PepsiCo has beaten recent slides in US convenience stores

PepsiCo has beaten recent slides in US convenience stores

PepsiCo has cross-promoted its snacks and beverages to outperform the Coca-Cola Co in US convenience stores, an analyst has said.

In an call with investors following the release of its first-half results yesterday (25 July), the company said convenience-store trends outperformed overall results. Rivals Coca-Cola, following its own H1 results last week, said convenience-store performance has weakened since mid-May. 

This difference shows PepsiCo has successfully leveraged its share strength in convenience stores and, in a surprise move, co-merchandised and co-promoted its beverage lines with snacks, analysts Stifel Nicolaus said in a note yesterday.

Mountain Dew is PepsiCo's strongest driver in convenience-store share strength, the analysts said.

Stifel Nicolaus also highlighted PepsiCo's comments that its PET contracts allow it to hedge resin supplies, even though there is no market-based instrument for hedging the commodity. It implies PepsiCo has not benefited from recent declines in PET prices, the note said.

PepsiCo's shares ended trading yesterday up 2.2% at US$70.50.

Yesterday, PepsiCo said it did not expect to be badly affected by rising corn prices because of its future-buying programme and wide spread of commodities costs.