“Price-conscious” consumers reduce their snack consumption

PepsiCoThe company’s snack sales declined last quarter as consumers remained cautious.

The food and beverage giant released its second quarter figures Merits Results on Thursday (July 11) showed sales growth of 1.9%, down from 13% in the same quarter last year.

In a comment released ahead of the company’s earnings call, CEO Ramon Laguarta said PepsiCos Quaker Foods Business in North America was “significantly impacted” by product recalls during the quarter.

Frito Lay There was a slight decline in organic sales in North America, he noted, adding that the business had performed well overall in recent years following “significant” investments in brand, capacity, go-to-market and supply chain.

“However, the impact of persistent inflationary pressures and higher borrowing costs in recent years has led to a tightening of household financial conditions,” Laguarta said in the commentary. “As a result, many food categories, including snacks, have been subdued year to date, and consumers have become more price-conscious in their spending habits and preferences for brands, packaging and channels.”

According to the PYMNTS Intelligence report, consumers are struggling with high prices in almost every grocery department.The online features that drive consumers to shop with brands, retailers or marketplaces.”

23% of consumers who shopped for groceries in the past month said that higher prices than other retailers were the biggest problem or challenge.

“This proportion is higher than those who said the same thing in any other industry, and higher than those who said the same thing about other purchasing difficulties. Groceries,” PYMNTS wrote last week.

There may be some relief for shoppers as brands and retailers of food and packaged goods offer more Discounts after years of price increases.

Data from NielsenIQ showed that 28.6% of products were sold as part of special offers, up from 25.1% three years ago, as the power of manufacturers and retailers to raise prices has diminished somewhat.

“Consumers vote with their wallets,” said Carman Allison, vice president at NielsenIQ. “If your price increases too much, consumers will often Change brands. You will change stores.”

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