PURCHASE, N.Y. — In a move likely to cheer football fans and frustrated shoppers alike, PepsiCo announced Tuesday it is cutting prices on its most popular snack brands by up to 15%. The price drop affects household staples, including Doritos, Lay’s, and Cheetos, effective immediately.
The decision comes as the food giant grapples with a cooling market and mounting pressure from “sticker-shocked” consumers who have increasingly ditched name brands for cheaper private-label alternatives.
PepsiCo Foods North America CEO Rachel Ferdinando noted that the pivot is a direct result of a year spent listening to consumer feedback.
“They’ve told us they’re feeling the strain,” Ferdinando said in a statement. “Lowering the suggested retail price reflects our commitment to help reduce the pressure where we can.”
The timing is strategic. The price cuts are hitting shelves just days before the Super Bowl, historically one of the biggest revenue drivers for the snack industry. To ensure the message gets across, PepsiCo is rolling out new packaging labels that explicitly advertise the reduced costs.
The price correction isn’t just about goodwill; it’s about survival in a shifting economy. PepsiCo’s North American snack volume dipped 1% in the most recent quarter, signaling that price hikes implemented over the last few years may have finally hit a ceiling.
The company has also been under the microscope of activist investor Elliott Management, which recently built a $4 billion stake in the company. One of the key pillars of Elliott’s turnaround plan for PepsiCo was a more aggressive pricing strategy to boost “purchase frequency.”
While PepsiCo is lowering its suggested retail prices (SRP), the company cautioned that the final price at the register remains in the hands of the stores.
“Retailers ultimately set the price, so what you see in-store may vary,” the company noted, adding that some shoppers might see even deeper discounts depending on where they shop.
Major retailers like Walmart, Kroger, and Target have yet to officially comment on how they will pass these savings on to consumers.
Beyond price cuts, PepsiCo is attempting to modernize its portfolio to attract health-conscious Gen Z and Millennial buyers. Alongside the classic chips, the company is rolling out a new wave of “functional” snacks, including protein-infused Doritos, fiber-filled popcorn, and Lay’s chips cooked in avocado and olive oils.
Whether these “trendier” options—combined with lower prices—can reverse the downward trend in sales volume remains to be seen as the company enters its most critical sales window of the year.
