PepsiCo plans price hikes on some chips and sodas, Bloomberg News reports

PepsiCo is considering price increases for certain chips and sodas, according to Bloomberg News. The company aims to align its pricing with inflation, amid challenges such as navigating shifting consumer preferences towards healthier snacking, weak demand from households facing higher fuel prices and increased commodity costs. In February, PepsiCo reduced prices by up to 15% on some products, including Lay’s and Doritos, following customer backlash against multiple rounds of previous price hikes.

The upcoming price adjustments, expected by the end of the year or early 2027, will be lower than before the earlier cuts and will be implemented in the low- to mid-single-digit percentage range, in line with inflation. Products like grocery-sized bags of chips from brands such as Doritos and Ruffles, as well as some sodas, are slated to see price increases.

This move comes as activist investor Elliott Investment Management, which holds a significant stake in PepsiCo, has been urging the company to rejuvenate its soda business, boost its share price, and explore selling non-core food assets. PepsiCo's shares have declined nearly 10% this year, with a further 1% dip in morning trading.

The company faces rising packaging and logistics costs due to ongoing tensions in the Iran war that have kept oil prices high. PepsiCo also warned of higher commodity costs in the second half of the year and reported a 2% drop in second-quarter sales in its North American food business, though it maintained its annual forecast. Despite the price cuts and CEO Ramon Laguarta's efforts to review the North America supply chain, volumes in PepsiCo's North American business have been negative throughout the year.