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Doritos Hit $7 a Bag, and It Cost PepsiCo Billions
The company is rolling back some snack prices by up to 15% after Frito-Lay missed revenue targets for two years and lost shelf space.
- In February, PepsiCo announced price cuts of up to 15% on salty snacks, focusing on larger, better-value bag sizes for Doritos and Cheetos after Frito-Lay missed internal revenue targets by over $1 billion for two consecutive years.
- Frito-Lay's revenue had risen for 53 consecutive quarters before turning negative in 2024, driven by aggressive price hikes that pushed some chips above $7 and raised Doritos prices nearly 50% from 2021 at Walmart, according to Attain consumer spending data.
- Activist investor Elliott Investment Management took a $4 billion stake in September demanding more affordable products, while Walmart cut shelf space for Frito-Lay, redirecting room to lower-cost store brands and rivals like Takis.
- By agreeing to lower prices, PepsiCo secured a double-digit increase in shelf space at Walmart, Costco and Target, with placements expected in full force by the end of April, Laguarta said.
- As the Iran war sends oil prices soaring, higher packaging and food costs could pressure margins; PepsiCo's stock has fallen nearly 22% from its May 2023 peak of $196 to $153 as of Tuesday.
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16 Articles
16 Articles
Aggressive snack pricing backfired for PepsiCo, leading to revenue losses and pressure on Frito-Lay sales
Coverage Details
Total News Sources16
Leaning Left3Leaning Right5Center4Last UpdatedBias Distribution42% Right
Bias Distribution
- 42% of the sources lean Right
42% Right
L 25%
C 33%
R 42%
Factuality
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