Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from the line of John Glass with Morgan Stanley.
John Glass – Morgan Stanley
Doug, could you please repeat what you said about the pressure in the labor line this quarter relating to that one-time health benefit adjustment, and is that a one-time this quarter or does that persist, and can you talk about where you think specifically labor goes this year? I think you said 75 basis points decline year over year. Is that something that’s sustainable at the current levels? Could that accelerate through the year as you implement more cost savings?
Douglas Benn
Let’s talk first about the quarter. The quarter labor is up overall by 20 basis points, but last year we implemented a new health insurance carrier, and anytime a new carrier is put in place, there is a lag effect on the claims coming in, and so that claims early on last year that came in and were booked into our expense were lower, and this year, we’re seeing a more normalized claims level. The comparison is negative here in the first part of the year, but we would expect that near the end of the year, possibly by the fourth quarter that maybe we’ll see some positive comparisons because our health insurance expense for the year last year was not unreasonably low. It was just low earlier in the year, and with respect to the labor line, we announced at the start of the year at our last conference call that we had about $5.5 million worth of labor related initiatives that had to do with the kitchen management system, manager staffing, etc., were well on our way. We claimed about $1.5 million worth of those this quarter, and we would expect to continue to claim some labor benefits throughout the rest of the year, and I would expect that labor for the year ends the year relatively flat, perhaps a slight improvement over the previous year.
Operator
Your next question comes from the line of Joe Buckley from Bank of America-Merrill Lynch.
Joe Buckley – Bank of America-Merrill Lynch
Just to follow up on that question, I think David mentioned $4 million of cost savings in the first quarter. It sounds like $1.5. It might have been on the labor line. Could you run through some of the other costs programs, and then maybe also I think you indicated food costs will be down, labor flat to maybe down, but operating margins still under pressure, so maybe talk about that other operating expense category and what pressures you’re seeing within that category of costs.
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