PepsiCo to cut prices of Lay's, Doritos as consumers push back

Shares of PepsiCo rose Tuesday, February 3, after the company said it will cut prices by up to 15% on core brands such as Lay's and Doritos starting this week.

The move comes after a consumer backlash against several previous price hikes, with the CEO of Pepsi's US Foods division saying its customers are "feeling the strain."

Rival Coca-Cola and consumer giant Procter & Gamble have also lowered prices to safeguard market share amid still-elevated inflation and delayed food stamp benefits for lower-income

families.

Packaged food companies are also in for a reckoning this year as the popularity of appetite suppressing weight-loss drugs increases and brands look for ways to keep consumers interested in snacks and sodas.

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Pepsi's CEO said that portion control was the way to keep PepsiCo's categories relevant, adding that more than 70% of the company's US food product line was in single-serve packages, a strategy he said was "critical" for growth.

The company is also refreshing key brands such as Quaker, Gatorade and Tostitos to focus on low sugar or no-artificial-ingredients to attract younger households with children.

Meanwhile, Pepsi is in the midst of an aggressive cost-cutting plan across its entire business after pressure from activist investor Elliott Management, and several quarters of weak sales in the key North America market.