PepsiCo is trying to win back customers turned off by “shrinkflation” with a special promotion that offers more potato chips in bags of Lay’s, Doritos, Tostitos and Ruffles.
The company told CNN that “bonus” bags of Tostitos and Ruffles will contain 20% more potato chips for the same price as standard bags in select locations.
PepsiCo, the nation’s largest seller of salty snacks, said that it will also add two more small bags of chips to its 18-bag variety pack.
The move comes as cash-strapped consumers have cut back on buying snacks due to persistently high levels of inflation.
PepsiCo CEO Ramon Laguarta told analysts on an earnings call last week that the company was seeking to take advantage of football season, a time when fans tend to consume more snacks.
“There’s a lot of gatherings,” Laguarta said.
But Edgar Dworsky, founder and editor of Consumer World, said that shoppers shouldn’t get their hopes up.
“The PepsiCo announcement sounds more like a temporary rather than permanent move ahead of the holidays to upsize some of their products,” Dworsky, who has been closely monitoring the “shrinkflation” phenomenon, told The Post.
“By definition, a ‘bonus pack’ offers shoppers something extra compared to the regular size of the product. A new permanent larger size would not be called a bonus pack.”
“Nevertheless, consumers should enjoy getting some extra chips while the promotion lasts.”
A recent Bank of America analysis found that snack sales fell 0.5% in the third quarter of 2024 compared to the same period a year ago while retail snack volumes declined by 1.1%.
PepsiCo snack sales fell 1% last quarter while its snack volumes dipped by 1.5%.
In recent years, snacks have been among the grocery items whose prices have surged due to ongoing inflation.
Last month, the average price of a 16-ounce bag of potato chips was $6.46 — a 28% increase from the $5.02 average price from the same month four years ago, according to the Bureau of Labor Statistics.
Meanwhile, snack makers have pared down the amount of product in their packages while keeping prices either the same or raising them.
“Shrinkflation” has affected other sectors of the economy including health care and retail.
The price per ounce of salty snacks has increased by 36% compared to 2020, according to TD Cowen analyst Robert Moskow.
The 36% increase outpaces the 21% rate at which overall grocery prices have risen during that same period.
Moskow told CNN that PepsiCo’s move to boost the size of its snack packs is likely to prompt competing companies such as General Mills and Mondelez to follow suit.
The Post has sought comment from PepsiCo.
[Notigroup Newsroom in collaboration with other media outlets, with information from the following sources]
