PURCHASE, N.Y. – The sale
is over. PepsiCo Inc., which said recently that is tired of customers mostly
buying its products on sale, is changing its pricing structure, Reuters
reports.
The soft drink company is
testing “hybrid everyday value,” that will close the distance between holiday
sale prices and every other day. The new system will keep the discounts on
holidays — which typically offer a dozen 12-ounce cans for $2.50 to $3 — closer
to regular pricing of $5.99.
The pilot program started
in several markets at some retailers, with a broader rollout scheduled for this
summer, according to Al Carey, CEO of PepsiCo Americas Beverages. “This is a
very important idea,” he said. “We are way too dependent on deep discounting
12- and 24-packs of our drinks during the holidays.”
Across the soft drink
industry, 50% of its yearly volume is sold in around 12 weeks, with the rest
sold during the other 40 weeks, said Carey. “We have trained the consumer to
wait until the price goes down and then go fill up your garage and then don't
buy it again for a very long time until the price goes down,” he said.
That practice has been
difficult for both beverage manufacturers and retailers, who rely on soda sales
to increase foot traffic. “ If you can get the discipline to execute this, I
think it improves the profitability of the total business for us and also for our
customers,” said Carey.