Topline
PepsiCo will cut costs and drop prices for some products, according to a statement, becoming the latest company to tune down prices as its food business lags and affordability concerns increase among Americans.
Key Facts
PepsiCo, the maker of Lay’s, Doritos and Pepsi-Cola, plans to completely eliminate nearly 20% of its products in the U.S. by early next year.
The company did not specify which remaining products would have reduced prices, saying it plans a “targeted approach” to achieve “sharper everyday value.”
PepsiCo’s North American supply chain will also be reviewed as part of the initiative, according to the statement, which said the changes aim to “accelerate organic revenue growth, deliver record productivity savings and improve core operating margin – starting in 2026.”
The company said that in its push to reduce operating costs, it has closed three manufacturing plants and shuttered “several manufacturing lines this year.”
Consumer sentiment increased to 53.3 in December, a more than two-point jump from November—but the figure is not far from the all-time low in consumer sentiment set in 2022.
Any value of consumer sentiment below 100 indicates growing economic pessimism.
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Key Background
PepsiCo is the latest company to respond to poor consumer sentiment and affordability concerns among Americans, 46% of whom in a Politico poll said the cost of living in the U.S. is the worst they can ever remember it being. Facing weakened consumer demand like PepsiCo, Target recently announced price reductions on 3,000 food, beverage and essential items. Target reported a 2.7% drop in sales in its latest quarter amid a 1.5% slide in revenue.
