Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Blakely [ph] Smith of Jefferies & Co.
Blakely [ph] Smith of Jefferies & Co
I was interested in what you said about the [inaudible] why do you think the contracts [oh] had improved in the second quarter. I mean is it merchandising, is it simply inflation, what are you saying? Your tone sounded pretty positive about 2Q.
Craig Sturken
There are really two elements. First of all in the spring we had poor weather up north and the Glen’s Markets banner really was affected by sort of a lack of traffic in the Lakes regions. So that really affected us primarily in the month of June.
Also, the Felpausch stores could not be included as part of our comp sales because they had not completed the first annualization. Remember while we put capital money into the Felpausch stores so we are enjoying the great comps in those stores in which we’ve made the investment, but we have not been able to include them as part of our comps analysis.
Blakely [ph] Smith of Jefferies & Co
It sounds like you guys continue to do positive on fuel, what we’ve noticed is it’s been a driver for the industry, yet at the same time we’re seeing independent fuel operators under a lot of stress with higher prices and credit cards going higher.
How are you making fuel work for you and do you remain committed to it as you go through your capital plan?
Craig Sturken
First of all, yes we are committed to it and the magic of fuel for our partner stores really is the relationship of our fuel centers with our supermarkets. As a matter of fact, over 30% of the fuel transaction includes some kind of discount that is generated through a purchase in our supermarket. So, we have a very synergistic relationship that means more to us than, say, a convenience store.
Blakely [ph] Smith of Jefferies & Co
Then you said, as you look out at your remodels that you still plan to expand the number of fuel centers, just generally speaking.
Craig Sturken
Absolutely.
Blakely [ph] Smith of Jefferies & Co
One last question on the M&A front just from a distribution or a retail side. Clearly markets are in turmoil to a certain degree, but do you see any opportunities over the next 12 months?
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