Beverage giants Pepsico (NASDAQ: PEP) and Coca-Cola Co. (NYSE: KO) were on a downslide in trading following comments from retailer Walmart’s (WMT) CEO of U.S. operations, John Furner. Furner told Bloomberg in an interview that weight loss drugs like Ozempic and Wegovy were causing consumers to cut back on calories.
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According to the Bloomberg report, Walmart is doing a study and analyzing sales pattern changes using anonymized data from drug users. This study examines the purchasing habits of those on the medication compared to those who aren’t, focusing on appetite-suppressing drugs like Ozempic. However, Furner added that it was still too early to draw any definitive conclusions.
Wall Street analysts have already expressed concerns that the popularity of weight loss drugs could result in food and beverage companies changing their products to adapt to changing consumer behavior. According to a Wall Street Journal report, citing Morgan Stanley data, by 2035, nearly 7% of the U.S. population (24 million people) would be on weight-loss drugs. The drugs would propel them to cut their calorie intake by 30% daily.
What Stocks are Included in XLP?
For investors interested in getting exposure to the retail and beverages sector, the Consumer Staples Select Sector SPDR Fund (XLP) is an option. XLP has dropped by around 8% year-to-date. XLP’s top three holdings are Procter & Gamble (PG), Costco (COST), and Pepsico, with weights of 14.66%, 10.8%, and 9.9%, respectively.
