Fans of snacks like Lays and Doritos may soon see slightly higher prices in convenience stores and checkout aisles.
According to NBC News and Bloomberg, PepsiCo has confirmed that it plans to raise the prices of select single-serve chip bags starting in late June. The increase is expected to be about 10 to 20 cents per bag.
The move comes just months after PepsiCo announced major price cuts on several of its major snack products, including Lay’s, Doritos, Cheetos and Tostitos, as part of an effort to win back cost-conscious shoppers and improve North American sales. Earlier this year, the company had said it would reduce prices of some products by about 15%.
According to Bloomberg, some single-serve chip bags are currently retailing for around $2.69, while the price of smaller bags often sold in multi-buy promotions is also expected to increase.
Here’s what to know about expected price increases on some people’s favorite chips.
increasing due to high costs
According to NBC News and Bloomberg, PepsiCo said the upcoming price increase is tied to rising production, distribution and retail costs in the United States.
The company said that despite the increase, its affordability strategy remains intact.
“Our commitment to affordability has not changed,” PepsiCo Foods US told NBC News. He said the company has “held the line” on its smallest chip bag prices for nearly 15 years.
Earlier this year, PepsiCo framed the massive price cuts as a long-term strategy rather than a temporary promotion. “We’ve spent the last year listening closely to consumers, and they tell us they’re feeling stressed,” Rachel Ferdinando, U.S. CEO of PepsiCo Foods, said in a previous statement shared with USA TODAY.
At the time, PepsiCo said that its products would remain the same size, quality and taste despite the lower prices, while also emphasizing that consumers should not have to choose between affordability and convenience.
Bigger snack bags helped boost sales
The increase in prices for smaller bags comes after several months of decline in prices for larger snack bags sold in grocery stores.
PepsiCo previously told USA TODAY that it has reduced the recommended daily price of an 8-ounce bag of Lay’s Classic Potato Chips from $4.99 to $4.29 and the recommended daily price of an 8.5-ounce bag of Doritos from $6.29 to $5.49.
During PepsiCo’s earnings call in April, Chief Financial Officer Stephen Schmidt said the company was “investing in value,” while CEO Ramon Laguarta said lower prices on larger snacks were helping draw shoppers back to the category.
According to NBC News, PepsiCo has cut the prices of several large take-home snack bags by up to 15% this year. Those price cuts helped drive nearly 9% revenue growth in the company’s latest quarter.
Bloomberg also reported that PepsiCo topped Wall Street’s expectations earlier this year, helped in part by a cut in snack prices. The company is also reshaping its snack business, with plans to reduce its U.S. product line by about 20% while introducing products like Doritos protein chips and Lays cooked with avocado oil or olive oil and Baked Lays.