Walmart plays around with pricing

Walmart plays around with pricingWalmart's pricing on soda has been making news lately largely because anything to do with Walmart and pricing makes news. When the largest retailer in the world slashes prices on a household staple, or starts to raise them, then pretty much everyone listens.

Prices of soft drinks have been hovering around $5 for a 24-can pack at Walmart since Memorial Day, when the retailer started getting aggressive with pricing in the category, including Coca Cola and Pepsi products. But according to reports, Walmart has begun raising prices to $6 for the same size soda pack in some markets. Could this be a trend or is it much ado about nothing?

The price increase adds five cents per can, for a family of heavy soda drinkers this can make a significant difference, but the price of soda has always fluctuated pretty dramatically. Supermarkets and drug stores offer amazing deals on soda around holidays like the Fourth of July or Memorial Day. In the Chicago area where I live, a local supermarket was practically giving the stuff away offering a "buy two, get three free" promotion on Coke products for the Easter weekend.

Soda does seem to have become a line in the sand for retailers though. Last year Costco made news when it booted Coke products from its stores, saying the prices being offered to its members from the manufacturer were not competitive. The boycott didn't last long and when WalletPop conducted a pricing survey comparing membership clubs to other retailers, Costco's price on Coke products at the time beat everyone -- including Walmart.

Walmart doesn't like to be beat on price, but nor does it raise and lower prices according to seasonal demand. That's in direct conflict with its Every Day Low Pricing philosophy. If, as analyst Mark Swartzberg at Stifel Nicolaus suggests, Walmart is embarking on this practice, then there's a lot more to this soda pricing story than the price of a can of Coke.
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