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    C-store Beverage Sales Were Strong for Memorial Day 2012

    Wells Fargo Securities survey shows 90 percent of retailers believe beverage sales were up from last year.

    NEW YORK -- Business was good for convenience store retailers around the country over Memorial Day weekend 2012, reported Wells Fargo Securities, which surveyed beverage retailers that represent thousands of U.S. c-stores. Results show that beverage sales were strong over the holiday, one of the key events of the peak beverage-selling season, with 90 percent of respondents indicating they believed beverage sales were better than Memorial Day 2011; 60 percent indicated a five-percent or greater increase.

    Additionally, 91 percent of respondents indicated that beverage sales in the second quarter of 2012 so far are up vs. Q2 2011, with only 9 percent indicating flat sales. None indicated lower sales. This suggests that beverage companies will post solid Q2 results for North America, according to Wells Fargo.

    Features of the survey's results include:

    • Increased promotions appeared to drive sales -- Forty-three percent of respondents indicated that promotions from beverage manufacturers/distributors increased for Memorial Day 2012 compared to Memorial Day 2011, with only 14 percent indicating that promotions were down; all of that 14 percent suggested modest declines of less than 10 percent. Coca-Cola Co. appeared to lead overall promotions, while PepsiCo appeared to lead promotions for colas and sports drinks.
    • Online media and reduced priced points saw notable increases -- Sixty-five percent of respondents indicated that promotions through online media increased for Memorial Day 2012 over last year, and 43 percent indicated increased usage of lower price points. Low price points were found to be the most effective, with 60 percent of respondents indicating they are very effective.

      Meanwhile, usage of circulars and in-store displays was generally unchanged, according to 76 percent and 70 percent of respondents, respectively; however, 76 of respondents indicated circulars are not effective. In-store displays and traditional media appear were viewed as effective.

    • Pricing environment remains favorable -- The large majority of respondents indicated that beverage manufacturers have maintained prices in Q2 2012 vs. Q1 2012 with a modest number respondents indicating higher Q2 prices, stated Wells Fargo, which views this as an encouraging sign that beverage manufacturers are sticking to their guns, despite easing input cost pressures. Despite this, there was some concern over whether beverage manufacturers will be able to maintain current prices through 2012; 52 percent of respondents are either uncertain or do not believe manufacturers can maintain current price levels.

    Survey respondents also noted some positive changes from Pepsi, noting that "the company appears more aggressive in the marketplace." However, overall, respondents have not noticed a meaningful change since Pepsi's Feb. 2012 company meeting. This indicates that results from the turnaround are unlikely to be visible in the near term, according to Wells Fargo.

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