PepsiCo quarterly revenue disappoints on slowing sales of snacks, beverages

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FE Team | Published: July 13, 2024 22:11:10

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PepsiCo missed expectations for second-quarter revenue on Thursday as a series of price hikes and competition from private-label brands slowed sales of its snacks and soda mainly in the United States, its largest market, reports Reuters.
Analysts have said that product prices, which are starting to normalize after nearly two years of multiple hikes, are still higher than pre-pandemic levels, giving packaged-food companies such as PepsiCo little room to raise prices as volumes shrink.
PepsiCo raised average product prices by 5 per cent for the quarter ended June 15, in line with the first quarter. However, overall organic volumes slipped 3 per cent in the reported period.
Company executives said year-to-date performance across many food categories, including snacks, was subdued as consumers had become more value-conscious while spending.
"Throughout we are seeing much more price sensitivity and consumers looking for more value across all income groups. Now that is something that we have to take into consideration," Pepsico CEO Ramon Laguarta told Reuters.
He also said the company had been stepping up productivity and cannot continue to price up.
PepsiCo is adding new flavors to its brands such as Lay's, Doritos and Cheetos to suit various consumer preferences.