Coke caves under Wal-Mart pressure

CNN/Money ^ | June 8, 2006

[RWR8189]

Coke probably can't afford to lose the Wal-mart market.

Wal-mart can promote the competitors, Coke has no other recourse.

[deport]

Wal-Mart is going to save $$$ for Coke with this the way I see it.

---

Walmart looks at delivery/distribution as another cost cutting process. They will sometimes get the supplier to remove the shipping fees and have their Walmart trucks back up to the supplier's loading dock and take ownership there.

[Extremely Extreme Extremist]

If the drivers for Coke in your area are not union that is simply an anomaly.

Most of the drivers for bottlers are just kids in college barely making $12.00 an hour.

[Hendrix]

"Drivers get paid by the case delivered. If the bottling plant ships directly to a Wal-Mart warehouse, bypassing the local distributer, the driver gets hurt."

And the American consumer wins with lower prices by cutting out unnecessary middle men and costs.

[Bryan24]

Wal-Mart is like hiring someone to Mow your 1 acre yard for 5 dollars. They agree to mow it once a week rain or shine.

They show up and mow your yard with a huge tractor and bushhog. They cut down every sprig of grass in sight. And they leave huge ruts in your yard.

You would use someone else, but they've torn up the yard so bad that no else will mow it. So, you are stuck with them.

[cinives]

That article was written over 2 years ago.

[Extremely Extreme Extremist]

Coke probably can't afford to lose the Wal-mart market. Wal-mart can promote the competitors, Coke has no other recourse.

Coke prices in Wal-Mart are just the same as any other grocery stores, except that Wal-Mart honors competitors' prices and there's no limits on quanitity. Coke had plenty of recourses here. They could have told Wal-Mart to get bent and pulled their products out of their stores, which would have hurt some grocery sales at Wal-Mart because people buy soda in addition to other things too.

Coke passed up a good chance to fire a shot across Wal-Mart's bow, IMO. Don't get me wrong I love Wal-Mart but I like it when businesses stand up to them like the Snapper dealer and how Netflix ate Wally's lunch in DVD rentals.

[cinives]

That's a stretch of an analogy. I think I can still waltz into Wawa or a hundred other places and buy Coke any time I want some.

[Bryan24]

"American consumer wins... "

Eventually, Wal-Mart will force Coca-Cola to stop using distributors for their products and ship direct to Wal-Mart.

When that happens, some of the distributors will go out of business. Then, Coca-Cola becomes harder to find. Coke will lose market share.

If Coke tries to buck Wal-Mart, they yank their product off their shelves.

Coca-Cola is the loser in this.

[Extremely Extreme Extremist]

If they can get into banking they surely can start up a soft drink manufacturing company.

Two different things. Wal-Mart already makes soda through their Sam's Choice brand anyway.

[jwh_Denver]

"That article was written over 2 years ago."

It still wasn't true 2 years ago.

[Bryan24]

Oh, it won't happen immediately. But if Wal-Mart continues their predatory strong-arm tactics unchecked, it will.

[Hendrix]

"Eventually, Wal-Mart will put all of the local bottlers out of business ..."

That is a good thing since that business model is not efficient. Cut costs out of the supply chain and we all become richer with lower cost good and services. Walmart seems to be one of the few who really understand this basic economic principal. Others want to continue with the status quo (unions, obsolete jobs, etc.).

[cinives]

Exactly. Coke will evolve to be sure any business who wants to buy their product can continue to do so, or they will become a smaller company. Their choice.

You have to think Pepsi is next, or they've already changed to do this already.

[Who dat?]

Most of the drivers for bottlers are just kids in college barely making $12.00 an hour..

Maybe somewhere.

Most places they’re Teamsters and make significantly more than $12. That’s why the Teamsters have an entire conference devoted ONLY to brewery and soft drink and allied industry drivers.

[rahbert]

From the title I was thinking this was about Columbia.

[Bryan24]

What do you want, a world in which Wal-Mart is the only retail store?

Better yet, do you want Wal-Mart = Microsoft? They are already getting there fast with their horrendous service and store management.

[Hendrix]

"Oh, it won't happen immediately. But if Wal-Mart continues their predatory strong-arm tactics unchecked, it will."

Walmart is the big bad wolf. LOL. You are on the wrong website. Walmart is the best thing that has happened to our economy in 100 years! It has breathed life in to our free market system and halted the liberal/union model.

[BellStar]

I like Rock Star diet but can't find it because the big cola guys will not give them shelf space. Only place I find it as check out at some Wal-Marts.

[Hendrix]

"What do you want, a world in which Wal-Mart is the only retail store?"

You are comparing apples to oranges. Walmart sells products that can be bought anywhere, so there is no danager of a monopoly. What I want is more Walmarts because that is the most efficient business model for consumers. There is no danger of Walmart becoming the only retail store.