You know the saying “penny wise, pound foolish”? Well, this news is kind of like that, only more “Dorito wise, entire Frito-Lay corporation foolish.” Mega chip conglomerate Frito-Lay — purveyors of classic brands such as Cheetos, Lay’s, Ruffles, and the aforementioned Doritos — is owned by parent company PepsiCo (you know what product they make). Funny story, retailers have been telling PepsiCo for years that they’re charging way too much for their chips — $7 for a 14.5-ounce bag?!?! — only PepsiCo wouldn’t listen, so retailers did what they had to do and started ordering less Frito-Lay product to store on their shelves. But finally, this year PepsiCo said it would slash prices. Why now? Were they visited by the ghosts of chip bags past? Haha, no. The numbers are in and showed that the insistence on higher chip bag prices has cost PepsiCo & Frito-Lay BILLIONS of dollars in lost sales, womp womp.
The company announced in February that it would cut prices on some of its best-selling junk food after years of hikes that pushed costs up nearly 50% since 2021, according to data cited by Bloomberg News.
But the move came only after PepsiCo had already missed internal revenue targets by more than $1 billion for two straight years — even as retailers such as Walmart warned that sales were slipping, the report said.
Executives had been debating price cuts internally since at least 2024 as sales at its Frito-Lay division slid — but resisted taking the short-term hit to revenue, according to the report.
As executives stalled, retailers like Walmart began cutting shelf space for Frito-Lay products in favor of cheaper alternatives, squeezing sales even further, the report said.
By the time PepsiCo finally moved to cut prices, the damage was already done, with sales and market share already under pressure, the report said.
Instead of cutting prices, PepsiCo leaned on promotions, smaller portions and other tactics to lure shoppers back — but none of it worked, according to the reports.
Government data shows snack prices surged in recent years, with the average cost of a 16-ounce bag of potato chips jumping roughly 27% between 2021 and 2024 — including double-digit increases in 2022 and 2023 before leveling off last year.
But branded snacks appear to have climbed even higher, with some large bags rising close to 50% over the same period and topping $7 at major retailers, according to the report — a price point that ultimately proved too steep for many shoppers.
Frito-Lay had long been PepsiCo’s cash cow, generating steady growth for more than a decade and controlling a dominant share of the US salty snacks market, according to analysts.
That dominance gave the company unusual power — allowing it to push through steep increases during the pandemic as consumers continued to spend.
…Shoppers eventually pushed back, with some balking at paying more than $7 for a bag of chips and cutting back purchases as inflation squeezed household budgets.
By 2024, Frito-Lay’s revenue had turned negative for the first time in more than a decade — a stark reversal for a business that had posted growth for 53 consecutive quarters.
Well whaddya know, the decision that benefitted the customer would’ve benefitted the company, too! Instead, PepsiCola Scrooge “resisted taking the short-term hit to revenue,” and ended up over $1 billion in the red. This’ll go down as the second dumbest decision PepsiCo has made in the last 10 years. And yeah, those lame promotions they tried in place of actually lowering prices were super obvious, like when they shouted 20% MORE CHIPS!, and then the tiny print revealed it was only for “select bonus bags.” We can sniff out when we’re being lied to! For anyone doubting the impact of consumer power, the proof is in the percentages. (No really, NY Post packed a lot of percentage data into this reporting, more than the amount of chips Frito-Lay has been packing into their bags lately.) So let’s keep wielding the power we have; it may take executives a stupidly long time to get there, but eventually they’ll lose a billion dollars and decide to course correct. And they can cry salty tears into the (many) bags of unsold salty potato chips.
Photo of Doritos price from Kroger website. Other photos credit: Beyzanur K. on Pexels
I never buy chips any more because I still remember when the bags were $2.50 for the mega party size (not even a true size any more!). Chips are not a required food for anyone’s diet – they are a treat! The corporate greed continues to astound.
Zoid Most Aldi chips, cereals, crackers and snacks are close to/better than the name brands. Aldi has their version of Lays chips $1.79 for a family sized bag here. I really like them. The jalapeño kettle chips are really good and about $2 a bag. The Millville cereals are better than the General Mills cereals and cost less than half the price. Admittedly, the Aldi version of Doritos is trash, but I will never buy name brands again after how gleefully Pepsi, General Mills, etc exploited consumers during these troubled times after buying the tangerine terror. We desperately need to get these monopolies under control because consumers are being ruthlessly exploited. Most generics are made by the exact same companies that manufacture the namebrands. These mark-ups, especially in food deserts, should be criminal. Many of these foods are also using cheaper ingredients and taste terrible now.
Same. I’ll buy them every once in a while if they are on sale but it’s not a staple in my pantry any longer. The price increase have changed the way I eat.
And how crazy that they spent untold millions on ads and promos instead of lowering prices. They are in their “let them eat cake” era.
I don’t know what the pics of the woman eating doritos are from, but that’s a great choice! They’re illustrating the point of
“If you’re spending $7 on a bag of chips, you’re going to have so little money that you’ll wind up with a beater car that needs tires and doesn’t run”
My family loves Doritos. Loves them. But I haven’t bought a bag in years because of the price. When I do get chips, I buy the $2.99 (or less!) store brands at Aldi and Lidl or get 2 for $6 bags of Utz to support a more local brand. Chips are a treat, not a necessity, and at that price point, a bag of apples is a much better and healthier option (and my kids love fruit). Corporate greed sucks, and I will continue to boycott the brand no matter how much they cut prices.
2nd this & adding the short reel Robert Reich dropped during the height of the pandemic, when the money guys were saying/warning Covid stimulus checks were going to result in inflation.
Rodney McMullen, CEO Kroger: We always knew a little bit of inflation as always good for business. We would expect to be able to pass that through.
[sidebar: Does Mitch McConnell’s wife still have a seat on the board?]
Jamere Jackson, CEO Autozone: As I’ve said before, you know inflation has been a little bit of our friend in terms of what we see in retail pricing
Garth Hankinson, CEO ConstellationBrands: We want to make sure we’re not leaving any pricing on the table… We’ll take as much pricing as the consumer can absorb
Brian Niccol, CEO Chipotle: And we know if we need to take more pricing, we have room to do it. To date, we’ve seen no resistance from our customers.
Michael McGarry, PPG Industries: I’m really pleased our sales teams have gotten much better at pricing than ever in the history of the company. We’re not going to be giving this pricing back. Now, it’s not a matter of ‘Can we take a price increase?’, Now, it’s about ‘How much of a price increase are you going to take?’
https://www.youtube.com/shorts/psYyiu9j1VI
There’s no so much competition for chips and puffs of all different types. Of course,
Frito-Lay may have bought them all as well.
That said, you can get a basic tortilla chip and add spices and whatnot to make it taste similar to Doritos.
And sometimes they are not getting those customers back. I started looking for cheaper chips and found the salt and pepper potato chips at Trader Joe’s. They are my new favorite; it doesn’t matter to me if they now lower the price of Ruffles because I found something I like better.
Trader Joe’s chips are freakin’ amazing! Their “ode to the classic” potato chips are so good–they remind me of how chips used to be “back in the day.” Sooooo much better than Lay’s. Their bags have a good amount of chips in them and the that big bag of plain chips is 2.49 or something like that. Their “organic corn chip dippers” beat Fritos for price and taste.
Lay’s products all taste gross. Like they are an amalgamation of chemicals mashed into a “chip” form. Doritos are small and paper thin and taste so gross now. And Lays are cut so thin they almost disintegrate in your mouth. EW! Trader Joe’s all day, every day.
Y’all you can currently get a free large Big Gulp with the purchase of a single serve Frito Lay snack at 7-11. Fountain Diet Coke ftw.