Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from John Heinbockel - Goldman Sachs.
John Heinbockel - Goldman Sachs
With respect to the sales environment, your sales revenues is certainly not as robust as others, but it’s certainly not terrible. What type of sales performance begins to get you concerned about share loss, where you have to respond? If we muddle around where we are today, that would seem conducive to seeing continued margin improvement.
As a follow on to that, is the consumer such today that spending a lot of money promotionally, would that elicit a response or is that just a waste of capital?
Jeff Noddle
Thanks, John, as always there’s a lot to your question. In terms of sales, obviously if you go negative comps I think that would bea much higher level of concern. Although we had hoped and planned and thought we’d doa little better inthe quarter, we still did the same inthe third quarter as we did in the second.
But I do think, John , it’s worth mentioning that I think people quickly forget when I read – we followed and tracked and read all of what was said about the Albertson’s properties prior to the acquisition about the condition of the stores, about the condition of certain markets and the kind of remodel activity that would need to be done, in fact those properties were running negative comps when we acquired them. We’re still only a year-and-a-half into this and I think the expectation of what is accomplished over that period of time certainly some times gets ahead of itself.
We’re keeping in sight very clearly what we set out to do when we laid out this plan in January of 2006; we have got to remodel these stores. We had some early better sales results than we anticipated. I think we got as high as 1.7 one quarter inthe first year and that was very pleasant to see because I think people felt better about their future. I think that played through.
Now the consumer environment is tougher, the competitive environment is tougher because the consumer environment is tougher, but I think we’re still pretty much on plan and on track.
To answer your question, if we went negative comps with the inflation running where it is, obviously that would bea concern to me. But you also have to factor that we have a lot of stores that we’re closing, Pam mentioned 50 stores. When we look at market share we take a lot of things into consideration.
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