Overview
- PepsiCo has begun lowering prices by as much as 15% on Doritos, Cheetos, Lay’s and Tostitos, and is shifting to larger value-size bags to make its snacks feel like a better deal.
- CEO Ramon Laguarta said early tests of the lower prices lifted sales volume and helped secure a double-digit increase in shelf space at Walmart, Costco and Target.
- Steep increases since 2021 sent some large bags past $7 and drove shoppers to cheaper store brands and rivals like Takis, which led Walmart to pull back Frito-Lay shelf space.
- PepsiCo waited to cut prices and Frito-Lay then missed internal revenue goals by more than $1 billion in two straight years, with revenue turning negative in 2024 after 53 quarters of growth.
- The company is trimming its snack lineup by about 20% and still faces higher ingredient and packaging costs that could squeeze margins, after a stock slide that wiped out about $50 billion in market value since 2023.