Key facts
- PepsiCo will raise prices on some chip brands, including Doritos and Ruffles.
- The price increases are expected to go into effect by the end of this year or early 2027.
- New prices will be lower than those implemented before earlier price cuts.
- The company is facing challenges from shifting consumer preferences towards healthier snacks.
- Weak demand is attributed to rising fuel prices and higher commodity costs.
- PepsiCo shares have fallen nearly 10 per cent so far this year.
PepsiCo is planning to increase prices on some of its chip brands to combat inflation and revive sales in the United States. The company is navigating shifting consumer preferences toward healthier snacking and weak demand from households pressured by rising fuel prices and higher commodity costs.
In February, PepsiCo had cut prices by up to 15 per cent on products including Lay’s and Doritos following customer backlash against previous price hikes. The new round of price increases, expected by the end of this year or early 2027, will be in the low- to mid-single-digit percentage range, aligned with inflation. A spokesperson for PepsiCo stated that these new prices will remain lower than they were prior to the earlier price cuts, and the company is committed to maintaining lower prices where possible.
Activist investor Elliott Investment Management, which holds a significant stake in PepsiCo, has been pushing the company to improve its performance. PepsiCo shares have fallen nearly 10 per cent year-to-date. The company has warned of higher commodity costs in the second half of the year and reported a 2-per-cent drop in second-quarter sales in its North American food business, with volumes in its North America business being negative throughout the year.