PepsiCo to cut Doritos, Lay’s prices as much as 15% to boost demand

PepsiCo Inc. is cutting prices by as much as 15% for key brands, including Lay’s and Doritos, in a bid to lift sales by offering more affordable products.

The New York-based snacks and beverage company said reductions on suggested retail prices for marquee items are rolling out this week ahead of Sunday’s Super Bowl, while keeping sizes the same.

“We’ve spent the past year listening closely to consumers, and they’ve told us they’re feeling the strain,” Rachel Ferdinando, chief executive of PepsiCo Foods U.S., said in a statement. The company had said in December it planned to reduce prices on key brands.

Shares of PepsiCo closed up 4.9% on Tuesday. The stock had gained 8.1% this year through Monday’s close, outpacing the 1.9% increase in the S&P 500.

PepsiCo has struggled to grow its sales in North America in recent years. The company, like many of its peers in the food space, raised prices during the pandemic and its aftermath to offset high inflation. Now those increases are colliding with a stretched consumer, weighing on demand. Other food companies, including General Mills Inc., have taken steps to lower prices recently.

The company has also been pressured by Elliott Management Investment, which took a $4 billion stake in the company last year, to revamp its product lineup and make key brands more affordable. The soda maker reached an agreement to do just that with the investor in December, pledging to reduce its U.S. product lineup and cut some prices.

PepsiCo chief executive Ramon Laguarta said on a call with analysts that the cuts would be “surgical” and designed to target places where high prices have caused middle and low-income consumers to pare back their purchases. Laguarta said the company would also be gaining shelf space at grocery stores as its products became more affordable and sales volume increased.

The company said in prepared remarks that the lower prices would be offset by accelerated cost-reduction efforts, reducing head count, closing three plants, and consolidating several manufacturing lines, with “additional actions planned for the near future.” PepsiCo said it would pare down its product portfolio by 20% in the first half of this year.

It’s also hoping to attract more consumers by beefing up its offerings of healthier, “clean label” products made with lower sugar and more protein and fiber. The company already overhauled its Lay’s potato chips packaging, to be followed later by its Tostitos and Quaker brands. It plans to revamp its Gatorade sports drink brand, too, including introducing a low-sugar version with no artificial colors or flavors.

Laguarta said the company would make permanent its “NKD” artificial color-free versions of some Doritos and Cheetos.

On Tuesday, the company also reported better-than-expected fourth-quarter profit, buoyed by strong international demand, and announced a $10 billion share buyback program through February 2030. It reaffirmed its fiscal year 2026 guidance from December, saying it expected organic revenue to increase between 2% and 4%.