PepsiCo says it's cutting prices on snacks like Lay's and Doritos by up to 15%, as consumers feel 'stretched'
ADAM GRAY/Reuters
- PepsiCo is cutting prices on some of its brands, such as Lay's, CEO Ramon Laguarta said Tuesday.
- The price cuts will be as high as 15% for some products, the company said.
- It's the latest example of how the K-shaped economy is shaping companies' strategies.
The company behind Cheetos and Lay's plans to cut snack prices as many shoppers continue to feel financially pressured.
PepsiCo is cutting the suggested retail price of some snacks, such as Lay's, Doritos, Cheetos, and Tostitos, by up to 15% this week, the company said on Tuesday.
"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 US, said in a statement.
The price cuts won't happen across the board, CEO Ramon Laguarta said on the company's fourth-quarter earnings call on Tuesday.
PepsiCo will be "very surgical" and focus on products "where we see that the biggest friction for higher frequency is price," Laguarta said.
PepsiCo's fourth-quarter results largely beat analysts' expectations. Shares of the beverage and snack maker were up about 5% on Tuesday morning after the company reported earnings.
Inflation on many items, including food, has moderated over the last few years after a run-up following the pandemic. Still, many shoppers have said prices have remained high at grocery stores and restaurants.
The financial pressure is particularly high for lower-income consumers, while many more-affluent shoppers have kept their buying habits, leading to what's become known as the K-shaped economy.
PepsiCo's guidance for 2026 assumes that middle- and low-income consumers will continue "to be stretched and choiceful" as they shop for groceries, including snacks, Laguarta said.
PepsiCo is also relaunching some of its biggest brands to attract more purchases by addressing shoppers' concerns about health. The company is marketing its Lay's chips brand as a product without artificial ingredients in time for the Super Bowl on February 8, Laguarta said.
"We know that that is going to bring consumers to the brand," he said.