PepsiCo's revenue fall: Price hikes bite as customers cut down on beverages and snacks
In the past year, PepsiCo, which owns renowned brands like Pepsi, Lay’s, Cheetos, Star, and Doritos, increased its prices by 13 percent as compared to an increase of 16 percent in the prior year.
Unfortunately, the price increments have resulted in a reduced demand. Specifically in the United States, the recent price hikes have instigated customers to purchase significantly fewer beverages and snacks. Consequently, this has triggered a downward trend in the company's revenues. In the fourth quarter of 2023, revenues fell by 0.5 percent to $27.85 billion, marking the first decline of this nature in 14 quarters, as noted by Reuters. With this downturn, the company is now expecting a drop in organic revenue growth for 2024.
The corporation's price hikes are met with disapproval by retail chains
Concurrently, in Europe, sales of PepsiCo's products saw an approximate decrease of 1 percent. Reflecting on the entire year of 2023, the company reported a drop in beverage volume sales by 3 percent.
The price increases have also elicited adverse reactions from retail chains. Earlier this year, PepsiCo products vanished from Carrefour stores due to disagreements over product prices. According to French media, PepsiCo intended to increase prices by approximately 7 percent, a move not accepted by Carrefour.
PepsiCo operates in more than 200 countries worldwide, with each brand in the company's portfolio generating annual retail sales exceeding $1 billion.
