Faced with revenue and unit sales declines in recent months, snack giants PepsiCo and Conagra confront the reality of “value-seeking behavior.”
Grocery inflation is slowing, and the companies that make the food are starting to sweat.
As part of their quarterly earnings reports Thursday, snack powerhouses PepsiCo and Conagra Brands reported lower revenue and unit sales, pointing to cost-conscious consumers pushing back on prices. And government data reflects the trend: the Bureau of Labor Statistics reported that food prices rose only slightly last month.
“We’re seeing consumers be very price sensitive,” said Bobby Gibbs, a partner in the retail and consumer goods division of the 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.”