PepsiCo hikes prices by double digits for the 7th consecutive quarter and profits jump 14%

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PepsiCo’s revenue rose 7% in the third quarter despite lower demand as the company continued to hike prices

Price hikes lifted PepsiCo's profits in the third quarter, but the company says those increases are likely to moderate in the coming year.

Pepsi raised prices 11% in the July-September period, the seventh straight quarter that the Purchase, New York, company has increased prices by double-digits. The higher prices took a toll on demand, with sales volumes down 2.5%.

PepsiCo said some of that volume decline is strategic. The company said it has been shrinking package sizes to meet consumer demand for convenience and portion control.

“Units are growing much faster than volume,” PepsiCo Chairman and CEO Ramon Laguarta said Tuesday in a conference call with investors.

But there is also some consumer pushback on prices. Consumers are looking for value and, in some cases, are trading down to cheaper stores.

“I do think that we see the consumer right now being more selective,” PepsiCo's Chief Financial Officer Hugh Johnston said Tuesday on a conference call with investors.

Still, Johnston said convenience store sales and food service sales __ which usually weaken in times of high consumer stress __ are strong.

Johnston said Pepsi continues to see higher prices for commodities like grain and cooking oil. In 2024, Pepsi expects inflation to be slightly higher than the 2% to 3% it was accustomed to before the pandemic. Consumers should expect to see price increases roughly in line with inflation, he said.

Pepsi is watching the growing use of weight loss drugs like Ozempic, but so far their impact on the business has been negligible, Laguarta said. They could could be outweighed by other trends, including rising incomes in