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In a shocking display of Dow Jones Industrial Average cronyism, fast-food titan McDonald's Corporation (NYSE: MCD) recently announced that it will stop test sales of soft drinks made by PepsiCo Inc. (NYSE: PEP). The decision means that Coca-Cola Company (NYSE: KO) products will retain their title as the preferred beverage line of the Golden Arches.
The announcement by Mickey D's ends an experiment where the fast-food chain offered bottled Pepsi beverages, including Mountain Dew, Gatorade, and Lipton tea, to consumers in several test markets. After the apparently underwhelming response from McDonald's clientele, Pepsi spokesman Larry Jabbonsky chalked up the experience to "a great opportunity and a great learning experience."
By my count, this is the second crushing moral loss for Pepsi during the last week. Time's Michael Scherer dealt the first blow when he reported on Friday that the Obama administration prefers Coke products to their Pepsi counterparts. In fact, when Scherer quizzed a White House official as to whether the administration truly preferred Coke, the staffer responded, "Don't most Americans?" Ouch.
However, one arena where Pepsi can enjoy equal footing with Coke is on the charts. Shares of both beverage companies have recently broken below long-term support -- in the 40-to-42 region for KO, and in the 50 neighborhood for PEP. For these perennially warring soda stocks, it looks like recessionary pressures are the great equalizer.
In fact, the outlier here is none other than McDonald's. Despite the Dow's bleak performance in 2009, shares of the burger baron are still holding steady atop long-term support from their 40-month moving average.
Elizabeth Harrow is an analyst and financial writer in the research department at Schaeffer's Investment Research. She is featured in the video series Schaeffer's Daily Q&A on SchaeffersResearch.com.
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Reader Comments (Page 4 of 4)
3-04-2009 @ 3:19AM
jgc711 said...
coke is the best...hate it when long john silver switched to pepsi...used to go there three times a week...now, it's like once a month...good decision, mcd...
3-04-2009 @ 3:21AM
neetwaytogo said...
for all of those coke drinkers let me ask you this...why would you want to drink something that when the syrup is transported the trucker has to have a HazMat license? Coke has been cleaning their engine blocks for almost 30 yrs if not longer...my books Pepsi will always be number 1.
3-04-2009 @ 3:21AM
Ben Dover said...
I guess coke is still "IT". Every establishment I ever go to and sell only pepsi, I order sierra mist, Orange soda or just plain water. Oh yeah and if they try and sneak in a CHEAPsi in place of a coke and tell me it's the same thing they get a lousy tip. COKE 4 LIFE!!! Only thing I use pepsi for is guests and save the coke for myself. ;)
3-04-2009 @ 3:37AM
hookmrl said...
I drink diet pepsi but never eat mc grease burgers they are nasty
3-04-2009 @ 3:41AM
Rainey said...
Thank god!!! I would never go back to Mc Donalds if they changed to Pepsi I always go there just because of Coke products. I wish Vegas would change to Coke. COME ON VEGAS follow Mc Donalds
3-04-2009 @ 3:43AM
Willis Fraley Jr said...
I am a pepsiholic and have been for 57 yrs and I will not change for coke so when I go to McDonalds I take my pepsi in with me?? I love the taste of Pepsi but I do love Cherry Coke?? Just sell both of them, more profit that way
3-04-2009 @ 4:27AM
Krystal said...
I enjoy Pepsi! But I also love Dr Pepper.
It is hard to get either at a restaurant. One clue to you all. Back in the day when the Pepsi and Coke challenge was first orchestrated. We were told to chill the Coke and serve the Pepsi warm. Usually people chose the cold drink. It is disappointing.
3-04-2009 @ 5:02AM
Misty said...
Fountain mountain dew is like liquid heaven. I only get Taco Bell when I get fast food, because everyone else has coke.
3-04-2009 @ 4:48AM
Barbara said...
I hate both Pepsi and Coke.
3-06-2009 @ 9:16PM
Brooke said...
Pepsi is far too sweet. I used to work at Universal Studios many years ago. Back then it was a Pepsi park. That's where I learned to drink water instead of soda. Coke rules, but I want my regular Lime Coke back darn it.
3-04-2009 @ 8:05PM
Vivi said...
I've always loved Diet Coke. I've hated Diet Pepsi since they changed the formula to taste more like regular. The regular pepsi and coke both are too sickly sweet to me. I work at McD's so I would have CRIED if they'd taken away my Diet Coke! And I dunno about your McD's but ours sells Dr. Pepper [unfortunately only in the regular kind.] But yeah if I go somewhere and it's a pepsi establishment, I'll get water, tea, or Diet MtDew if they have it.
3-11-2009 @ 1:32AM
Joe said...
I have preferred Pepsi all my life because it simply tasted good. No more. Pepsi just recently changed their logo and their packaging - giving you an 8 pack with an increase in prices. They also changed their formula and went too far. They killed it. Bye, Pepsi.