PepsiCo to Cut Some US Snack Prices After Backlash
PepsiCo is responding to consumer concerns by implementing price cuts on select snack products in the US. This decision comes after criticism over previous price increases and growing competition from appetite-suppressing GLP-1 medications.
Price Reductions on Popular Snacks
– Doritos: Prices will decrease by nearly 15%.
– Lays (known as Walkers in the UK): Pricing adjustments to follow.
– Cheetos: Prices will also be reduced.
PepsiCo’s Commitment to Consumers
The snack giant emphasized that it is listening closely to customers who are feeling the strain of rising living costs. As the popularity of weight-loss medications like Wegovy and Ozempic grows, many users report decreased food consumption, prompting PepsiCo to adapt its offerings.
– The company assures that while prices will drop, product sizes, ingredients, and flavors will remain unchanged.
– However, it noted that listed prices are only recommendations, with actual shelf prices determined by retailers.
Timely Move Ahead of the Super Bowl
PepsiCo is launching this price-cutting initiative just before the Super Bowl on February 8, a peak day for snack sales. The firm, which owns other brands such as Quaker Oats, Gatorade, and Lipton iced tea, reported a revenue of $29.34 billion (£21.14 billion) for the quarter ending December 27.
– CEO Ramon Laguarta mentioned a strong focus on portion control, as many consumers increasingly prefer smaller servings.
– Over 70% of PepsiCo’s food products in the US are currently single-serve.
Health-Conscious Product Development
As part of its strategy to adapt to changing consumer preferences, PepsiCo plans to introduce Doritos Protein later this year, reinforcing its pivot towards health-focused products. However, the primary challenge remains maintaining affordability.
– Rachel Ferdinando, PepsiCo’s US food chief, stated, “We’ve spent the past year listening closely to consumers, and they’ve told us they’re feeling the strain. Lowering the suggested retail price reflects our commitment to assist.”
Market Response and Future Challenges
In early trading, PepsiCo shares rose nearly 4%. However, the stock has experienced a 5% decline in 2025 and has lagged behind competitor Coca-Cola over the past five years. Looking ahead, the company is predicting 2026 to be a record year of productivity savings.
Despite a recent easing in US inflation, food companies still face challenges from rising material costs—particularly tariffs on aluminum—as well as increasing labor expenses and extreme weather effects.
Consumers have also voiced their frustrations regarding shrinkflation, where products become smaller without a corresponding drop in price. In 2023, several PepsiCo items received shrinkflation warning stickers in Carrefour, a French supermarket chain, which in the following year decided to cease selling PepsiCo products in several European markets due to unacceptable price hikes.
Conclusion
PepsiCo’s decision to cut snack prices in the US highlights its responsiveness to consumer pressures and changing market dynamics. As the company navigates challenges such as rising costs and shifting consumer preferences, it remains committed to providing affordable, quality products that meet the evolving needs of its customers.