Costco customers will have to look elsewhere for Coca-Cola products, with the retailer planning to stop carrying them in a fight about prices.
The public squabble between one of the nation's largest wholesale club operators and the world's largest soft-drink maker is likely to fizzle quickly. But it reveals real tensions as retailers and product-makers square off on prices.
As shoppers continue to grapple with the recession, retailers want to win their favor by giving them low prices. But that has been creating tension between such product-makers as Coca-Cola Co., who are working hard to maintain profit margins while meeting retailer demands.
Typically such negotiations take place behind the scenes, but once in a while, a public dispute erupts.
Retailers want to wield more power in determining pricing with product-makers, whom they depend on to stock their customers' favorite brands, Khermouch said.
Costco has been aggressive in putting up signs on store shelves and notices on its Web site.
"Costco is committed to carrying name-brand merchandise at the best possible prices. At this time, Coca-Cola has not provided Costco with competitive pricing so that we may pass along the value our members deserve," said a message on the company's Web site labeled "Price Alert!"
A Costco executive confirmed the move Monday but would not discuss the matter further.
The wholesale club operator, based in Issaquah, Wash., is not removing such products as Coke and Diet Coke from store shelves, but it does not plan to restock them "until the matter is resolved," according to the message on its site.
Coca-Cola said in a statement late Monday that it won't comment on ongoing negotiations but said Costco is an important customer and that it is committed to working with it "in a spirit of fairness."
Jim Hertel, the managing partner at retail consulting firm Willard Bishop said that most likely, the companies will recognize there is a mutual interest and will find a way to resolve it.
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