Coke or Pepsi? The perennial debate takes a new twist in the price negotiation battle between retailers and global food giants.
Carrefour has decided to stop stocking PepsiCo products in France, including Pepsi, Lay’s chips, and 7Up, citing their increased costs. While this decision aligns with the grocer’s financial considerations, the impact on customers loyal to Pepsi products who shop at Carrefour remains uncertain. Will they seek alternative sources to satisfy their Pepsi cravings, or will brand loyalty to Carrefour lead them to explore substitutes like Coke?
In the past few years, PepsiCo has consistently increased the prices of its food and beverage products, asserting that such adjustments were essential to counteract inflationary pressures.
Starting Thursday (Jan. 4), Carrefour stores in France will feature shelves stocked with PepsiCo products, each adorned with a notice: “We are no longer selling this brand due to unacceptable price increases,” according to a spokesperson for the French retailer.
The supermarket behemoth, with over 12,000 stores globally, clarified that these notices will be exclusive to France. In a fancy Carrefour supermarket in Paris’s 16th arrondissement, you could already see the change on the shelves.
“It doesn’t surprise me at all. I think there will be lots of products left on the shelves because they have become too expensive and they are all things we can avoid buying,” shared shopper Edith Carpentier with Reuters.
Pepsi’s higher prices have helped boost its earnings thus far, prompting a third upward revision of its 2023 profit forecast in October. However, the company announced that in 2024, it will only introduce “moderate” price increases.
Retailers are grappling with the question of whether Pepsi products are justified at these price levels. How will these decisions impact customer brand loyalty?
Being a loyal customer means you tend to buy more often and stick around longer. In simple terms, people who are either new or stick with a store for a long time are the ones who usually get the most benefits from loyalty programs. On the flip side, folks who shop here and there in different categories are just not as likely to use store cards for their purchases.
According to a collaborative report by PYMNTS Intelligence and Banyan titled “Leveraging Item-Level Receipt Data: How Personalized Card-Linked Offers Drive Store Card Usage,” the study found that among various categories, new shoppers and loyal customers show the highest interest in receiving personalized offers from grocery merchants. The report reveals that two-thirds of loyal shoppers and those newly exploring brands or merchants expressed their interest in receiving card-linked offers specifically tailored for grocery stores. In contrast, only half of sporadic shoppers shared the same level of interest.
Transforming occasional shoppers into loyal customers poses a challenge for merchants, given that almost 35% of these shoppers have no interest in receiving card-linked offers for any store card. Recognizing and addressing these subtle preferences could be a crucial factor for businesses striving to cultivate loyalty across diverse customer groups.
While we don’t know the exact number of shoppers that engage in Carrefour’s loyalty program, what’s evident is that people usually lean toward being either Pepsi or Coke fans. This preference likely extends to other products in Pepsi’s assortment as well.
When looking at Reddit, user bitterlittlecas said: “If you don’t have coke, just bring me water,” while another user said, “Pepsi wins.”
Imagine being a loyal Pepsi customer strolling down the aisles of their neighborhood grocery store only to discover that their beloved Pepsi products are no longer available. The initial reaction is disappointment and frustration, especially for those who have cultivated a deep attachment to their preferred beverage.
The absence of Pepsi on the shelves leaves a void that loyal customers may find challenging to fill. Questions arise about the rationale behind the grocery store’s decision, and individuals may voice their discontent.
In the absence of Pepsi, some consumers may opt to explore alternatives. While they may have a strong brand preference, the situation could prompt them to venture into uncharted territory and discover new favorites.
However, brand loyalty can also be so potent that it influences shopping behavior. In extreme cases, customers might decide to switch their grocery shopping allegiance to a store that continues to carry their preferred beverage.
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