The Coca-Cola Company (NYSE: KO) shares plummeted by 4.8% in Thursday’s trading session amid growing concerns that weight-loss drugs like Ozempic and Wegovy are causing customers to purchase fewer groceries and consume fewer calories.
John Furner, the CEO of Walmart’s U.S. operations, told Bloomberg that the retail giant has noticed a “slight pullback” in the overall shopping habits among customers using appetite-suppressing medications like Ozempic and Wegovy. However, he emphasized it is too early to draw definitive conclusions about the long-term effects.
CEOs and investors in the industry have begun to closely study the effects of this weight-loss craze on consumer behavior. Walmart is actively analyzing anonymized data to understand how shopping habits change when people start taking these drugs. Even snack food companies like Pringles and Cheez-Its are exploring the potential impact on dietary behaviors.
Ozempic and Wegovy, manufactured by Novo Nordisk A/S (NYSE: NVO), have rapidly gained popularity as “miracle” weight-loss drugs. Trilliant Health report suggests that these medications have contributed to a remarkable 300% increase in U.S. sales between 2020 and 2022.
Furthermore, Walmart’s financial report in August showed that sales of GLP-1 medications, a category that includes Ozempic, boosted its revenue.
The downward spiral of the Coca-Cola Company (NYSE: KO) stock is further exacerbated due to the current weakness in the overall market and a recent surge in Treasury yields.
Coca-Cola stock has typically been a preferred choice among income-focused investors. This is due to its consistent dividend payments. However, as interest rates rise, fixed-income investments like bonds become increasingly appealing compared to dividend-paying stocks. This shift in investor sentiment is now putting additional downward pressure on Coca-Cola’s stock price.
Coca-Cola’s woes appeared to have had a domino effect on the beverage industry, with PepsiCo, Inc. (NASDAQ: PEP) also witnessing a significant drop in its stock price, losing 5.2%. In addition, other beverage stocks across the board have recorded substantial declines.
Kevin Putnam is a financial journalist and editor based in New York. He specializes in editing news and analysis related to U.S. stock market.
