Consumers Refuse High Prices

PepsiCo and Conagra Brands pointed to cost-conscious consumers rejecting high prices as a factor for lower revenue and unit sales during their quarterly earnings reports, reports The Washington Post.

“We’re seeing consumers be very price sensitive,” said Bobby Gibbs, partner at the retail and CPG division of marketing consulting firm Oliver Wyman. “Consumers are cherry-picking promotional prices more and retailers are putting out more promotional pricing than they have in the last few years.”

Although recent Bureau of Labor Statistics data points to a strong economy, the prices of grocery store items are still higher than before the pandemic, up 18 percent since 2020, according to the report.

PepsiCo CEO Ramon Laguarta said that customers are looking for better deals.

“For particular consumers, we need some new entry price points and probably some new promotional kind of mechanics that don’t expect for the consumer to invest so much cash in a purchase of salty [snacks],” said Laguarta on a call with analysts, Thursday. “So, there’s adjustments that we have to make… There is some value to be given back to consumers after three or four years of a lot of inflation.” Full Story (Subscription Required)