Finance
PepsiCo to cut prices on Lay's, Doritos as consumers push back
Published by Global Banking and Finance Review
Posted on February 3, 2026
3 min readLast updated: February 3, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on February 3, 2026
3 min readLast updated: February 3, 2026
PepsiCo plans to reduce prices on Lay's and Doritos by up to 15% in response to consumer affordability concerns, as part of broader cost-cutting measures.
By Juveria Tabassum
Feb 3 (Reuters) - PepsiCo would cut the prices of core brands such as Lay's and Doritos in the U.S. by up to 15% after several quarters of price hikes based on consumer feedback on their affordability, the snacks and beverage company said on Tuesday even as its fourth-quarter results topped market expectations.
The latest move comes amid an aggressive strategy by the company 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.
"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.
Like other consumer-facing companies such as P&G and Coca-Cola, PepsiCo too has been planning to lower entry price points as U.S. consumers looked to make their budgets last in the face of inflation and challenges such as the government shutdown last year that delayed access to food stamp benefits.
However, it said the latest move to cut prices on certain packages of brands such as Lay's, Tostitos, Doritos and Cheetos was the result of an "extensive consumer feedback around affordability limitations" in the second half of 2025.
As part of its review announced in December, PepsiCo is also planning to reduce the number of products it offers by roughly 20% 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 stuck to the annual forecasts of core earnings per share growth of 5% to 7% that it provided in December.
Its shares were down about 1% in premarket trading. They fell about 5% in 2025, and have lagged rival Coca-Cola over the last five years.
The company 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.
Volumes in the key North America food business fell 1% in the fourth quarter, following a 4% 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 $29.34 billion for the three months ended December 27, beating estimates of $28.97 billion, according to data compiled by LSEG.
The company reported quarterly core earnings per share of $2.26, edging past estimates of $2.24.
(Reporting by Juveria Tabassum in Bengaluru; Editing by Arun Koyyur)
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power. It is typically measured annually.
A pricing strategy is a method used by businesses to set the prices of their products or services based on market demand, competition, and costs.
Core brands are the main products or services that a company offers, which are central to its identity and revenue generation.
Cost-cutting involves reducing expenses to improve profitability, often through measures like layoffs, reducing production costs, or streamlining operations.
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