PepsiCo to raise some prices after cuts failed to grow sales

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Photo by Kevin Carter/Getty ImagesPepsiCo Inc. is raising prices on some chips, soda and dips just months after pledging to make its snacks more affordable.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountThe company is expected to increase the prices on grocery-store-sized bags of chips, including Doritos and Ruffles, which had been cut earlier this year, according to people familiar with the plans. The price increases, which will extend to other brands, including SunChips, are expected to go into effect at the end of this year or early 2027, according to the people, who asked not to be named because they are not authorized to speak publicly.The prices of certain chips will go up by a low-to-mid single digit percentage, aligned with inflation, a spokesperson for PepsiCo said, adding that the new prices will be lower than where they were prior to the price cut earlier this year. The company is still working to maintain lower prices where it can and remains committed to its affordability effort, the spokesperson said.Breaking business news, incisive views, must-reads and market signals. Weekdays by 9 a.m.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Posthaste will soon be in your inbox.We encountered an issue signing you up. Please try againPepsiCo shares fell to a session low following Bloomberg’s report, declining as much as 0.8 per cent at 10:54 a.m. Thursday in New York. The stock has dropped almost 10 per cent this year.PepsiCo is under pressure to grow sales in North America, but heightened costs and an increasingly strained United States consumer are challenging its efforts. The prices of its chips, in particular, have come into focus after the company lost shelf space because they had gotten too expensive.In February, PepsiCo said it was cutting prices by as much as 15 per cent for key chip brands in a bid to boost sales that had faltered after prices got too high, with some chips topping US$7 a bag. But the company saw a two per cent decline in revenue in its North American food business and flat volume in its most recent earnings in July. PepsiCo chief executive Ramon Laguarta said the consumer was under more strain than expected, due to higher gas prices.PepsiCo is also raising prices this week on some dips, including extra-large and extra-extra large jars of Tostitos salsa and Fritos canned dips, according to a memo viewed by Bloomberg News. At Dollar General stores, the extra-large Tostitos salsa jars are now priced at US$4, up from US$3.80, while the extra-extra large jars are now US$5.50, up from US$4.95. The Fritos canned dips increased to US$3.75 from US$3.30.The company is additionally expected to increase prices on some sodas and has warned some retailers of the upcoming price hikes, according to people familiar with the matter.PepsiCo declined to comment specifically on price increases impacting dips and soda, but said it was balancing low prices with the company’s long-term finances.Other food companies, including Campbell’s Co. and Conagra Brands Inc., have said they are raising prices in the face of a sustained increase in energy and fertilizer costs, as well as tariffs on imports. Earlier this month, the U.S. Bureau of Labor Statistics reported the consumer price index rose 0.4 per cent in August, adding to concerns that inflation isn’t abating.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Retailers ultimately decide how much of a company’s price increases they want to absorb and when, weighing a range of factors including market competition and consumer demand. Kroger Co. has stopped selling Red Bull energy drinks and Boar’s Head deli items at many stores because the grocery chain isn’t accepting their price hikes.Laguarta said in February that the company negotiated double-digit increases in shelf space at stores along with the price cuts.We apologize, but this video has failed to load.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. 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