Question-and-Answer Session
Operator
(Operator Instructions) The first question we have comes from Jerry Faulkner with RJ Faulkner and Company.
Jerry Faulkner - RJ Faulkner and Company
A question for you as far as, you know, obviously your earnings were down slightly but compared with what’s going on with most retailers, it looks pretty darn impressive to me. How has the impact of the slowing economy and all the various things we read about every day, how has that impacted your demand for franchisees or franchise units from either new or existing franchisees?
Franklin E. Crail
Jerry, I think the demand we are seeing at this point in time is pretty similar to the last couple of years. The area that we’ve been affected most by what’s going on in the economy is our traffic counts are down in virtually all of our retail environments, and so -- I mean, that obviously is putting a lot of pressure on gross sales and we are having to try to make it up through increasing average transaction. But from the standpoint of new franchisees or new franchises sold to existing franchisees, I would say that has probably slowed somewhat, as there’s more financial pressure on the current franchise system.
Jerry Faulkner - RJ Faulkner and Company
Okay, okay. And then the second question would be as far as the same-store pounds purchased, this figure has really been under pressure for quite some time and I think you’ve kind of described it as a lot of the franchisee store operators switching to the store made product because in their own mind, they feel like it’s less expensive for them to make that product than to buy a product from your stores, even though I guess if they add all their labor costs in there, that may or may not be the case. But it would seem like at some point that the product that they buy from the stores, the inventories that they have within the stores are going to have to get down to a point where they almost have to start reordering at a greater rate. Are you seeing any improvement in those trends in the last couple of months or so?
Bryan J. Merryman
Well, Jerry, we’ve started to see an improvement at the beginning of June and really thought that we would have a good month in June in terms of system purchases. However, that really didn’t materialize. At the end of June, sales fell off and so did same-store pounds purchase. Same-store sales in June were off 5%. In May, they were up 1%, and so May was the first positive month we’ve had in a while and June started out pretty well and then didn’t finish very well.
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