Operator

We’ll go next to Simeon Gutman of Canaccord Adams.

Simeon Gutman - Canaccord Adams

Hey guys on the path to achieving double-digit earnings growth, and I don’t know whether you think about it on just the one-year or two-year basis, can you talk about structurally where the expense dollar growth you think has got to go? And then related to where it was this quarter, I think on a two-year basis, 17%, does it continue on a straight path downwards or are there some spikes along the way?

Wade D. Miquelon

I think if I interpret the question, kind of try and understand where SG&A will go over time, you know obviously this quarter’s SG&A, I think we made very good progress when you look at the number of store openings, which is the major driver. I guess what I would say is over this quarter and last quarter, we’ve actually seen our established store base, our comp store base SG&A negative. So we are making tremendous progress and then over time we’ll also overlay increased benefits that we get from the entire rewire initiative. So without giving a number, it should help you kind of factor into your model just how much of that SG&A is driven not only by store growth but also as we see the benefits fully come through, what we could potentially overlay on that.

Gregory D. Wasson

I think we feel good about where we are as far as rewiring and restructuring costs that we talked about earlier, but I also think we are doing a very good job on just an everyday operating model, with an operating structure within the stores. Store operations groups are doing a very good job controlling expenses, and I think with the slowing of stores, as Wade said, we’ll begin to see a pretty good improvement there.

Simeon Gutman - Canaccord Adams

And with the slowing of stores, and I guess as you get closer to the end of CCR, and I know I might be stepping forward, mid-single-digit expense dollar growth is a good ballpark to think about. And then let me just throw out my follow-on, markdown risk with CCR and the magnitude of that impact to gross margin, and then whether that’s likely to accelerate as stores go by or is that something that is being done in the warehouse as well?

Gregory D. Wasson

I’ll take the CCR markdown and let Wade come back to the SG&A but one of the things that we are doing and one of the reasons you saw a little bit of margin compression this quarter was a lot of that is coming from early markdowns from CCR products. And what we did is we decided to move on some of those items early, to be able to sell them through at a higher margin than waiting late until we roll out the departments and then having to take more aggressive cut. So we’ve been actually moving through a lot of that inventory over the last two or three months and taking advantage of normal traffic to discount some of those products at a more profitable price. So I think we’ve moved through a lot of that inventory. We’ve got some more to go through but a big chunk of that was what affected this month’s gross margin.

Wade D. Miquelon

On the SG&A, you kind of referenced over time can we see kind of a mid-single-digits, I would say that’s very reasonable and perhaps better.

Simeon Gutman - Canaccord Adams

Okay, thanks.

Operator

And we’ll go next to Mark Wiltamuth of Morgan Stanley.

Mark Wiltamuth - Morgan Stanley

Could you give us a little more detail on what we should be watching for in the healthcare reform in terms of generics, access for the public, margin compression that could come out of it?