Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from John Heinbockel with Goldman Sachs.
John Heinbockel – Goldman Sachs
If you guys can talk to within the comp number, maybe with both A&P and Pathmark, what are you seeing with regard to traffic and ticket, item per basket. It doesn’t look like there’s whole lot of trading down that you’re seeing, but can you dissect that a little bit?
Eric Claus
We don’t see very much change in our Fresh, or in our Food Emporium even, but we do see more it the Pathmark. And I think that the mid-to-lower income consumer is buying less, so there is some inflationary pressure in those stores, also.
But we’ve seen, you know, what’s important is you can’t just look at inflation, you got to look at all the different factors that go around it. With that we’re getting more customers, the market share of Pathmark is up, but the customers are buying a little less. So we’re still maintaining our momentum through the additional customers coming in the door. But the definitely are buying less items.
John Heinbockel – Goldman Sachs
You measure inflation but you are taking pricing down, so as you measure it on the retail side, inflation is much lower than what some other people are seeing, is that fair?
Eric Claus
Yes. Because I think you see a lot of people that quote the cost inflation, so they look at all the items and they take the cost across the board for what was sold. The real measure of inflation at retail is to take the item and the velocity for what you sold versus what you would have sold last year. So what we’re seeing is, when you see people buying more on promotion or buying more private label, etc., etc., they can bring their basket dollars down and they can realize less inflation than what our cost inflation input is.
John Heinbockel – Goldman Sachs
So your transaction count, the number of transactions, would be up half of your comp, maybe 1.5%, or not that much?
Brenda M. Galgano
It’s more than that but there’s also in each transaction the number of units that are being sold. That’s down for Pathmark.
John Heinbockel – Goldman Sachs
Things have been good the last five weeks, but things are moving pretty fast here. Do you think there’s going to be more pressure from a consumer looking to trade down? How are you staying on top of that that the market doesn’t move around here on you?
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