PepsiCo said Thursday it will raise prices on some chips and drinks — including Doritos, Ruffles, SunChips and certain soda brands — by a low-to-mid single-digit percentage, with the increases expected to take effect by the end of 2026 or early 2027. The move marks a sharp reversal: in February, the company slashed prices on Lay's, Doritos, Cheetos and Tostitos by up to 15% to win back inflation-battered consumers.
CEO Ramon Laguarta said the February cuts did bring back some customers, but third-quarter earnings in the North America division came in weaker than expected, and the turnaround is taking longer than hoped. Frito-Lay snack volumes were flat versus a year ago, while beverage volumes slipped 2%. "We don't feel good about the beverage business," Laguarta said on a Thursday conference call, conceding that the company's sodas — including flagship Pepsi — had fizzled against competitors.
The company said it needs higher prices to offset rising costs for fuel, aluminum and agricultural supplies, which it attributed to the Iran war and tariffs. Even after the increases, prices will still sit below where they were before the February cuts. PepsiCo also plans to cut costs and redirect the savings into Poppi, the probiotic soda brand it acquired last year, plus Mountain Dew and Pepsi.
According to the Financial Post, some dips have already gotten pricier: at Dollar General, an extra-large Tostitos salsa jar rose to $4 from $3.80, an extra-extra-large jar to $5.50 from $4.95, and Fritos canned dips to $3.75 from $3.30. The company has also warned some retailers about the coming increases.
Analysts note the soda slump isn't just about competition: the rise of weight-loss drugs and a wider field of soda alternatives are also siphoning off drinkers. PepsiCo shares are down nearly 10% this year. For shoppers, the practical takeaway is simple: if Doritos and Lay's are staples in your cart, stocking up before year-end could save money.
The February cuts were pitched as a long-term commitment, not a short-term promotion. "This isn't a short-term price reduction — it's a long-term commitment to providing more value to consumers," the company said at the time, and Laguarta later credited the move with winning double-digit increases in shelf space at stores. But the sales never came back: North American food volumes fell 2 percent in the second quarter and were negative all year. In July, Laguarta said shoppers were under more strain than expected because of higher gas prices. Eight months later, the affordability pledge is giving way to the price hikes investors wanted.