerings. We continue to reinvest in our stores and are on target to renovate or refresh 25% of the base. During the planned period from 2021 through 2025.

Speaker 2: Our retail team continues to find solutions. For example, we are currently implementing a cash and deposit automation program. By significantly reducing administrative hours, the program enables our store associates to provide better customer service while optimizing our shopper experience.

Our retail team continues to find solutions. For example, we are currently implementing a cash and deposit automation program by significantly reducing administrative hours. The program enables our store associates to provide better customer service, while optimizing our shopper experience.

Our single strength is to be the most customer focused innovative food solutions company.

Speaker 2: Our signature strength is the most customer focused, innovative food solutions company.

Speaker 2: Now that we are executing on our winning recipe, we are even attracting former customers.

Now that we are executing on our winning recipe, we're even attracting former customers.

Speaker 2: They have seen armamentum and are boomeranging back to Spartan F.

They have seen our momentum and our boomeranging back to spark Nash.

Speaker 2: We're eagerly welcoming them back into our family. They see us as a long-term strategic partner as they focus on their next phase of growth. This is a true testament to the progress we have made over the past three years.

We are eagerly welcoming them back into our family.

See us as a long term strategic partner as they focus on their next phase of growth. This is a true testament to the progress we have made over the past three years.

Speaker 2: We are winning with these customers because of our reliable service made possible through our optimized supply chain network. The benefits are merchandising transformation revised for our wholesale customers and an aligned team of associates who are focused on helping our customers take their grocery business to the next level.

We are winning with these customers because of our reliable service made possible through our optimized supply chain network the benefits our merchandising transformation revised our wholesale customers and an aligned team of associates, who are focused on helping our customers take their grocery business to the next level.

Speaker 2: In addition, we are winning new wholesale customers. This is due to our differentiated services and execution of our winning recipe. We look forward to growing our businesses together.

In addition, we are winning new wholesale customers. This is due to our differentiated services in execution of our winning recipe we look forward to growing our businesses together.

Overall, we are seeing the labor market in Africa and flow stabilized since last November we reduced our turnover rate by nearly 12% with more mature onboarding and training and development investments were focused on hiring the right people training them to do a great job in retaining them for the long term.

Speaker 2: Overall, we are seeing the labor market and applicant flow stabilize. Since last November , we reduced our turnover rate by nearly 12 percent. With more mature on-boarding and training and development investments, we are focused on hiring the right people, training them to do a great job, and retaining them for the long term.

Speaker 2: I love recognizing that social is for their hard work. Our leadership team recently honored our frontline associates throughout our supply chain retail through our Circle of Excellence program.

I love recognizing associates for their hard work our leadership team recently honored our frontline associates throughout our supply chain retail through our circle of excellence program.

Speaker 2: Congrats to all those winners. Thank you for all you do to deliver the ingredients for a better life.

Congrats to all of those winters. Thank you for all you do to deliver the ingredients for a better life.

This past quarter, we hosted our annual leadership summit and.

Speaker 2: This past quarter we hosted our annual leadership summit, and the theme was flying information. I'm already seeing the impact of that inspiring messaging throughout our company. Our team has fully embraced cross-functional work. We are aligned, we are focused, and we are relentless in our pursuit of providing food solutions. Thank you again to our associates who are flying information.

And the theme was flying in formation.

I am already seeing the impact of that inspiring messaging throughout our company. Our team has fully embraced cross functional work. We're aligned we're focused and we're relentless in our pursuit of providing food solutions. Thank you again to our associates, who are flying in formation.

Speaker 2: I'll turn things over to our CFO Jason Monaco to share more details about our finance.

I will now turn things over to our CFO, Jason Monaco to share more details about our financials.

Speaker 3: Thanks, Tony, and welcome to everyone joining us on today's call.

Thanks, Tony and welcome to everyone joining us on today's call.

Speaker 3: I want to highlight some of our key successes from this past quarter before jumping into the detailed result.

I want to highlight some of our key successes from this past quarter before jumping into the detailed results.

Speaker 3: First, our adjusted EVA.Increased more than 6% to $60.9 million from $57.3 million last year.

First our adjusted EBITDA increased more than 6% to $60 9 million from $57 $3 million last year.

Speaker 3: A reported net earnings increased 17.6% to $11.1 million compared to net earnings of $9.5 million in Q3 of last year.

Our reported net earnings increased 17, 6% to $11 1 million.

Compared to net earnings of $9 $5 million in Q3 of last year.

Speaker 3: and our cash flow and liquidity remains strong, giving us flexibility to support our strategic long-term plans, including both organic and inorganic investment.

And our cash flow and liquidity remains strong, giving us flexibility to support our strategic long term plans, including both organic and inorganic investments.

Speaker 3: Here to date, we've generated nearly $96 million of cash from operating activities and returned almost $41 million to shareholders through share repurchases and dividends. Now.

Year to date, we've generated nearly $96 million of cash from operating activities and returned almost $41 million to shareholders through share repurchases and dividends.

Now turning to our quarterly results.

Speaker 3: Net sales for the third quarter decreased $32 million or 1.4% to $2.26 billion compared to 2022's third quarter.

Net sales for the third quarter decreased $32 million or one 4% to $2 $26 billion.

Compared to 2022 third quarter.

Speaker 3: Consistent with industry pressures, both segments were unfavorably impacted by volume headwinds.

Consistent with industry pressures, both segments were unfavorably impacted by volume headwinds.

Speaker 3: Gross profit for the quarter was $348 million compared to $351 million in the prior year's third quarter.

Gross profit for the quarter was $348 million compared.

Compared to $351 million in the prior year's third quarter.

Speaker 3: While the rate was relatively flat, the dollar decline was driven by lower unit volumes in both segments.

While the rate was relatively flat the dollar decline was driven by lower unit volumes in both segments.

Speaker 3: On a sequential basis, the gross profit rate grew 11 basis points to 15.35% of net sales. I'll discuss additional segment of

On a sequential basis. The gross profit rate grew 11 basis points to 15, three 5% of net sales.

I'll discuss additional segment variances momentarily.

Speaker 3: Bifold expense decreased $8 million or 36 basis points compared to the prior year quarter as inflation eased as we've expected.

LIFO expense decreased $8 million or 36 basis points compared to the prior year quarter as inflation eased as we've expected.

Speaker 3: As a percentage of sales, our reported operating expenses improved 12 basis points from the prior year quarter.

As a percentage of sales our reported operating expenses improved 12 basis points from the prior year quarter.

Speaker 3: During the quarter, efficiencies realized from our supply chain transformation helped offset industry wide headwinds.

During the quarter efficiencies realized from our supply chain transformation helped to offset industry wide headwinds the decrease.

Speaker 3: The decrease in expenses was also due to lower incentive compensation compared to the prior year quarter.

And expenses was also due to lower incentive compensation compared to the prior year quarter.

Speaker 3: These expense reductions were partially offset by an increase in acquisition and integration charges and severance costs related to the previously announced organizational realignment.

These expense reductions were partially offset by an increase in acquisition and integration charges and severance costs related to the previously announced organizational realignment.

Speaker 3: Interest expense increased $3.2 million compared to the prior year quarter to $9.3 million due primarily to the higher rate environment.

Interest expense increased $3 2 million compared to the prior year quarter to $9 $3 million due.

Merrily to the higher rate environment.

Speaker 3: Other income for the third quarter included an $800,000 gain related to a previously terminated post retirement plan. Now.

Other income for the third quarter included an $800000 gain related to a previously terminated post retirement plan.

Now turning to our segments.

Speaker 3: Net sales and wholesale decreased $28 million to $1.6 billion, compared to the prior year quarter. The 1.7% decrease was due primarily to demand changes within the Amazon business.

Net sales in wholesale decreased $28 million to $1 6 billion.

Compared to the prior year quarter.

One 7% decrease was due primarily to demand changes within the Amazon business.

Speaker 3: Moving to the bottom line, the wholesale segments quarterly adjusted EVA. was $39 million compared to $38.3 million during the same period last year.

Moving to the bottom line the wholesale segments quarterly adjusted EBITDA was $39 million.

Compared to $38 $3 million during the same period last year despite.

Speaker 3: Despite cycling, inflation-related price gains of over $8 million in the prior year quarter. The segment's bottom line increased due to benefits realized from the merchandising transformation.

Despite cycling inflation related price gains of over $8 million in the prior year quarter. The segment's bottom line increased due to benefits realized from the merchandising transformation.

Speaker 3: better leverage of operating expenses, which include the benefits of our supply chain transformation, and lower and

Better leverage of operating expenses, which include the benefits of our supply chain transformation.

And lower incentive compensation.

Speaker 3: Wholefail reported third quarter operating earnings were $18.2 million compared to $14 million in the prior year period. Now.

Wholesale reported third quarter operating earnings were $18 2 million.

Compared to $14 million in the prior year period.

Now turning to our retail segment.

Speaker 3: Sales came in at $662 million for the quarter compared to $667 million in the third quarter of 2022. Our comparable store sales grew one-

Sales came in at $662 million for the quarter compared to $667 million in the third quarter of 2022.

Our comparable store sales grew one 2%.

Speaker 3: Continued reductions in EBT benefits offered to consumers in our retail geography adversely impacted same store sales by approximately 3% this past quarter. A trend that has accelerated in the last six months.

Continued reductions in EBT benefits offered to consumers in our retail geography adversely impacted same store sales by approximately 3% this past quarter.

A trend that has accelerated in the last six months.

Speaker 3: As Tony mentioned, our new and refreshed own brand's products are helping consumers across all income levels further stretch their dollars.

As Tony mentioned, our new and refreshed owned brands products are helping consumers across all income levels further stretch their dollars.

Speaker 3: Retail Adjusted EBITDA increased $2.9 million to $21.9 million from $19 million in the prior year quarter.

Retail adjusted EBITDA increased $2 9 million to $21 $9 million from $19 million in the prior year quarter.

Speaker 3: This increase was due to the ongoing success of our marketing innovation work, reduced incentive compensation, and a decrease in health benefits expense.

This increase was due to the ongoing success of our marketing innovation work.

Reduced incentive compensation.

And a decrease in health benefits expense.

The increase was partially offset by industry wide volume pressure and lower pharmacy margins.

Speaker 3: The increase was partially offset by industry-wide volume pressure and lower pharmacy margin.

Speaker 3: Retail reported operating earnings were $4.9 million compared to $5.3 million in 2022's third quarter.

Retail reported operating earnings were $4 9 million compared to $5 $3 million in 2022 third quarter.

Moving to our balance sheet, our leverage ratio of net long term debt to adjusted EBITDA improved sequentially by 10 basis points to two one times compared to the second quarter of this year.

Speaker 3: Moving to our balance sheet, our leverage ratio of net long term debt to adjusted eva.improved sequentially by 10 basis points to 2.1 times compared to the second quarter of this year.

Speaker 3: Year to date, cash flow remained strong at nearly $96 million.

Year to date cash flow remained strong at nearly $96 million.

Speaker 3: Over the same period, we have paid more than $22 million in cash dividends, equal to $64.5 per common share. We also bought back $765,000 shares for a total of $18.5 million.

Over the same period, we have paid more than $22 million in cash dividends equal to $64.05 per common share.

We also bought back 765000 shares for a total of $18 $5 million.

Speaker 3: And as of the end of the third quarter, we have approximately $25 million remaining on our share repurchased authorization.

And as of the end of the third quarter, we have approximately $25 million remaining on our share repurchase authorizations.

Speaker 3: In total, the company has returned nearly $41 million to shareholders year to date.

In total the company has returned nearly $41 million to shareholders year to date.

As our earnings release mentioned, we updated our full year guidance based on the current trends and market conditions. We are observing we lowered the top end of our full year net sales guidance to $9 65 to $9 85 billion.

Speaker 3: As our earnings release mentioned, we updated our full year guidance based on the current trends and market conditions we are observing. We lowered the top end of our full year net sales guidance to $9.65 to $9.85 billion.

Speaker 3: We narrowed the range while affirming the same midpoint for our adjusted EBITDA, which we now expect will be between $253 and $258 million.

We narrowed the range, while affirming the same midpoint for our adjusted EBITDA, which we now expect will be between 253 and $258 million.

Speaker 3: And we updated our adjusted EPS to be in the range of $2.20 to $2.28 per share, which reflects the ongoing elevated interest rate environment.

And we updated our adjusted EPS to be in the range of $2 20 to $2 28 per share.

Which reflects the ongoing elevated interest rate environment.

Speaker 3: Since 2021, we have made huge strides on our strategic plan. We have a highly scalable business model with a sustainable trajectory of profitable growth.

Since 2021, we have made huge strides on our strategic plan, we have a highly scalable business model with a sustainable trajectory of profitable growth.

Speaker 3: Our winning recipe and the benefits from our transformational initiatives continue to enhance value for our shareholders. And now I'd like to turn the call.

Our winning recipe and the benefits from our transformational initiatives continue to enhance value for our shareholders.

And now I'd like to turn the call back over to Tony.

Speaker 2: Thank you, Jason. Do I go Jason's last comment? We have made huge progress on our long term plan. Since 2021, we have been building a people first culture, recruiting a talented team of leaders, developing and executing on a long-term strategic plan, and implementing key transformational initiatives.

Thank you Jason.

Metro Jason's last comment we have made huge progress on our long term plan. Since 2021, we have been building a people first culture recruiting a talented team of leaders.

<unk> and executing on our long term strategic plan and implementing key transformational initiatives.

Speaker 2: We continue to be energized about how the plan incorporates long-term value creation through our transformational initiatives and related margin expansion opportunities.

Continue to be energized about how the plan incorporates long term value creation through our transformational initiatives and related margin expansion opportunities.

It's no secret that our industry is facing substantial headwinds.

Speaker 2: It's no secret our industry is facing substantial headwinds. Instead of seeing a mountain decline, we see the ample opportunities this dynamic environment has created.

Instead of seeing a mountain to climb we see the ample opportunities. This dynamic environment has created.

Speaker 2: With a strong foundation from the execution against a long-term strategic plan, we are well positioned to actively pursue opportunities to further grow share, drive improved results, and maximize shareholder value.

With a strong foundation from the execution against our long term strategic plan, we are well positioned to actively pursue opportunities to further grow share drive improved results and maximize shareholder value.

For the holiday season ahead of US I want to express my gratitude to our entire team many of them serving on the front lines, who are helping ensure we are delivering the ingredients for a better life with that I'd like to turn the call back over to the operator to open it up for your questions.

Speaker 2: The holiday season ahead of us, I want to express my gratitude to our entire team, many of them serving in the front lines, but we're helping ensure we are delivering the ingredients for a better life.

Speaker 2: With that, I'd like to turn them back over to the operator to open it up for your question.

Speaker 4: If you would like to ask a question, please press star one on your telephone keypad now. You'll be placed into the

If you would like to ask a question. Please press star one on your telephone keypad now.

You will be placed into the queue in the order received.

Speaker 4: Please be prepared to ask your question when problems.

Please be prepared to ask your question when prompted.

Speaker 4: Once again, if you have a question, please press star one on your phone now.

Once again, if you have a question. Please press star one on your phone now.

Speaker 4: And our first question comes from Andrew Wolfe of CL King.

And our first question comes from Andrew Wolf of C. L. King.

Your line is open.

Speaker 5: Thank you. Good morning. Set a couple questions. First is on market share.

Thank you. Good morning, just had a couple questions first is on market share.

What is your sense.

Okay.

Speaker 5: of your adjusted volume if we take out the Amazon bit.

Of your adjusted volume if you take out the Amazon business.

Speaker 5: How it's trending and how you think you're trending versus

How it is trending and how do you think you are trending versus.

Versus the market.

Hey, Andrew This is Jason good morning, Thanks for the question.

Speaker 3: Hey Andrew, this is Jason Good morning. Thanks for the question. If you strip out the Amazon business, we would have seen net growth and from a market share standpoint, we've seen growth in our retail business and solid growth in wholesale. Overall, the Amazon is the primary driver of the negative revenue profile.

If you strip out the Amazon business, we would've seen net growth and from a market share standpoint, we've seen that we've seen growth in our retail business and solid growth in wholesale.

Overall, the Amazon is the primary driver.

Negative revenue profile for the business.

Okay.

Speaker 5: Kinda related as a follow-up. Is the same store sales.

Kind of related as a follow up is the same store sales.

Speaker 5: Number, you know, that your retail division produces that, similar to what you're seeing from your...

That your retail division produced is that similar to what Youre seeing from your.

Speaker 5: On average, obviously, I'm sure there's a range, but on average, is that similar to what you're seeing from the wholesale cost?

On average obviously ensure there is a range, but on average does that similar to what youre seeing from the wholesale customers.

Yes, yes.

Speaker 3: Yeah, so it's a similar profile, excluding the impact of our pharmacy business, which obviously has different mixed profiles between...

A similar profile, excluding the impact of.

Our pharmacy business, which obviously is different mix profiles between.

Between our independent customers in our own retail stores.

Speaker 5: Okay, got it. And just, if you could just sort of dive into maybe a little more on your outlook.

Okay got it and just if you could just sort of dive into maybe a little more on your outlook.

Speaker 5: not really a guidance question, I don't think as much as something that's topical. Just on inflation and deflation.

Got it.

Really a guidance question I don't think as much as something that's topical just on.

On inflation and deflation.

Speaker 5: and or deflation and you know how you think that could impact you know your two segments as we kind of look out with a longer term.

<unk> deflation and how do you think that could impact your two segments as we kind of look out.

A little longer term.

Speaker 2: Yeah, so this Tony, and so the inflation is coming down as we've all seen, and quickly ensued, it's been kind of each month, it's down a little bit more than it was the previous month. We expect that trend to continue. We're not actually, we're not actually,

Yes. So this is Tony.

Yes.

Inflation is coming down as we've all seen particularly in food is there kind of each month, it's down a little bit more than it was the previous months, we expect that trend to continue we're not we're not we're not actually <unk>.

Speaker 2: uh... breaking out the crystal ball and then we're going to have deflation but we're out but we're going to be seeing pretty steady uh... trend of inflation coming back uh... coming back down to sort of normal levels for the

Breaking out the Crystal ball and say, we're going to have deflation, but we're out but would you. Please stay at a pretty steady trend of inflation coming back.

Coming back down to sort of normal levels for the food right now.

And just a follow up.

Speaker 5: Do you think you've sort of moved beyond the sort of the big swings and holding gains? That impact is quarter, or is it already sort of cycled up?

Okay.

Do you think you've sort of move beyond the sort of the big swings in holding gains that impact this quarter or is it already sort of cycled out.

Yes, Andrew definitely where we're moving past the heaviest part of that.

Speaker 3: Yeah, Andrew, definitely we're moving past the heaviest part of that, that those gains last year versus last year we laughed about $8 million of benefits from last year versus this year. Inflation on the whole in our wholesale segment finished the quarter in the kind of low single digits think about it around 3%. And we're seeing that that benefit fade as we expected.

Those gains last year.

Versus last year, we lapped about $8 million.

Benefits from last year versus this year inflate.

Inflation on the whole in our wholesale segment finished the quarter in the kind of low single digits think about at around 3%.

And we're seeing that that benefit fade as we expected.

Great. Thank you.

Speaker 4: Thank you. Our next question comes from Rob Dickerson from Jeffries. Your line is up.

Thank you.

Our next question comes from Rob Dickerson from Jefferies.

Your line is open.

Speaker 6: Great, thanks so much. I just wanted to...

Great. Thanks, so much.

I just wanted to.

Fast.

Speaker 6: ask kind of about the benders side and knowing historically

The vendor side I know historically.

Speaker 6: You know, you've spoken to potentially seeing some, or the expectation of some increased vendor promotional activity, so I'm just curious kind of how that's.

You've spoken to.

Yes, potentially seeing some or the expectation of.

Some increase vendor promotional activity. So I'm, just curious kind of how that's playing out so far and kind of what the perspective is as we move into 'twenty four and then just secondly.

Speaker 6: playing out so far, kind of what the perspective is is, you know, we move into 24 and then just secondly, I don't, I may have missed it, but I don't think I heard. Kind of how the private label that a part of the business, you know, is trending relative to kind of the overall business. Thanks.

I don't I may have missed it but I don't think I heard.

Kind of how the private label part of the business.

Is trending relative to kind of the overall business. Thanks.

Great Great questions. So first of all our own brands performance has been very strong.

Speaker 2: Great, great questions. So first of all, our own brands performance has been very strong. We've grown both our penetration as well as our overall performance versus national brands. Units are up to Stanford versus the national brands. And I mean, the sales are also up even in light of the fact that we've done some pretty significant discounting to try to bring people in and give them better price points as a lot of our shoppers of course are seeking deals in the broader inflationary times.

Growing both our penetration as well as our overall performance versus national brands units are up substantially versus the national brands and even the sales are also up even in light of the fact that we've done some pretty significant discounting to try to try to bring people in and give them better price points.

A lot of our shoppers of course, we're seeking deals and the broader inflationary times.

Speaker 2: So your first question was

So the near.

Your first your first question was.

Speaker 6: Yeah, it's more around the promotional activity and kind of visibility. Oh, yeah.

Either one real quick.

Yes, it was more around the promotional activity and kind of visibility.

Speaker 2: Perfect. So, yeah, so that's sort of core to the overall ECP and merchandising work that our team has done. So we've had a really, really great run and great participation with our key suppliers. And we've seen a really nice turn around in terms of getting some great price points out there, getting some great promotional deals. We're roughly on track to deliver what we had forecasted earlier in terms of the overall benefit to our shoppers and our customers.

Perfect. So, yes, so thats sort of core to the overall ECP and our merchandising work that our team has done. So we've had a really really great run a great participation with our key suppliers and.

And we've seen a really nice turn.

The turnaround in terms of getting some great price points out there gave us a great promotional deals we're roughly on track to deliver what we had forecasted earlier in the year in terms of the overall benefit to our shoppers and to our customers.

Yes, Rob this is Jason on the merge trends on the <unk> transformation, we committed to 25% to $35 million of benefit annually, we're tracking well to that we're right around $20 million year to date, and we expect to be right in the strike zone of that target by yearend.

Speaker 3: Yeah, Rob is Jason on the Merch transformation. We committed to 25 to 35 million dollars. It benefited annually. We're tracking well with that. We're right around 20 million dollars a year to date and look, expect to be right in the strike zone of that target by your end. All right, super.

Alright, Super and then maybe just quickly.

Speaker 6: on kind of channel dynamics. And we've heard no for no with my questions to be really well documented, you know, shift into, let's say certain kind of more master clubs and dollar.

On channel dynamics.

Heard Nelson number of months there seems to be.

Fairly well documented shift into let's say certain kind of more loss or clubs in the dollar.

Speaker 6: Shoppy occasions. I'm just curious kind of in the regions and

Shopping occasions, I'm, just curious kind of in your region.

Speaker 6: kind of on the whole so part of the business. Have you felt that to a certain extent, or do you feel like maybe so far, you've been a bit more inflated, just maybe given geographic flow to out. Thanks.

On the wholesale part of the business have you.

That to a certain extent or do you feel like maybe so far you've been a bit more in play just maybe given geographic.

Alright, that's all.

Speaker 2: Yeah, we're seeing some of that. It's the numbers in our area don't match perfectly against the national numbers. We're seeing, I can give you an example. So foot traffic overall is down, it's down across the board. Our foot traffic is down to kind of think about, you know, one to one and a half percent overall. And that's roughly half of the foot traffic are seeing most of the competitors at the same time. We are seeing shifts to deep discounters. You've hinted at there. Some of the deep discounters are actually getting both better foot traffic and better sales in our area. And I think that's a best strictly a function of people are settling in now and trying to find the best deals and are set again settling into the place where they can find them. Also, we've mentioned that one element that has colored the overall performance of our business is the pretty dramatic decline in EBT benefits for folks. And EBT was down in the 40th percent range for us in the course. We've been doing this for over since last year.

Yes, we're seeing some of that.

The numbers in our in our area don't quite don't match perfectly against the National numbers, We're seeing I'll give you. An example, so foot traffic overall.

Is down it's down across the board our foot traffic is.

It is down to kind of think about that.

One to one 5% overall and thats roughly half of the foot traffic decline, we're seeing in most of our competitors at the same time, we are seeing shifts to deep discounters, you've hinted out there.

The deep discounters are actually getting both better foot traffic and better sales in our in our area and I think that the best strip.

Strictly a function of people are settling in now and trying to find the best deals and are again in a place where they know they can find them also had mentioned that one element that has colored the overall performance of our businesses the pretty dramatic decline in EBT benefits for folks and.

EBIT was down in the 40 ish percent range for us in the quarter versus last year getting down kind of close to the pre pandemic again for in our mix and that's had a big impact on our overall business.

Speaker 2: Getting down kind of close to the pre pandemic again for for an R mix and that's had a big impact on our overall

Speaker 3: All right, super. Thanks for building on Tony's comments, Rob. I think there's one other thing. One other thing I mentioned that I think is important to know is when you think about foot traffic, taking that foot traffic and transforming it into revenue growth is really important. So I'm gonna give you some color on our retail stores, our retail operations.

Alright Super Thanks, So building on Tony's comments.

Rob I think there is one.

One other thing one other thing I'd mentioned that I think is important to know is when you think about foot traffic.

Taking that foot traffic and transforming it into in our revenue growth is really important.

It gives you some color on our retail stores in our retail operations.

Speaker 3: As we've started to build out and transform our retail execution, some of the things we're seeing are significant improvements in consumers pointing a spark in the ashes is having the best meat, the best produce, the best local offerings.

As we've started it started to build out and transform our retail execution. Some of the things we're seeing our significant improvements in consumers' appointing a spark nash's as having the best meet the best produce the best local offerings. Those are all part of our retail strategy and we're seeing it play out in our results. So despite the challenge some of the challenges with the channel <unk>.

Speaker 3: Those are all part of our retail strategy and we're seeing it play out in our results. So despite some of the challenges with the channel headwinds, our performance in Estonia alluded to is outperforming the market in foot traffic and then the work we're doing in the stores beginning to transform the consumers experience and our profile performance. Bye.

<unk>, our performance and as Tony alluded to is outperforming the market in foot traffic and then the work we're doing in the stores beginning to transform the.

The consumers experience and in our profile performance.

Alright, great. Thank you.

That's right.

Speaker 4: Our next question comes from Kelly Banya from BMO Capital Markets.

Our next question comes from Kelly Bania from BMO capital markets.

Your line is open.

Speaker 7: Hi, good morning guys. This is Ben on for Kelly. Thank you for taking our question.

Hi, good morning, guys.

Ben on for Kelly, Thank you for taking our questions.

Speaker 7: So to start, would you guys provide the inflation at wholesale and retail for the quarter? And then can you provide just any color on the monthly cadence of sales, inflation, volume? Just trying to get a sense of how volume is reacting to lower inflation. And if you guys are seeing any improvements there, either on the retail side or the wholesale side.

So.

Start would you guys provide the inflation at wholesale and retail.

Quarter, and then can you provide just any color on the monthly.

The monthly cadence of sales inflation volume just trying to get a sense of how volume is reacting to lower inflation.

And if you guys are seeing any improvements there either on the retail side of the wholesale side.

Speaker 3: Yeah, hey Ben, this is Jason. The, from a volume standpoint, the pricing and inflation has decelerated, we've seen unit volumes improve or the impact on unit volumes improve. That, from a cadence standpoint, we've seen inflation step downs throughout the quarter and we ended, I think I mentioned earlier, we ended around 3% on the wholesale side for, from an inbound cost standpoint, both to our stores and to our wholesale cut.

Yeah, Hey, Ben this is Jason.

From a volume standpoint.

Pricing and inflation has decelerated, we've seen unit volumes improve or the impact on unit volumes improve.

From a cadence standpoint, we've seen inflation step downs throughout the quarter.

We ended I think I mentioned earlier, we ended around 3% on the wholesale side for from an inbound cost standpoint, both to our stores into our our wholesale customers.

Great. Thank you and then just kind of following up on the EBT conversation I think you said it accelerated the headwind accelerated in the last six months.

Speaker 7: Great. And then just kind of following up on the EBT conversation, I think you said it accelerated the headwind accelerated in the last six months. You know, wondering why you guys think that is and how should we think about that going forward. And then just somewhat related. You also mentioned ex-farmacy. You're seeing consistent trends between wholesale and retail comps. Just wondering what your estimated pharmacy impact was.

Wondering why you guys can cut it and how should we think about that going forward.

And then just somewhat related you also mentioned ex pharmacy.

Seeing consistent trends between wholesale and retail comps.

Just wondering what your estimated pharmacy impact was.

Speaker 3: Yeah, great question Ben. So probably the benefits from pharmacy, particularly GLP ones, are offsetting or close to offsetting the headwinds from EVT. It's actually a net, flight net negative carry right now. Our core comp in the high single, high ones is a pretty clean number when you strip out EVT and pharmacy between the two of them. right.

Yes, great question, Ben So broadly the benefits from pharmacy, particularly G. L. P ones are are offsetting or close to offsetting the headwinds from EBT.

Actually a net slight net negative carry right now.

Our core.

Our core comp in the high single high ones is.

Is it a pretty clean number when you strip out EBT and our and pharmacy between the two of them.

So overall.

Solid results.

Speaker 3: from an EBT stasings standpoint. I think you asked about the timing. You know, some of it is the jurisdictions we operate in, in Michigan in particular, there was a decline in EBT funding that started about six months ago. And we're seeing that in the portion of our business that operates in Michigan, there's less of an impact outside of that yard.

From an EBT phasing standpoint, I think you'd asked about the timing.

Some of it is is the jurisdictions we operate in in Michigan. In particular, there was a decline in EBT funding that started about six months ago, and we're seeing that in the portion of our business that operates in Michigan. There is less of an impact outside of that geography.

Speaker 7: Great, thank you. And then just one more, if I may, on kind of the operating expenses. Just wondering how three-q operating expenses tracked your internal plan, how it labor rates and hours looking, especially kind of poster your realignment.

Great. Thank you and then just one more if I may on <unk>.

The operating expenses just wondering how.

<unk> operating expenses tracked.

Yeah.

To your internal plan.

Labor rates in hours.

Looking especially kind of poster realignment.

Speaker 3: Yeah, so maybe I'll start with the labor and hours and kind of before we get into the realignment. So the labor and hours, we saw 4% improvement or drove a 4% improvement in throughput on our supply chain. That's a great result, especially in the context or the backdrop of some of the volume declines we mentioned earlier in our national accounts business.

Yes so.

Maybe I'll start with the labor hours.

Before we get into the realignment so the labor hours, we saw a 4% improvement or drove a 4% improvement in throughput on our supply chain.

That's a great result, especially in the context of the backdrop of some of the volume declines we mentioned earlier, our national accounts business.

Speaker 3: As far as the go-to-market changes, we've deployed those changes here in the third quarter and we're often running and Our expense load is consistent with what we expected

As far as the go to market changes we've deployed those changes here in the third quarter, and we're often running and our.

Our expense load is consistent with what we expected.

Okay. Thank you guys.

Speaker 4: As a reminder, if you do have a question, please press star one on your touchstone key.

As a reminder, if you do have a question. Please press star one on your Touchtone keypad now.

Speaker 4: And our next question comes from Scott Muschkin from our five capital. Your line is up.

And our next question comes from Scott, Michigan from our five capital.

Your line is open.

Speaker 2: Hey guys, sorry about the voice. I'm all horse right now.

Thanks, Hey, guys, sorry about the voice them all horse right now.

Hey increases next year I know you said labor is a little bit easier to get our stabilized at least.

Speaker 8: Hey, increases next year. I know you said labor's a little bit easier to get or stabilize it.

Speaker 8: How should we look at labor rates as we move into 24?

How should we look at labor rates as we move into 'twenty four.

Speaker 2: Yeah, great question. Scott, as we mentioned on the opening here that we've seen a good stabilization overall on the flow of applicants on turnover, which has been improved for us as well. And so I think some of the course, the larger course.

Yes, great question Scott.

As we mentioned on our call on the opening here that we've seen good stabilization overall on the on the flow of applicants on turnover, which has been improved for us as well and so I think some of the course, the larger course corrections that we had to make in terms of compensation are behind us, but we are in a.

Speaker 2: corrections that we had to make in terms of compensation or behind us. But we are in a normal phase right now. We're looking at data for the this year kind of in the back half of this year. It says that in our competitive set, you know, pay increases are still kind of wrong for a little bit north of 4%. So that would be a wee bit higher than would have been the sort of pre-pandemic. So we're seeing something between kind of a normal range of pay. And maybe even slightly elevated pay, pay increases as we move forward from this year in the 20th.

Normal phase right now we're looking at data for the this year kind of in the back half of this year. It says in our competitive set pay increase theres still kind of around for a little bit north of 4%. So.

So that'll be a wee bit higher than would have been sort of pre pandemic. So we're seeing something between kind of a normal range of pay or maybe slightly elevated pay paying.

Pay increases as we move forward from there from from this year into 'twenty four.

Speaker 8: Perfecting. And as we think about 24, obviously inflation continues to step down, promotional activity continues to step up. Some of it, CPG sponsored, but not all of it. So as we frame this into 24, there has been talk of flat inflation and maybe outright deflation. How should we think about your guys' business as we potentially move into that environment? And is that something you guys are talking about?

Perfect and then.

Thinking about 'twenty, four obviously inflation continues to step down.

Promotional activity continues to step up.

Some of it CPG sponsor, but not all of it so as we frame this into 'twenty four.

Has been talk of flat inflation, maybe outright deflation how.

How should we think about your guys business as we potentially move into that environment and is that something you guys are contemplating.

Hey, Scott this is Jason.

Speaker 3: Peace, God, this is Jason. We'll give guidance on 24 next quarter, broadly on the promotional environment. We have seen an uptick in promotions. And as you said, it's been largely funded by the vendor community. So as... We'll give guidance on 24 next quarter, broadly on the promotional environment.

Give guidance on 'twenty four next next quarter.

Broadly in the on the promotional environment, we have seen an uptick in promotions and as you said, it's been largely funded by the by the vendor community.

As.

Speaker 3: Inflation has eased or disinflation has occurred. What we've seen is an easing of the impact on unit volumes. We'll continue to evaluate that and optimize our business going forward. We'll share more about what we think 24 looks like next.

Inflation has eased or disinflation has occurred what.

What we've seen is a an easing of the of the impact on unit volumes and.

And we will continue to evaluate that and optimize our business going forward will share more about what we think 'twenty four it looks like next time around.

Speaker 8: All right, and that's actually a good segue into my last question. You guys have talked about volume getting a little bit better. Our data is not necessarily hugely supportive of that. Do you think you're tracking a little bit different than the industry? Or are we talking volume is getting a little bit better on the margins, but really isn't the artisties aren't really reacting as much as maybe you would think at this juncture.

Alright, and Thats actually a good segue into my last question.

You guys have talked about volume getting a little bit better.

Our data is not necessarily hugely supportive of that do you think you're tracking a little bit different in the industry or are we talking volume is getting a little bit better on the margins, but really isn't.

Is it the elasticities aren't really reacting as much as maybe you would think.

At this juncture.

Speaker 3: Yeah, our revenue growth would have been 1.6% X Amazon. We feel like we're in a solid spot from a revenue growth standpoint. And obviously it's a dynamic environment out there with inflation. We saw 40-year high inflation. We saw it for 18 to 24 months. And now that's winding back. But the consumer is still paying for two years of double-digit inflation back-to-back.

Yeah, our revenue growth would have been one 6% ex Amazon. So we feel like we're in a solid spot from a revenue growth standpoint and.

Obviously, it's a dynamic environment out there.

With inflation.

We saw 40 year high inflation.

Thought for 18 to 24 months and now Thats, that's winding back but the consumer is still paying for two years of double digit inflation back to back and.

Speaker 9: And so what we're doing is leveraging the insights that we bring to bear and bring to the market both in our retail and our wholesale businesses so that we can ensure that we've got the right solution for our consumers and our customers along the way. And as we've said before, a bit of a test and learn organization, we're gonna try this out, test it, see what works, and make sure we've got winning propositions for consumers, and so that we can meet them where they are with their budget.

And so what we're doing is leveraging the insights that we bring to bear and bring to the market both in our retail and our wholesale businesses. So that we can we can ensure that we've got the right solution for our consumers and our customers along the way and we are as we've said before a bit of a test and learn organization, we're going to try this out and test it and see what works and make sure we've got winning propositions for consumers.

And so that we can meet them, where they are with their budget.

And any thoughts on the volume volumes.

And the elasticity on.

Yes, we're I think it's probably too early to call. The specific use disease, but were seeing as as inflation is declining or disinflate ing we're seeing.

Speaker 3: Yeah, I think it's probably too early to call the specific U.S. disease, but we're seeing as inflation is declining or disinflating, we're seeing units respond.

Units respond.

Speaker 3: I think the most one of the most important things to highlight is our own brands performance. We've invested in known brands and began that investment journey a couple of years ago. We talked about the work that we were putting in and that we were building a portfolio of products that were going to win. Now, we didn't necessarily expect to have two years of double-digit inflation, but consumers are responding very favorably to our own brand's portfolio and it's helping the drive unit volume performance in our business and with our customers.

I think the most one of the most important things to highlight is our own brands performance and we've invested known brands and began that investment journey. A couple of years ago, We talked about the work that we were putting in and that we were building a portfolio of products that was that we're going to win now we didn't necessarily expect to have two years of double digit inflation.

Consumers are responding very favorably to our own brands portfolio, and it's helping to drive unit volume performance in our business and with our customers or our family of brands are performing well and consistently outperforming the national brands.

Speaker 9: our family brands are performing well and consistently are performing the national brands. All right.

Alright, perfect. Thanks, guys.

Okay.

Our next question comes from Kristine <unk> from Deutsche Bank.

Speaker 4: Our next question comes from Christine Katai from Doisbank.

Speaker 10: Good morning, Mrs. Jessica Taylor on for Christina. Thanks for taking our question. I just wanted to go back to the reductions with the Amazon account and just get your thoughts on how you're planning for that. Go forward. Do you think that that business is gone for good and or and are you looking to drive other accounts in order to replace that volume or is that something that you see coming back in 2024. Thank you.

Good morning remarks. Please go ahead.

Good morning. This is Jessica Taylor on for Christina Thanks for taking a question.

I just wanted to go back to the reductions with the Amazon account and just get your thoughts like how.

Are you planning for that and go forward do you think that that business has gone for good.

And are you looking to drive other accounts in order to replace that volume or is that something that you see coming back in 2024. Thank you.

Speaker 2: These Jessica so a couple of things think about one I guess this is probably not a lot

Great.

Thanks, Jessica So a couple a couple of things to think about one I guess, there's probably not a lot.

Speaker 2: additional information out there other than what Amazon has shared directly. Amazon is very committed to this business. They're committed to food. They're committed to their grocery business and their fresh business and they're working through some changes right now and those those changes have manifested in our our volume being down. But we think they're they've got it. They've got a plan that they're putting together to give on track and get that business growing again. We've met with them a handful of times recently to kind of work through our strategy with them. We have a lot of confidence in the Amazon team and that they'll get this business in the right place and we're going to be there partnering with them all the way.

Additional information out there other than what the Amazon share directly Amazon is very committed to this business, they're committed to food, they're committed to their grocery business and their fresh business and then working through some changes right now and those those changes are manifested in our our volume being down.

But we think there is got it they've got a plan that they are putting together two on track and get that business growing again, we have met with them a handful of times in a recently to kind of a guy was encountered.

Worked through our strategy with them and we have a lot of confidence in the Amazon team and they'll give us this business in the right place and we're going to be there partnering with them all the way.

Speaker 2: So in terms of your question about are we looking for other businesses? We're always looking for others.

So in terms of your question of are we looking for other business, we're always looking for other business.

Speaker 2: where we have a much of a growth of mentality here, both in our retail stores as well as wholesale. And we think we have a lot to offer. So we have a lot of great irons in the fire in terms of the types of businesses that we can bring back in. I mentioned by opening comments, we've had a number of customers who may have left us quite some time ago who are now coming back and taking advantage of the great service that we can provide. So we were very optimistic about growth in the future, both for Amazon as well as for our broader business.

Where we have.

So much of a growth of a mentality here both in our retail stores as well as wholesale and we think we have a lot to offer. So we have we have a lot of great irons in the fire in terms of the types of.

Business that we can be back in I mentioned in my opening comments, we've had a number of customers who may have left since quite some time ago are now coming back in and taking advantage of the great service that we can provide so we were very optimistic about growth in the future both for Amazon as well as for our broader business.

Speaker 10: Great, thank you for that. And just as a follow up, can you talk a little bit about the drivers for your operating margin on the retail side and how we should think about the puts and takes of that into the fourth quarter?

Great. Thank you for that and just as a follow up.

Can you talk a little bit about the drivers for on your operating margin on the retail side and how we should think about the puts and takes of that into the fourth quarter.

Speaker 9: Hey Jessica, this is Jason. Yeah, we've seen solid performance. And I mentioned before the, the

Hey, Jessica this is Jason yes, we've seen.

Solid performance and I mentioned before the.

Speaker 3: The mix between pricing or disinflation and unit volume.

The mix between pricing or disinflation and in unit volume.

Speaker 9: So as we built our retail business operating plan, we've been focusing on not just the near term of securing that the volume's coming out of that pricey last 50 of disinflation.

As we built our retail business operating plan, we've been focusing on not just the near term.

Securing that the volumes coming out of that price elasticity of disinflation, but also really focusing on the long term value, creating opportunities that we have in retail and I mentioned before that consumers are voting with their feet Tony talked about the <unk>.

Speaker 3: but also really focusing on the long-term value creating opportunities that we have in retail. And I mentioned before that consumers are voting with their feet.

Speaker 3: Tony talked about the the foot traffic outperforming the market significantly outperforming the market and outperforming you know significant major mass market players in our marketplace

Foot traffic outperforming the market significantly outperforming the market and outperforming.

Significant major mass market players in our marketplaces, and so we're getting shoppers in our store and not only are we putting shop, giving shoppers in our store, but we're outperforming in it really key areas, where we focused our strategic efforts around execution, whether it's meat produce local bakeries and service in the stores.

Speaker 9: And so we're getting shoppers in our store. And not only are we getting shoppers in our store, but we're outperforming in really cute areas where we focused our strategic efforts around execution, whether it's meat, produce, local, bakeries, and service in the stores with high service, helpful employees. So we're winning in those spaces and we're proud of that. And that's helped drive both mixed.

With the high service helpful employees.

So we've we're winning in those spaces and we're proud of that and that's that's helped drive both mix.

Speaker 3: paired together with our own brand offerings and service to deliver a really nice package of performance where we're at or above the market norm from a comp standpoint.

Paired together with our own brand offerings and service to deliver a really nice package of performance, where we're at or above the kind of the market norm from a comp standpoint.

Great. Thanks for that best of luck.

And our next question is from Peter <unk> from BTG.

Speaker 4: And our next question is from Peter Silla from BTIG. Your line is open.

Your line is open.

Great. Thanks.

Speaker 11: Jason, you mentioned the GLP1 and the benefit there. Can you quantify how big that benefit was on the pharmacy and then are you also, I'm assuming you're seeing some correlation between folks that are buying these GLP1s and lower calorie consumption, just any color around that would be helpful. Thank you.

Jason You mentioned the G L P one and the benefit there.

Can you quantify how big that benefit was on the pharmacy and then.

Are you also I'm, assuming you're seeing some correlation between.

Folks that are buying these <unk> and lower calorie consumption just any color on that would be helpful. Thank you.

Speaker 2: Yeah, the GLP one was the majority of growth in our pharmacies overall. Pharmacies were net overall up about 20, I think about 27, 25 to 27 percent. And the majority of that growth came from GLP one.

Yes <unk>.

One was the majority of growth in our in our pharmacies overall pharmacies, where.

Net overall up about 20% I think about $27, 25% to 27% in the majority of that growth came from <unk>.

Speaker 9: We haven't seen a step down and consumption as a result of that. I know there have been some other players who have mentioned that we haven't seen it explicitly in our stores. So yeah, something we're monitoring, of course, but I wouldn't call it out as a driver.

We haven't seen a step down in and consumption as a result of that I know there had been some some other players who mentioned that we haven't seen it explicitly in our in our stores. So it's something we're monitoring of course, but I wouldn't call it out as a driver.

Great. Thank you very much.

Speaker 4: And seeing no further questions, I'll turn the call back over to our

And seeing no further questions I'll turn the call back over to our host.

Speaker 2: All right. Well, thank you all for your participation on today's call. We certainly appreciate your interest in Spartan Nash and from our family to yours. We'd like to wish you all a very pleasant Thanksgiving holiday season.

Alright, well. Thank you all for your participation on today's call. We certainly appreciate your interest in Spartan Nash and from our family of yours, we'd like to wish you all a very pleasant Thanksgiving holiday season.

Speaker 4: The meeting has now concluded. Thank you for joining and have a pleasure.

The meeting has now concluded thank you for joining and have a pleasant day.

Speaker 12: The host has ended this call. Goodbye.

The host has ended this call goodbye.