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More big US packaged food groups are resorting to price cuts in a bid to coax frugal consumers back to supermarket aisles after years of inflation.\u00a0<\/p>\n
PepsiCo, Kraft Heinz and General Mills are among the producers of grocery staples to have introduced or extended lower prices as sales volumes stagnate for their food brands.\u00a0<\/p>\n
The success of upstart brands, the growth of store brands, the effects of anti-obesity medicines and declining popularity of processed foods are factors weighing on sales.\u00a0<\/p>\n
Adding to their problems are consumers who are spending less in response to grocery prices that have risen 26 per cent in the past five years, according to the Bureau of Labor Statistics, along with new restrictions on US government food subsidies.\u00a0<\/p>\n
New efforts to lower prices were a recurring topic at a consumer industry conference this week where analysts quizzed chief executives and sampled their snacks. <\/p>\n
\u201cWe are seeing many US packaged food companies lean on price cuts more aggressively with the hope of driving volume growth,\u201d said Max Gumport, US packaged food analyst at BNP Paribas, who was among those at the Consumer Analyst Group of New York conference held in Florida.\u00a0<\/p>\n
Food companies unrelentingly raised prices in 2021 and 2022 amid shortfalls in raw materials and labour. Some have continued to do so as a way to offset the costs of inflation and US tariffs, Gumport said.\u00a0<\/p>\n
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But others are taking the rare step of rolling back prices.\u00a0<\/p>\n
PepsiCo, whose foods business includes Doritos and Lay\u2019s crisps, plans to make \u201csurgical\u201d<\/a> price reductions of up to 15 per cent for certain snacks to restore sales volumes that declined by 2 per cent in North America last year.\u00a0<\/p>\n Ramon Laguarta, PepsiCo chief executive, said that the \u201cconsumer clearly is telling us it was the right thing to do\u201d. Retailers will be giving the company\u2019s snacks more shelf space in the centre aisles and periphery of stores early this year to accommodate an expected sales boost, he said.\u00a0<\/p>\n Kraft Heinz will cut prices for smaller package sizes in about 40 per cent of its US product portfolio, Andre Maciel, chief financial officer, told the conference. <\/p>\n Volumes have fallen for five years at the company known for its ketchup and macaroni and cheese, and new chief executive Steve Cahillane has acknowledged prices had become \u201cunfriendly to consumers<\/a>\u201d.\u00a0<\/p>\n General Mills, the maker of Cheerios breakfast cereal and Pillsbury dough, extended price cuts last year to cover two-thirds of its North American portfolio. Executives at the conference said the reductions were helping to kick-start volumes.\u00a0<\/p>\n But lower prices are also causing pain: General Mills this week cut guidance for sales and profits in its fiscal year. Jeff Harmening, chief executive, said that without price cuts, sales would have been the same or slightly worse, but \u201cvolume would have been a lot worse\u201d.\u00a0<\/p>\n Lower prices for packaged foods would help cool off grocery inflation, but the category is only one part of the shopping basket. <\/p>\n Prices for ground beef were up 17 per cent year on year in January and coffee was up 18 per cent. Eggs \u2014 whose price rises became a refrain in Donald Trump\u2019s 2024 campaign for the presidency \u2014 have declined by about a third.\u00a0<\/p>\n![\"Line](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2026\/02\/https:\/\/d6c748xw2pzm8.cloudfront.net\/prod\/4769bb20-0e9a-11f1-b710-01128f9fe8c6-standard.png\")
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