Fans of snacks like Lay’s and Doritos may soon notice slightly higher prices at convenience stores and checkout aisles.
PepsiCo confirmed it plans to raise prices on selected single-serve chip bags beginning in late June, according to NBC News and Bloomberg. The increases are expected to range from about 10 to 20 cents per bag.
The move comes just months after PepsiCo announced major price cuts on many of its larger 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 said it would lower prices on some products by up to nearly 15%.
According to Bloomberg, some single-serve chip bags currently retail for about $2.69, while smaller bags often sold in multi-buy promotions are also expected to increase in price.
Here’s what to know about the expected price increase on some people’s favorite chips.
Higher Costs Driving the Increases
PepsiCo said the upcoming price hikes are tied to rising production, distribution and retail costs in the United States, per NBC News and Bloomberg.
The company added that its affordability strategy remains intact despite the increases.
“Our commitment to affordability hasn’t changed,” PepsiCo Foods U.S. told NBC News, adding the company has “held the line” on prices for its smallest chip bags for nearly 15 years.
Earlier this year, PepsiCo framed its larger-bag price reductions as a long-term strategy rather than a temporary promotion. “We’ve spent the past year listening closely to consumers, and they’ve told us they’re feeling the strain,” PepsiCo Foods U.S. CEO Rachel Ferdinando said in a previous statement shared with USA TODAY.
At the time, PepsiCo said its products would remain the same size, quality and taste despite lower prices, while also emphasizing consumers should not have to choose between affordability and convenience.
Larger Snack Bags Helped Boost Sales
The smaller-bag price increases follow months of lower prices on larger snack bags sold in grocery stores.
PepsiCo previously told USA TODAY it lowered the recommended everyday price of an 8-ounce bag of Lay’s Classic Potato Chips from $4.99 to $4.29 and dropped the suggested price of 8.5-ounce bags of Doritos from $6.29 to $5.49.
During PepsiCo’s earnings call in April, Chief Financial Officer Stephen Schmitt said the company was “investing in value,” while CEO Ramon Laguarta said lower prices on larger snacks were helping bring shoppers back to the category.
According to NBC News, PepsiCo cut prices on many larger take-home snack bags by up to 15% this year. Those price reductions helped drive nearly 9% revenue growth in the company’s latest quarter.
Bloomberg also reported PepsiCo topped Wall Street expectations earlier this year, helped in part by those snack price cuts. The company has also been reshaping its snack business, with plans to reduce its U.S. product line by nearly 20% while introducing products such as Doritos Protein chips and versions of Lay’s and Baked Lay’s cooked with avocado oil or olive oil.
