PepsiCo will cut costs and lower prices on some products, a statement said, becoming the latest company to cut prices as its food business lags and concerns about affordability rise among Americans.
Key data
PepsiCo, maker of Lay’s, Doritos and Pepsi-Cola, plans to completely eliminate almost 20% of its products in the US by early next year.
The company did not specify which remaining products would have reduced prices, stating that it plans a “targeted approach” to achieve “increased everyday value.”
PepsiCo’s North American supply chain will also be overhauled as part of the initiative, according to the statement, which says the changes seek to “accelerate organic revenue growth, generate record productivity savings and improve core operating margin, beginning in 2026.”
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The company said that in its effort to reduce operating costs, it closed three manufacturing plants and several production lines this year.
Consumer confidence rose to 53.3 in December, an increase of more than two points from November, but the figure is near the all-time low of 2022.
Any consumer confidence value below 100 indicates growing economic pessimism.
Key context
PepsiCo is the latest company to respond to low consumer confidence and affordability concerns among Americans. 46% of whom, according to a Politico survey, stated that the cost of living in the US is the worst they can remember.
Facing weak consumer demand, like PepsiCo, Target recently announced price reductions on 3,000 foods, beverages and essential items. Target reported a 2.7% drop in sales in its latest quarter, amid a 1.5% drop in revenue.
This article was originally published in Forbes US
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