The planned price cuts are PepsiCo’s latest effort to win back consumers as demand for snacks and drinks has slipped.
WASHINGTON β PepsiCo said it plans to cut prices by 15% on popular snacks such as Lay’s, Doritos and Cheetos ahead of the Super Bowl.Β
The company announced the changes on Tuesday, confirming that prices will be reflected this week as much of the country prepares for Super Bowl Sunday. PepsiCo’s planned price cuts are the company’s latest effort to win back consumers struggling with higher prices.Β
“Weβve spent the past year listening closely to consumers, and theyβve told us theyβre feeling the strain,β Rachel Ferdinando, CEO of PepsiCo Foods U.S., said in a news release Tuesday βLowering the suggested retail price reflects our commitment to help reduce the pressure where we can. Because people shouldnβt have to choose between great taste and staying within their budget.β
PepsiCo has leaned on price increases as the cost of packaging, ingredients and transportation rose. In the fourth quarter, PepsiCo hiked prices by 4.5% globally. Prices for PepsiCo beverages rose 7% in North America, while prices for the companyβs snacks ticked up 1%.
That has pumped up revenue, including in the most recent quarter. PepsiCo said its net revenue rose 5.6% to $29.3 billion in the October-December period. That was higher than the $28.9 billion Wall Street was expecting, according to analysts polled by FactSet. But the price increases have also weakened demand, and consumers have begun swapping out brands they are familiar with for cheaper versions or cutting back altogether.
βReducing prices on many consumersβ favorite snacks is an important action,β Ferdinando said in a statement. βWeβll continue taking steps that keep our most loved brands within reach, while maintaining the same quality and same taste that consumers love.
βLowering prices is one step β an important one β in our commitment to deliver for consumers and strengthen our brands for the future,β Ferdinando said. βWeβll continue listening, learning and taking action to keep our consumers at the center of everything we do.β
In addition to price cuts, PepsiCo plans to accelerate the rollout of new offerings with simpler, healthier ingredients, including Gatorade Lower Sugar and Simply NKD Cheetos and Doritos, which contain no artificial flavors or colors. Lay’s potato chips will soon introduce versions made with avocado oil and olive oil.
PepsiCo is also responding to growing demand for functional ingredients like protein and fiber. Among its new products are Doritos Protein and Pepsi Prebiotic, which it said sold out within 30 hours after its release on Black Friday. PepsiCo said the soda will soon be available across the United States.
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