Jack Otter and the ‘Barron’s Roundtable’ panelists discuss why Pepsi’s stock was impacted.
PepsiCo said it was increasing the volume of some packets of its chips, after being accused last year of “shrinkflation”, or reducing the size of the product without lowering the price.
In the company’s earnings call last week, PepsiCo CEO Ramon Laguarta said the food and beverage giant would offer bonus packs of Tostitos containing 20% more chips, and would also include two or three more bags of Doritos in multipacks as a way to increase the amount of chips. value for consumers.
PepsiCo said it will increase the volume on some bags of chips to add value to consumers. (Jeffrey Greenberg/Universal Pictures Group via Getty Images / Getty Images)
The move comes after Pepsi reported a surprise revenue decline in the third quarter and cut its annual forecast as North American consumers curbed their spending on sodas and savory snacks, while opting for cheaper private label brands.
‘SHRINKFLATION’ SHOOTS CUSTOMERS AS COMPANIES SEEK TO PROFIT DURING INFLATION SURGE
“The cumulative impact of inflationary pressures and higher borrowing costs over the past several years continues to impact consumer budgets and spending patterns,” Laguarta said.
PepsiCo Lays brand chips are seen for sale at a Dollar General department store in Simpsonville, Kentucky, on August 12, 2021. (Luke Sharrett/Bloomberg via Getty Images / Getty Images)
Pepsi, which owns several snack brands including Frito-Lay, was criticized last year by French supermarket chain Carrefour for reducing volumes of some products while raising prices.
INFLATION CAUSES A DECLINE
Carrefour said a bottle of sugar-free peach-flavoured Lipton Ice Tea, produced by PepsiCo, had shrunk from 1.5 liters to 1.25 liters. Meanwhile, there was an increase in the price per liter of 40%.
| Heart | Security | Final | Change | Change % |
|---|---|---|---|---|
| SPIRIT | PEPSICO INC. | 174.48 | -1.42 |
-0.81% |
PepsiCo, Inc.
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Carrefour added price warnings to several food products in an effort to pressure manufacturers to lower prices.
FOX Business reached out to PepsiCo for comment.
FOX Business and Reuters’ Daniella Genovese contributed to this report.
