PepsiCo is cutting prices on its top snack brands, including Cheetos, Doritos, Lay’s, and Tostitos, by up to 15% in an effort to ease consumer financial strain.
The price reductions, set to roll out across the US this week, come just ahead of the Super Bowl, one of the busiest snack-buying weekends of the year.
The company’s move responds to feedback from shoppers who have said rising everyday costs are making daily choices more difficult.
“We’ve spent the past year listening closely to consumers, and they’ve told us they’re feeling the strain,” said PepsiCo Foods US CEO Rachel Ferdinando, CBS News reported.
“Lowering the suggested retail price reflects our commitment to help reduce the pressure where we can.”
Retailers ultimately determine the in-store price, so customers may see even greater savings depending on the store.
The company also emphasized that the price cuts will not affect packaging or product quantities.
The announcement follows a period of higher prices that had weighed on demand. In the fourth quarter, PepsiCo raised beverage prices by 7% and snack prices by 1% in North America.
The company has also faced a slowdown in snack purchases due to appetite-suppressing weight-loss drugs, which have reduced overall snack consumption.
PepsiCo Price Tests Show Positive Results
PepsiCo CEO Ramon Laguarta said the company had tested similar price reductions in select markets last year with positive results.
“Volume return is pretty good, and that’s what the category needs,” he said during a call with Wall Street analysts on Tuesday.
The tests indicated that consumers responded enthusiastically, boosting purchase frequency and brand engagement.
According to CNN, the price cuts also align with a broader strategy agreed upon with activist investor Elliott Management, which holds a $4 billion stake in PepsiCo.
The investor had pushed the company to improve sales and drive growth, including lowering prices to make products more accessible.
In addition to reducing prices, PepsiCo is introducing trendier snack options. These include protein-packed Doritos, fiber-filled popcorn, and Lay’s chips made with avocado and olive oils, aimed at appealing to health-conscious and adventurous consumers.
Snack sales for PepsiCo in North America have been sluggish in recent quarters, with volumes falling 1% in the latest earnings report.
Originally published on vcpost.com
