What's this about Coca-Cola (NYSE: KO) prices going up after Labor Day? Look, Coke, you might be overestimating just how addictive your product really is.
Granted, I do have a bad Coke habit -- about eight cans per day (and that doesn't include that venti latte I get every morning from Starbucks (Nasdaq: SBUX)), and getting my daily fix of this delicious, refreshing nectar of the demi-gods is putting a dent in my wallet as it is. I've seen 12-packs of Coke go for more than $5 a pop, and that's already offensive to me.
I already play favorites by trying to go to whichever grocer is having the grandest Coke sale. For example, if Safeway (NYSE: SWY) has a “buy two 12-packs, get three free” special, you guessed it -- baby, I'm there. Of course, I'll settle for "buy one, get one free," three for $10, four for $12 ... I'm not too picky, I'm just incredibly averse to paying full price, now more than ever.
So I understand that Coca-Cola Enterprises (NYSE: CCE), the bottler making the decision, may find it prudent to boost flagging business by raising prices. Shareholders may see the logic in the move, too. Of course, logic doesn't always hold up in the harsh light of reality. And the reality is that consumers are really challenged by economic pressures these days, and apparently "declining U.S. soda sales" is one reason for the planned price hike. Huh?
I mean, come on -- at around $3.50 per gallon, folks started trading in gas guzzlers, going compact, and driving less, developments that certainly haven't helped General Motors (NYSE: GM) and Ford (NYSE: F). They are also suddenly remembering there's -- wait for it -- water in the tap. I don't think they'll shrug off the skyrocketing price of Coke (in fact, it's pretty clear they've already cut down, likely because of pinched budgets).
If people like me, who scour websites to figure out where Coke's on sale every week, are already trying to limit our financial losses from our silly little habit, there is, of course, the completely rational possibility that some of us hardened addicts might -- gasp -- quit.
I'm thinking raising prices might be a really big strategic mistake -- and this wouldn't be the first time the company’s made what some might even call an idiotic mistake. Anybody who comes up with Coca-Cola Rehab might be onto something.
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