Costco and Coke Break Ties As Pricing Dispute Bubbles Over

Tuesday, January 1st, 2013 By

Ties likely will be mended

Image from Flickr.

Image from Flickr.

Like a couple of runaway teenagers proclaiming they “don’t need nobody!” Coke and Costco are sticking to their respective guns. The result is that Costco won’t restock Coke products until the companies reach an agreement. Costco and Coke couldn’t agree on  pricing, so Costco said it won’t order Coke products unless the Coca-Cola Company comes down on prices. This is a financial situation that payday loans can’t fix.

Though Costco is one of the largest wholesale retailers in the U.S., Coca-Cola Company is definitely the Goliath of this fight. Coke is the largest soft drink maker in the world, and let’s not forget the Coca-Cola Company owns several non-soft-drink brands, too. The outcome of this feud will likely depend on whether the absence of the Coca-Cola Company’s many beverage brands puts a dent in Costco’s profits.

Coca-Cola brand recognition

It’s tough to predict how much of an effect not carrying Coke products will have on Costco. For every person who will gladly drink any cola flavored beverage at hand, there’s a person who says “just water” after a restaurant server says they carry Pepsi. For every office employee who uses whatever vending machine is available, there’s one who will walk across the street to buy his or her favorite brand of soda.

The cola wars have successfully created a large group of people who are vehemently loyal in each camp, but Costco will just have to do the math to find out whether paying the price for Coke is worth it. My gut tells me that Costco customers are more concerned with saving money than they are with brand loyalty. However…

Coke is more than Coke

We must bear in mind that it isn’t just cola at stake here. The Coca-Cola Company owns many beverage brands, including Sprite and Barq’s rootbeer. It also makes Vitamin Water, Minute Maid products, Odwalla, Powerade and Dasani bottled water, just to name a few.

Costco does carry substitues for most Coca-Cola Company products, but there are definitely customers who will opt to buy their favorite beverages elsewhere rather than buying another brand of orange juice or Vitarain instead of Vitaminwater. The question is how many.

Previous Article

« Yahoo to unveil tablet-based news service later this year

Yahoo announced the Livestand tablet-based news and magazine publishing service. This comes just in time for the rumored release of iPad 3. A Yahoo! billboard advertising the company's many consumer applications.
Next Article

Anonymous takes MasterCard down | Visa next in Operation Payback »

Operation Payback, organized on the 4Chan message board, aims to punish Mastercard and other payment services for barring WikiLeaks donations. Mastercard

Other recent posts by bryanh

Ways to manage finances in 2010

Although there are financial changes coming to the market, consumers are still cautioned to manage finances on their own to avoid hardships.
Consumers are still cautioned to manage finances on their own.

Plan your debt consolidation carefully for real debt reduction

Debt consolidation can be a good strategy for debt relief -- with careful planning to ensure you do not end up paying more in the long run.
A man with his fingers on his temple, looking at a paper and stressed over debt.

Bank direct deposit advance versus payday loans

Banks are considering the use of payday advances to supplement the cost of lost overdraft fee's totaling $15 billion, due to new rules that ... READ MORE