PepsiCo says it's received the message from shoppers who've complained about higher prices. The food giant is now dropping the cost of its chips — including Lay's, Doritos, Cheetos and Tostitos — "by up to nearly 15%."
PepsiCo on Tuesday said that its new retail prices on chips will start rolling out as soon as this week, ahead of the Super Bowl snack-shopping sprees.
The company is among many big-brand giants feeling shoppers reconsider their food budgets after years of stubborn inflation. Especially in the snack aisles, people have been turning to more store-brand options — or skipping those items altogether. That's after food companies repeatedly raised prices after the pandemic, betting on shoppers' brand loyalty.
"We've spent the past year listening closely to consumers, and they've told us they're feeling the strain," Rachel Ferdinando, CEO of PepsiCo Foods U.S., said in a statement Tuesday. "People shouldn't have to choose between great taste and staying within their budget."
The food giant — whose brands also include Gatorade and Quaker Oats — last month said it would lower prices to boost sales and reduce its product lineup by a fifth. This was part of an agreement the company struck with activist investor Elliott Investment Management to improve its North American food business.
General Mills — maker of Cheerios, Betty Crocker and Annie's — also said last year that it plans to discount roughly two-thirds of its offerings. Both companies noted that retailers have the ultimately control over the prices seen on store shelves.
PepsiCo's financial report on Tuesday showed the volume of food items sold in North America dropped by 1% in the latest quarter, even as overall sales grew. CEO Ramon Laguarta told investors on a call that affordability was the biggest hurdle preventing low- and middle-income shoppers from buying more brand products.
PepsiCo is also chasing many food trends — releasing Doritos with protein and Lay's chips made with avocado or olive oil. Laguarta said it will also release a low-sugar Gatorade without artificial ingredients and revamp its Quaker marketing to emphasize the oats' fiber and whole grains.
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