Fewer Memorial Day Promos Don't Diminish C-store Beverage Sales

NEW YORK — The unofficial start of summer was good to convenience store beverage sales, according to a new retailer survey by Wells Fargo Securities LLC.

The latest Beverage Buzz study found that total beverage sales in convenience stores accelerated, up 5 percent for Memorial Day 2015 vs. 4 percent last year, despite a deceleration of promotions. Nearly 90 percent of surveyed retailers reported higher sales this Memorial Day holiday weekend vs. last year, according to Bonnie Herzog, managing director of tobacco, beverage and convenience store research at Wells Fargo Securities.

In addition, foot traffic growth was solid and retailers expect a 9-percent increase this summer, driven by lower prices at the pump relative to last year and overall consumer optimism.

Looking at specific brands, The Coca-Cola Co. continues to outperform its peers in the convenience channel with the "best" promos, Herzog added.

Specifically, the survey indicates Coca-Cola's sales were up approximately 6 percent, compared to 5 percent for PepsiCo Inc. and 2 percent for Dr Pepper Snapple. Red Bull outperformed Monster Beverage Corp, with sales up 7 percent vs. Monster's 6-percent growth. 

"Our retailer contacts believe that Coca-Cola's Share-a-Coke promotion, which was very impactful last year, will help support sales growth, but won't necessarily have as large of an impact this year," Herzog noted.

Monster continues to face distribution issues, which is likely negatively impacting its sales in the second quarter. However, with an expected price increase in early fall and new innovation on the table for the fourth quarter, Monster should see improved results in the second half of the year, she explained.

"...We are broadly encouraged overall heading into second-quarter results for both beverage manufacturers and c-store retailers given the strong overall beverage sales thus far in the second quarter," Herzog said.