John Ivankoe: And obviously, introducing steak, I mean, does that mean one protein necessarily has to come off as part of the stage gate process? I mean it’s always an interesting idea of introducing new products that provide more variety and more use occasions to the customer. But just talk about how you balance the ability of maintaining that consistent execution as you do add additional SKUs and perhaps complexity to the system.
Brett Schulman: Yes. Great question, John. And I talk about our 38 ingredients with over 17 billion combinations, and we’re trying to be really disciplined about not introducing too much menu creep and complexity into the system. So back almost a year ago, we removed beef meatballs from the menu. That opened up a new slot within our mains category. So steak would actually be taking a spot that used to exist right now. We also have that rotational slot where spicy falafel currently exists, and we’ll be bringing back our white sweet potato over the winter, which was a fan favorite that we’re going to rotate back through. But steak would actually be filling that former beef meatball slot, reintroducing a beef item that’s been highly requested on our menu.
John Ivankoe: Perfect. Thank you.
Operator: Thank you. The next question comes from David Tarantino from Baird. Please go ahead.
David Tarantino: Hi, good afternoon and congrats on great results here. So I had a question, you mentioned a couple of times that you wouldn’t expect the restaurant margin performance you’ve been delivering recently to be the new baseline. I was just wondering if you could maybe elaborate on what you think the right underlying baseline should be as we think about 2024 as a starting point, just to make sure we’re on the same page.
Tricia Tolivar: Yes. Thanks, David. So we mentioned the investments that we’re making in wages of about 100 to 120 basis points. And that certainly should be something that’s reflective of continued reinvestment in the business to make sure that we’re well positioned for our continued growth over the long term. So it’s something that we’ve been very focused on historically, always firmly focused on our employees and how important they are to us. We view them as assets, not as expenses, and we want to make sure that we’re always investing in them. Remember, back in 2016, we went to a $13 starting wage, and certainly, our commitment to our employees will continue. But as you think about our restaurant-level margins, what Q2 and Q3 demonstrate is the power of the model and what CAVA can deliver over the long term, but we’ll make those investments we’ve already done and continue to evaluate the opportunity for additional investments in the near term so that we ensure that we’re well positioned for what we can deliver over the long term.
So overall, there’s at least 100 to 120 basis points that we’ll invest in, and we have plans to continue to invest in ‘24 as well that will bring restaurant-level margins a bit down a bit more. One other thing, David, that I will add to is in 2023, there was a lot of value and benefit in very high same-restaurant sales as well as a strong PPA. And that strong PPA was the result of premium attachments and attachments in general, things like our pita chips that are increasingly more popular or our honey harissa chicken. And all of that drives leverage throughout the P&L. And given the uncertain environment that we’re in, we’re not sure if that will continue into 2024, but we’ll certainly be ready if it does.
David Tarantino: Makes sense. Thank you.
Operator: Thank you. The next question comes from Brian Harbour from Morgan Stanley. Please go ahead.
Brian Harbour: Yes, thanks. Good evening, guys. Tricia, I had a question, too, just kind of about that labor line. So is that the net impact that you’d expect, i.e., you think labor costs as a percent of sales will be up 100 to 120? And I think also just broadly, is there a little bit of catch-up being played here? I know that, that’s, I think, more of an increase than some of your peers are seeing. And also, does that account for maybe taking wages up in California next year at this point?
