‘We don’t feel good’: PepsiCo plans price hike on Doritos, Ruffles, SunChips and sodas after offsetting costs with $178 million tariff refund

PepsiCo plans to raise prices on some snacks and drinks and slash corporate costs after a disappointing performance in North America during the third quarter.

The price hikes, which will hit Doritos, Ruffles, SunChips and some sodas, will be in the single-digit percentage range, and prices will still be lower than they were at the start of this year.

PepsiCo said Thursday that it must raise prices to recoup rising costs for fuel, aluminum and agricultural commodities.

Many companies, including PepsiCo, have offset rising costs this year by using tariff refunds issued by the U.S. government after the Supreme Court struck down President Donald Trump’s far-reaching global tariffs .

PepsiCo used its $178 million refund to do just that during the most recent quarter, but said that money will not be available in coming quarters.

Yet there are risks for U.S. companies that raise prices in the current economic environment, with so many American households already stretched financially.

PepsiCo leaned heavily into price increases to combat inflation in the aftermath of the COVID-19 pandemic.

The company hiked prices by double-digit percentages for eight straight quarters in 2022 and 2023 before settling into more moderate price increases.

Consumers revolted, and sales of PepsiCo’s drinks and Frito-Lay snacks fell.

Last fall, activist investor Elliott Investment Management took a $4 billion stake in the company and began pressing for even lower prices.

PepsiCo agreed , and it slashed prices on Lay’s, Doritos, Cheetos and Tostitos chips by up to 15% before the Super Bowl.

Laguarta said the lower prices have brought back some consumers, but the third-quarter results remained weaker than hoped, partly due to tepid sales in Canada.

Frito-Lay snack food volumes were flat in the July-September period compared with the same period last year.

Beverage volumes fell 2%.