PepsiCo's price hikes lead to a decline in sales and displeasure among retail chains
9:05 AM EST, February 11, 2024
In 2023, the company, which owns several brands, including Pepsi, Lay’s, Cheetos, Star, and Doritos, raised its prices by 13 percent. This was slightly lower than the 16 percent increase implemented in 2022.
In the United States, these price increases have resulted in a lower demand for the company's products. This has ultimately caused a decrease in PepsiCo's revenues. The decline was notably seen in the fourth quarter of 2023 when revenues dipped by 0.5 percent to $27.85 billion. Reuters said this was the first decline the company experienced in 14 quarters. Consequently, PepsiCo is expecting a slowdown in its organic revenue growth 2024.
The corporation's price hikes are not well-received among retail chains
On the other hand, Europe also saw a decline in PepsiCo product sales, falling by approximately 1 percent. In fact, for 2023, the company's beverage volume sales decreased by 3 percent.
Retail chains were not in favor of the price increases either. At the start of this year, PepsiCo products were pulled off the shelves at Carrefour stores due to a disagreement over product pricing. French media outlets reported that PepsiCo proposed a price rise of about 7 percent, which Carrefour declined.
PepsiCo operates in over 200 countries worldwide and boasts a product portfolio where each brand generates annual retail sales exceeding $1 billion.
