Costco Food Courts to Replace Pepsi With Coke
The debate over Coke versus Pepsi heats up as a popular club retailer declares its beverage of choice.
Costco CEO Ron Vachris confirmed during the company’s annual shareholders meeting last week that the club retailer will convert its food court fountain business back over to Coca-Cola, ditching Pepsi. The switchover from Pepsi to Coke is expected to happen this summer.
As reported by CNN, Costco solicits bids from companies for its fountain drink business in food courts. The deal isn’t just for the machines and syrup in the sodas, but cups, straws and other products. In 2013, the company switched to Pepsi after Coke had been a mainstay of its food courts for decades.
The switchover is an important one for consumers, as it's part of Costco's infamous $1.50 hot dog-soda combination deal. The reasoning behind Costco’s switch to Pepsi in 2013 was to “preserve the integrity” of its combo deal, whose price has remained the same since 1985.
Costco CFO Gary Millerchip eased combo fans' concerns in 2024 when he said, "the $1.50 hot dog price is safe."
According to CNN, to offset any losses of the mainstay meal deal, Costco raises prices on other goods it sells. The wholesale club operator has increased prices of pizzas and other items at its food courts.
The Coke switch was revealed during the same Jan. 23 meeting that saw Costco reject a proposal that targeted its diversity programs. Costco shareholders voted against National Center for Public Policy Research’s proposal that the retailer evaluate risks posed by its diversity, equity and inclusion (DEI) practices, arguing that such initiatives hold “litigation, reputational and financial risks to the company, and therefore financial risks to shareholders.”
According to Costco’s board, the proposed report wouldn’t provide “meaningful additional information” to shareholders, and the company believes that its current DEI efforts actually enhance the company’s capacity to attract and retain employees who inevitably help its business succeed.
Costco currently operates 897 warehouses, including 617 in the United States and Puerto Rico, 109 in Canada, and 41 in Mexico. It also operates e-commerce sites in eight countries. The company is No. 3 on The PG 100, Progressive Grocer’s 2024 list of the top food and consumables retailers in North America. PG also named the company to its Retailers of the Century list.
