PepsiCo CEO Discusses Impact of Rising Prices

PepsiCo faced revenue shortfalls in the second quarter as price sensitivity affected consumers across all income levels, leading to a 5% price increase to combat inflation and limited wage growth. Both low-income and high-income consumers are adjusting their spending behaviors, with many opting for more affordable options and cutting back on dining out. Despite challenges, CEO Ramon Laguarta remains optimistic, relying on strategic investments in Frito-Lay and cost-cutting measures to navigate the current economic strain. Sales volume for PepsiCo's Frito-Lay North America business declined by 4%, reflecting the impact of consumer pushback on higher prices and shrinking demand for snacks. PepsiCo's revenue fell short of expectations due to weakened demand for snacks and sodas in the U.S., prompting increased marketing efforts and promotions to counter declining volume growth caused by price hikes and consumer preference for cheaper alternatives.