Matthew Fassler – Goldman Sachs & Co

Thanks for that and good afternoon everyone. I want to focus if we could first of all on the expense line; you had very impressive cost control including relative to the first half of the year. If you could talk about precisely where you were able to cut and also whether that was essentially a moving target through the quarter as you saw sales growth begin to moderate.

Lawrence P. Molloy

Matt this is Chip. That was really a function of things that we started at the beginning of the year and they''re starting to materialize so things like headcount management, things like trimming professional fees, our insurance costs are coming down. We renegotiated all of our contracts, our store maintenance contracts. We continue to trim on expenses on supplies. So it''s been an ongoing effort for probably the last nine months. Fortunately for us we continue to push those along and they''re starting to materialize and something that we''ve been expecting for, ever since probably the beginning of the year.

Matthew Fassler – Goldman Sachs & Co

Got you and I guess secondly, we''ve all seen commodity costs start to rollover. How do you think about pass through to pet food pricing as the increases abate? I would take it you don''t expect to see pricing cuts, but how does that work both for street price and also for your margin as you move into next year?

Philip L. Francis

Matt, this is Phil. The history in pet food certainly and I think grocery as well is that when frontline prices go up and then commodity prices abate a bit they almost never, in fact I''d say, almost never, never come down. What we think is going to happen we are beginning to see early signs of this. People who are on futures prices know that they''re going to abate and going to come down. I think people are going go leave frontline prices alone, frontline costs. I think their promotional spend as they try to grow their business will be the way they''ll go rather than a frontline based cost kind of cut. We''ve been pretty religious about maintaining margin rates rather than just dollar for dollar as we''ve gone through and other people have followed that pattern as well and in the last couple of weeks we''ve had a couple people who, based upon a story which is delayed reaction to oil up and so forth, we actually are going to have a couple of pet food price increases we know about in January of ''09.

Matthew Fassler – Goldman Sachs & Co

Got you. Thank you so much.

Operator

Our next question is from Alan Rifken from Merrill Lynch, your question please?

Alan Rifken – Merrill Lynch

Good afternoon as well. A couple of questions, we certainly applaud your proactiveness in continuing to take down your CapEx and your store count but, Phil, could you maybe just provide some empirical evidence that will tell us that its really more of a function of the current environment as opposed to your belief that maybe your approaching saturation sooner than what you thought? Then I have a follow-up please.

Philip L. Francis

Your hypothesis or your suggestion I concur with. Speaking for myself, I have been accused of being an optimist and a Pollyanna more than I have been considered conservative and I think the consumer, this time I''m not a Pollyanna as I look at the next 12 or 18 months. I think the consumer is in trouble this time and so based upon that and over the last six or nine months, and with Chip''s voice added to the mix, we''ve got a very realistic conservative view that today may be the new model for 18 or 24 months. We’re not a business that has been CapEx starved. So we''re in decent shape anyway, and so we have got ourselves down to either customer facing or differentiation initiatives. The other stuff we pushed off. We have been able to push out real estate. I mean our ''10 real estate is going to be our ''09 and ''10 real estate mostly. The ''09 real estate''s going to be done in ''09 and ''10 basically because projects in some cases are delayed because developers couldn’t fill up their co-tenancy requirements.

But at the rate of 50 per year we think the questions about saturation actually are off the table. We''ve got a long way to go and at 50 or so per year this is a matter of our pivoting 30% or 40% in our view of the macroeconomic world, and being a company that hasn''t been starved for capital. So, we''re going to hunker down but take care of the customer and take care of differentiation and should, if and when there''s a glimmer, we''re going to be prepared to rock and roll again.

Alan Rifken – Merrill Lynch

Okay thank you, one follow-up if I may? As you continue to reduce CapEx and as your cash flow generation continues to increase, what''s the order of your priorities with respect to plowing back that incremental cash flow that is generated?

Lawrence P. Molloy