Pope John Fall

Coca-Cola agreeing to be a loss leader in Checkers isn’t generosity... it’s desperation Coca-Cola committed economic suicide when they forced spaza shops to sell their cool drinks at the recommended retail price & refused to allow spazas to stock Coca Cola fridges with any other cold drink brand. The spazas margin disappeared and so did their loyalty. And just like that Coca Cola cut off its own hand and killed their competitive advantage in distribution having a Coke “within arms reach” Spaza customers have limited money. When Coke became too expensive they switched to Kingsley, Twizza and energy drinks it worked out well for the spaza shop making some profit while leaving change for the customers in their pocket Alternative colas filled that gap so well that Twizza ended up being bought by PepsiCo for R2.1bn giving Coke’s biggest rival a gateway into the R900bn informal economy Back to the Checkers customer… Middle-income families are stretched. Sugar tax has turned a 2L Coke into a treat instead of an everyday buy. 500ml Energy drinks started to undercut Coca-Cola 440ml buddies GLP-1 and a move towards health and wellness keeps Coke bleeding. Retailers now use cheap 2L Coke as the bait to get you through the door, knowing you’ll also grab higher-margin products on the way to the till Shoprite is also under pressure (so this partnership works well) as they have to compete not only with other retailers who are desperate to steal their market share back but compete for the consumers’ wallet. These type of “loss leader” specials are a popular strategy for retailers to increase footfall in the middle of the month but the consumers’ situation is so dire retailers have to get a share of the customers wallet before debit orders hit because after that there is nothing left to take Thank you for the picture Ghostie. It gave us a clear look at how desperate the competitive environment has become for both retailers and FMCG in this stagnant economy