Question-and-Answer Session
Operator
(Operator Instructions) Our first question comes from John Heinbockel of Goldman Sachs.
John Heinbockel - Goldman Sachs
A couple of things. When you look at the comp, is that being driven more by ticket or traffic at this point?
Christian W.E. Haub
John, we’ve done so much study on all this because of the combination of a lot of factors, a lot of talk about inflation inthe economy. In our case, our customer count is up as well as our basket size is up and inflation does play a part of it also, but we would estimate that to be less than half of our [inaudible] sales. Most of it’s coming from real growth from the business that we’re driving. Obviously our promotionals, our mix has shifted also more to promotional as opposed to regular sales in sort of the aggressive market that we’re operating in.
John Heinbockel - Goldman Sachs
From what you’ve seen so far at Pathmark, and I know it’s early, but would that be driven more by ticket than traffic at this point? Their comp?
Christian W.E. Haub
In Pathmark, yes.
John Heinbockel - Goldman Sachs
You talked about sort of fourth quarter here positive sales trending positively. You didn’t make reference to how that compared to the third quarter. I assume you have not seen much of a drop off from the third quarter given the macro?
Brenda Galgano
That’s correct. In fact, it’s actually a bit stronger than what we saw in the third quarter.
Eric Claus
And we’ve brought the Pathmark team and the merchandising team, they’re working closely with our team, it’s a combined team now, to really draw the promotional part in a more aggressive way than they had been over the last year.
John Heinbockel - Goldman Sachs
How many Pathmark stores do you think will be remodeled inthe next year, the next two years? How many need to be remodeled?
Christian W.E. Haub
John, the overall state of affairs in those stores was not as bad as the A&P Portfolio stores a couple of years ago. They area little plain Jane and they require some facelifting, some paint, some change, and we’re just in the process of evaluating all of that and by the next quarter I think we’ll be able to roll out what our capital plan will be for 2008. What we’re trying to do, and I alluded to it briefly in my comments, is to do something where we can affect a large number of stores by giving ita refresh, a relook, and enhancing in particular a couple of departments like produce and bakery, getting much stronger on the signing, and making ita much more price impact sort of venue when you walk into those locations. Sothe exact number, I think we’ll be able to tell you by our next quarter call, but is definitely a remake program that we want to do that’s inexpensive per store and can hit a lot of stores that our objective would be that probably over a three year period we could doall of them.
- To read the full transcript on Seeking Alpha, click here »
