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UPDATE 2-Wal-Mart soda discounts spur buying frenzy-analyst
* U.S. soda prices 10-15 pct lower than Memorial Day '09
* Analyst says some Wal-Mart stores sold out of cases
* Says bottlers, can suppliers pressed to match demand (Adds closing stock price)
By Martinne Geller
NEW YORK, May 27 (Reuters) - U.S. soda sales are getting such a pop from discounts at Wal-Mart Stores Inc (WMT.N) that there may not be enough soft drinks to go around this Memorial Day weekend.
Bottlers and can suppliers are having trouble keeping up with demand as cans were "flying off the shelves," a prominent beverage analyst said on Thursday.
Bill Pecoriello of Consumer Edge Research noted that some Wal-Mart stores reported having sold out of 24-packs of soda before this holiday weekend, which unofficially marks the beginning of summer. Memorial Day falls on May 31 this year.
Wal-Mart said it lowered the price of 24-packs of canned soda to $5. But Consumer Edge, which gathered pricing data from retailers representing 15,000 stores across the United States, found 24-packs selling for $3.77 to $3.88 in many cities across the nation.
Those lower prices were the result of regional competition, Wal-Mart spokeswoman Linda Blakley said. "We are committed to being the low-price leader."
On average, two-liter bottles and cans of branded carbonated soft drinks are 10 percent to 15 percent lower than during Memorial Day weekend last year, said Consumer Edge's Pecoriello.
The most aggressive discounts were on cans of soda, with prices for Coca-Cola (KO.N) and PepsiCo (PEP.N) drinks down roughly 20 percent from a year earlier.
Spokesmen for Coca-Cola, Pepsi and Dr Pepper Snapple Group Inc (DPS.N) declined to comment.
Earlier this week at a Beverage Forum conference, Massimo D'Amore, chief executive officer of the Pepsi Americas Beverages business, said Wal-Mart, and not PepsiCo, was absorbing the hit from the discounts, so the drink maker's own margins would not be hurt. The overall sales impact would be seen later, he said.
Pecoriello predicted that Wal-Mart would keep the discounts in place throughout the summer, until the Sept. 6 Labor Day holiday, which should keep sales brisk for the next three months.
"The industry will enjoy very strong volumes" this summer, Pecoriello said, adding that the summer months normally account for an out-sized portion of the industry's annual sales and profits anyway.
And unlike other consumer products such as paper towels, soap or ketchup, whose actual consumption is unlikely to pick up because a consumer's pantry is well-stocked, Pecoriello said stocking a refrigerator often boosts consumption.
Pecoriello said Target Corp (TGT.N), Kroger Co (KR.N) and Safeway Inc (SWY.N) also lowered prices, but that their discounts were not always as deep as Wal-Mart's. He added that the discounts are likely to hurt private-label sodas, since they largely erase the price gaps that make private label sodas an economical choice.
Wal-Mart shares closed up 68 cents, or 1.36 percent, at $50.70 on the New York Stock Exchange. (Reporting by Martinne Geller; Editing by Richard Chang)
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