PepsiCo to cut prices on Lay’s, Doritos as consumers push back

PepsiCo will cut prices on core brands such as Lay’s and Doritos by up to 15 per cent following consumer backlash against several previous price hikes, the snacks and beverage maker said on Tuesday.

The move is the result of an “extensive consumer feedback around affordability limitations” in the second half of 2025, the company said after reporting fourth-quarter results that topped market expectations.

“We’ve spent the past year listening closely to consumers, and they’ve told us they’re feeling the strain,” said Rachel Ferdinando, CEO of PepsiCo Foods U.S. The new prices will be on shelves this week.

Like other consumer-facing companies such as P&G and Coca-Cola, PepsiCo has been planning to lower entry price points as U.S. consumers struggle with inflation and challenges such as the government shutdown last year that delayed access to food stamp benefits.

The company is also in the middle of an aggressive strategy to cut costs across its business after pressure from activist investor Elliott Management, and several quarters of weak sales in the key North America market.

As part of its review announced in December, PepsiCo is planning to reduce the number of products it offers by roughly 20 per cent in the U.S. this year. It has also shut some manufacturing plants for the snacks division and cut jobs to trim costs.

The company on Tuesday stuck to the annual forecasts of core earnings per share growth of five per cent to seven per cent that it provided in December. Its shares were down about one per cent in premarket trading. They fell about five per cent in 2025 and have lagged rival Coca-Cola over the last five years.

For consumers looking for cheaper options, Coca-Cola has introduced mini 7.5-ounce single-serve cans of some of its sodas in U.S. convenience stores, priced around $1.29.

Packaged food companies are also contending with a rapid rise in private label brands as major grocers and retailers such as Kroger and Walmart invest in their in-house products to attract budget-conscious consumers.

PepsiCo has invested in rebranding key products such as Lay’s and Tostitos chips to suit consumer preference for cleaner ingredients amid increased use of weight-loss drugs and the Trump administration-backed Make America Healthy Again movement.

“Recent initiatives from activist make sense to us and believe changes need to be made for the long-term health of the business. However, we see most corrective actions as likely causing EPS dilution in the near term,” said Nik Modi, analyst at RBC Capital Markets.

Volumes in the key North America food business fell 1% in the fourth quarter, following a four per cent drop in the prior three months.

Its beverages business in North America is undergoing a facelift with its prebiotic soda offering, as well as low- and zero-sugar beverages.

The Gatorade maker reported revenue of US$29.34 billion for the three months ended December 27, beating estimates of $28.97 billion, according to data compiled by LSEG. Its quarterly core earnings per share of $2.26 edged past estimates of $2.24.

(Reporting by Juveria Tabassum in Bengaluru; Editing by Arun Koyyur)