Lay's, Doritos, Cheetos and more to see price cuts of up to 15%
Adjustments made ahead of Super Bowl amid inflation pressure...impact of Wegovy also in play
PepsiCo, the U.S.-based global food and beverage company, has decided to cut prices on major snack products by up to 15%. The move is seen as an attempt to spur a recovery in demand ahead of major sports events, at a time when consumers are feeling a heavier burden from rising living costs.
According to the Wall Street Journal (WSJ) and other foreign media on the 3rd (local time), PepsiCo announced that it plans to reduce prices by up to 15% on some of its snack products, including its potato chip brand Lay's, as well as Doritos and Cheetos.
The price cuts were announced ahead of the Super Bowl, when snack consumption typically surges. The company explained that even after the price reduction, package sizes, ingredients, and flavors will remain the same as before. However, the final retail prices for consumers will be set by each retailer.
The key factor behind the price adjustment is what is known as "affordability," or consumers' capacity to bear expenses. Ramon Laguarta, Chief Executive Officer (CEO) of PepsiCo, pointed to this price burden as the biggest reason low-income and middle-class consumers are hesitating to make purchases.
Rachel Ferdinando, CEO of PepsiCo Foods North America, also said in a statement, "We have been listening to consumers' voices over the past year," adding that "consumers have said they are feeling economic pressure."
The WSJ reported that PepsiCo moved to adjust prices after a series of consumer emails complained that its products were too expensive. It added that continued price hikes on many items by food companies since the COVID-19 pandemic have further fueled consumer backlash.
In addition, the spread of obesity treatments is also cited as a pressure factor for the food industry. As the use of weight-loss drugs with appetite-suppressing effects increases, analysts say that maintaining demand for snacks and carbonated drinks has become a major challenge.
The BBC in the United Kingdom reported that as GLP-1 obesity drugs such as Wegovy and Ozempic gain popularity, food companies are working to develop strategies to respond to changing consumer eating habits.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
