Pepsi opts not to raise prices, earns market share

PepsiCo opted not to raise prices during the four weeks ending on March 23,  which earned them market share from their competitors, but the strategy could bring pricing realization in below forecasts.

Morgan Stanley Analyst Bill Pecoriello said Pepsi’s average price per volume declined 3.7 percent during the month. During that time, the company’s volume advanced 10 percent, while the carbonated soft drink section as a whole advanced by 1.4 percent. That differential allowed Pepsi to gain 2.5 percent market share.

Pepsi also gained volume in the tea segment. Pecoriello reported that Pepsi sold 4.7 percent more RTD tea during the four week period than they did the previous period, but their average price per volume fell 5.2 percent, and the segment as a whole grew 3.1 percent.

Pecoriello wrote that Pepsi’s aggressive decision not to raise prices could lead other companies to do the same.

“(The) nstyle=””>ext period to watch is Memorial Day,” Pecoriello wrote.