Delta To Lose Market Share To Pepsi Over Pricing: Old Mutual Securities

According to an analysis carried out by Old Mutual Securities (OMSEC), Delta Corporation is likely to lose part of its beverages market share to Pepsi. This follows the opening of a $30 million Pepsi plant in Zimbabwe this year. Said OMSEC,

Going forward, we expect a decline in the company’s overall market share (83 percent) for the sparkling beverage segment as well as margin compression as the Pepsi branded products are currently being sold at cheaper price points than Delta’s competing product offerings.

A one-off surge in demand may arise from election spending through various political party campaigns. An improvement in tourism arising from significant infrastructure upgrades in airports coupled with the opening up of the skies to new airlines is expected to improve beverage spending in city and resort hotels where Delta will benefit.

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