July 4th Cola Wars Pit Pepsi Against Coke; Cost of Case Lowered
It’s the real thing, all right. Southern California’s major grocery chains are waging a cola price war this week with more sizzle than a Fourth of July barbecue.
Coca-Cola has placed coupons in newspapers that--when combined with Alpha Beta coupons--allow shoppers to buy full cases of 24 cans for 49 cents. That’s less than people often pay for a single can.
Pepsi, meanwhile, has a deal at Ralphs that offers a free case of Pepsi with the purchase of a case. And at Vons, with special coupons, you can walk out with a case of Coke for 98 cents. Why such bargains?
Simple. More soft drinks will be bought and consumed over this holiday week than any other week of the year. With the one-two punch of the upcoming Fourth of July weekend and the lingering sluggishness in sales from the recession, the big soft drink makers want to make certain that their brands show up on picnic tables this week.
“Coke and Pepsi are saying, ‘Hey there, Mr. & Mrs. Consumer, no matter what deals anyone else offers, we don’t want you to forget us over the holiday,’ ” said Jesse Meyers, editor of Beverage Digest.
It’s the beverage makers’ promotions that have lured recession-weary grocery chains in Southern California onto the price-cutting bandwagon. Coke and Pepsi have placed $2-per-case discount coupons in area newspapers.
The cola makers and grocery chains are well aware that the best way to draw consumers into stores is to offer promotions that save consumers hard cash.
“It’s the same thing as giving away turkeys at Thanksgiving,” said Tom Pirko, president of Los Angeles-based Bevmark Inc., a beverage industry consulting firm. “It gets people into the stores where they might also be enticed to buy $100 or $200 worth of groceries. The stores don’t lose on this. They make it all back.”
This, after all, is the time of year that grocery stores count on consumers buying lots of items with relatively big mark-ups: charcoal, paper plates, plastic utensils and the like. So it’s no coincidence that grocers generally are requiring that shoppers purchase at least $5 worth of groceries for the special discount coupons on soda to be valid.
Still, the holiday weekend discounts are as deep as any that longtime industry observers can recall--evidence that the big supermarket chains in Southern California are battling for business like never before.
“I’ve never seen them this low,” said Don Beaver, president of the Sacramento-based California Grocers Assn. “It’s unreal.”
Spokesmen for Coca-Cola and Pepsi-Cola say the deals are mostly limited to Southern California where competition among cola makers and grocery chains is most heated.
“There’s nothing like this in any other area of the country,” said Jean Michel Bock, a spokesman for Atlanta-based Coca-Cola Enterprises. “When I heard I could get a case of Coke for 49 cents, I was ready to fly out there myself.”
Although consumers appear to be the big winners, the current deals have strict limitations of one case per customer.
That is a far cry from last July, when Pepsi lowered the base price of its six-packs to 99 cents, with no limits on the number that could be bought. As a result, some consumers loaded up, buying dozens and dozens of six-packs.
This summer’s discount “puts some kind of control on the flow,” said Andrew Giangola, a Pepsi spokesman. “The object is to give consumers a great value on the first case and hope that they feel good enough about it to come back and buy Pepsi the next time.”
Soft Drink Market Share Coke Classic: 20.8% Diet Coke: 9.3% Sprite (Coca-Cola): 3.7% Others: 32.5% Dr. Pepper: 4.9% Mountain Dew (Pepsi): 3.7% Diet Pepsi: 6.3% Pepsi: 18.8% Source: Beverage Digest
