Cost of Convenience Not the Real Thing for Store Owner
Posted July 25, 1999
RALEIGH — When you go to a convenience store, you expect to pay more for food and drinks. It is the price of convenience. Or is it? In some cases, the loser of the pricing game is not the consumer, but the store owner.
A Raleigh convenience store owner says that is the case when it comes to his relationship with a Coca-Cola distributor. Specifically, he is concerned with the price he is asked to pay for 2 liter bottles and 12 packs of Coke.
Convenience store owner Steve Byers says it is the distributor who is making him choose between practically making no profit or charging consumers too much.
"Well basically it gives the convenience store owners a bad name," says Byers.
Byers says Coca-Cola Bottling Company Consolidated, a company not directly affiliated withCoca-Cola, gives him four options. Here are two of them:
- He can buy a 2 liter bottle of Coke for 85 cents a bottle wholesale but can only charge consumers 89 cents -- almost no profit.
- If he wants to make more, he has to pay more for the same bottle of Coke. His cost: $1.34 with no restrictions on what he charges consumers. It is the same soda, at a cost of almost 50 cents more.
"Out of all the vendors I have, Coke is the only one that does this," Byers says.
This pricing system frustrates other convenience store operators as well.
In a statement from Coca-Cola Bottling Company Consolidated, spokesperson Lauren Steele says by limiting the price a store can charge "we're trying to protect the consumers' interest."
A Raleigh antitrust attorney says there is not much convenience stores can can do about the practice.
"The convenience store is not able to make a profit, so the result of this system is that it's forcing the convenience store to, in fact, to charge a higher price than it might otherwise charge," says attorney John Graybeal. "But is this total system illegal under the antitrust laws? Probably no," he says.
The owner of the Raleigh convenience store has taken matters into his own hands. He keeps few Coca-Cola products on store shelves, giving rival Pepsi more space. To avoid the Coca-Cola vendor's price structure, Byers buys Coke retail. He says he can buy the product for half the price at a grocery store than what he is charged wholesale.
Apparently, it is legal to resell products like soft drinks. Byers and one other convenience store owner say they still charge a lot for 2 liter bottles of Coke in hopes of driving people to buy Pepsi instead. andJohn Cox