PepsiCo plans to raise some chip and soda prices after its cuts left snack volume flat

PepsiCo is planning to raise prices on some chips and sodas after price cuts earlier this year failed to lift sales, Bloomberg News reported on Thursday, citing people familiar with the matter. Reuters reported that the increases are planned for the end of this year or early 2027. Earlier in 2026, PepsiCo cut prices by as much as 15% on products including Lay's and Doritos after shoppers pushed back against several rounds of increases. Seeking Alpha said the plans cover chips, dips and soft drinks.

PepsiCo shares were at $128.92 at 11:57 a.m. ET, down 1.0%, according to Nasdaq data. That is just above the stock's 52-week low of $127.98. Its 52-week high is $171.48.

The number behind the number

"Cuts failed to boost sales" is the headline. PepsiCo's quarterly filing for the 12 weeks to June 13 shows how that played out in PepsiCo Foods North America, the unit that sells Frito-Lay snacks in the U.S. and Canada:

PepsiCo's own explanation is plain: revenue fell 2%, "primarily driven by unfavorable net pricing," and "unit volume was even with the prior year." Operating profit fell 3.5%. In other words, the company gave up about two points of price, sold the same amount of product and made less money. A price cut only pays off if extra volume makes up for the lower price, and in that quarter no extra volume showed up.

The rest of PepsiCo looks different. Across the whole company, organic revenue rose 2% in the quarter, with 1 point from volume and 2 points from pricing. The North American snack business was the weak spot, which is why the reversal is happening there.

Who it hits

The people who have to turn a supplier's list price into a shelf price are store owners. CheckThisBiz lists 109,039 independent grocery and convenience stores in the U.S., and chips and soda are standard stock in almost all of them.

For an independent store owner, the question is what to do with the shelf price when the wholesale price goes up. The first half of this year gives some evidence: when PepsiCo cut prices, shoppers did not buy more chips. Shoppers did not respond to lower prices, and it is not clear how they will respond to higher ones. A store that keeps the same percentage markup will charge more per bag. Whether it sells fewer bags is something each owner will see in their own register data within a few weeks of the new prices arriving. That data is a better guide than any national figure.

What we're watching

• The size and timing of the increases. Bloomberg's report was based on people familiar with the matter.
• PepsiCo's next quarterly report, which will show whether North American snack volume moved during the summer.

Sources: Bloomberg News as reported by Reuters; Seeking Alpha; PepsiCo Form 10-Q; Nasdaq; business counts from CheckThisBiz. This is market information, not investment advice.