Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Karen Short - Friedman, Billings, Ramsey & Co.
Karen Short - Friedman, Billings, Ramsey & Co.
Just a couple questions on expense control opportunities. I know you talked about that a bit on your last call and you had some time to kind of put some more thought to it so I’m wondering if you could give a little more color on what you think the opportunity is from you know a dollar perspective and when you think we could expect to see some progress.
David B. Dillon
I’ll be happy to. I won’t give you a specific dollar amount as a target but I will tell you that in the fourth quarter we saw clear improvement and I’m feeling much better about where we are on our expense control. And it may not on the numbers that we’ve given you it may not at first appear that way. If you look at our OG&A for the quarter we declined 3 basis points I believe and if you adjusted that for Visa-MasterCard it would have been flipped the other direction. We recognize that you have to think of it that way but what’s not included in OG&A and it’s the hazard of the way in which accounting records are kept, we tend to look at total costs as total costs. And so we look at shrink and warehousing and advertising and transportation and all of those, too.
And we did indicate and you can see the difference between our selling gross and our FIFO gross. That essentially represents – not entirely I suppose but it’s essentially the improvement we made in warehousing, transportation and shrink. Those numbers combined with what we did in OG&A is meaningful progress from the third quarter. So that’s the basis of my optimism. Now as we look forward, though, we have worked on and did see in the quarter and expect to see this year better control of expenses.
We do expect to have healthcare issues that are problematic. What’s driving the healthcare by the way is we have more people on our plan. We’ve mentioned that we’ve added employees. We’re growing our business. We have more people, more lives covered. Turnover is a little less and with lower turnover you have more people eligible for the healthcare that we offer. That gives you more people with lives covered. The utilization of healthcare is up a bit and we’ve had some unfortunate catastrophic events, both in the third and fourth quarters. So the healthcare numbers are as I said problematic.
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