Readers already know the K-shaped economy is not going anywhere, even as the Trump administration attempts to correct the imbalance ahead of the midterms. For the junk-food-hungry U.S. consumer, there was a small win on Tuesday morning.
PepsiCo announced it will cut prices by 15% on snack brands like Lay's and Doritos to restore affordability and help revive sales.
"PepsiCo is taking a meaningful step to lower the price on many of our most loved snacks by up to nearly 15%. This includes iconic favorites like Lay's, Doritos, Cheetos, Tostitos and more," PepsiCo wrote in a statement.
Rachel Ferdinando, CEO, PepsiCo Foods U.S., said her team has spent the "past year listening closely to consumers, and they've told us they're feeling the strain" from elevated processed food prices.
"Lowering the suggested retail price reflects our commitment to help reduce the pressure where we can. Because people shouldn't have to choose between great taste and staying within their budget," Ferdinando said.
The announcement comes just days before the Super Bowl this weekend, as consumers rush to supermarkets to stock up on junk food for the big game, with this year's main event featuring the Seattle Seahawks against the New England Patriots.
We must note, and can't help but wonder, whether activist investor Elliott Investment Management, which built a $4 billion position in the stock and aimed to overhaul PepsiCo toward greater affordability in late 2025, had any say in the latest decision to trim prices ahead of the Super Bowl.
Pepsi shares were marginally higher in premarket trading in New York. Shares remain -20% from their peak, when they nearly topped $200 per share in mid-2023.
Bloomberg noted that PepsiCo has accelerated its cost-reduction efforts, including reducing headcount, closing three plants, and consolidating several manufacturing lines, with "additional actions planned for the near future." It also announced a product portfolio that would be slashed by 20% in the coming months.
It really does seem like Paul Singer's team at Elliott is busy at work with PepsiCo...