Across the U.S. food industry, major brands are seeing shoppers become more selective about small extras at the store. PepsiCo put numbers to that trend in its second-quarter results, showing weaker demand in North America for some of its best-known drinks and snacks. The company said tighter household budgets and high gas prices are changing what people pick up at convenience stores and gas stations.
PepsiCo reports slower North American snack and drink sales
PepsiCo said second-quarter revenue rose 6.4% to $24.2 billion, but its North American business was softer, according to the company’s quarterly results. Beverage volumes in North America fell 4%, while snack volumes were flat in the quarter. The company’s U.S. portfolio includes Pepsi, Gatorade, Mountain Dew, Doritos, Lay’s, Cheetos, Tostitos and Quaker.
The company also said it had already lowered prices on some North American snack brands earlier in the year. PepsiCo said products including Lay’s, Doritos, Tostitos and Cheetos saw price cuts of as much as 15%. Those lower prices helped snack demand in the first quarter, but the company said that momentum faded in the second quarter.
Reuters reported that PepsiCo’s North American food sales dropped 2% in the quarter as the company accepted lower effective pricing to appeal to value-conscious shoppers. PepsiCo reaffirmed its full-year 2026 guidance and confirmed a 54th consecutive annual dividend increase. Shares still fell after the earnings report, reflecting investor concern about the North American slowdown.
What the pullback looks like across the U.S.
PepsiCo described the weakness as a North American issue rather than a broad global slowdown. The company did not release a state-by-state or city-level breakdown of where beverage and snack demand was weakest. It also has not released a detailed list of retailers or convenience chains that saw the largest drop in impulse purchases.
What is confirmed is that executives tied the slowdown to softer traffic in convenience and gas channels across the U.S. CEO Ramon Laguarta said the U.S. consumer was weaker than expected, and CFO Steve Schmitt also pointed to reduced impulse buying. Those comments matter because convenience stores and gas stations are major outlets for single-serve sodas, sports drinks and grab-and-go chips.
International results were stronger and helped offset the U.S. pressure. PepsiCo said organic volume outside North America grew at its fastest pace since 2022, with revenue gains across Asia Pacific, Europe, the Middle East, Africa and Latin America. That contrast showed the company’s demand problem was centered more heavily in the U.S. consumer environment.
Higher everyday costs are changing impulse buying
PepsiCo executives said higher everyday costs are the main reason shoppers are buying fewer extras. Laguarta said gas prices hurt demand more than the company expected, and the source material noted gas reached a four-year high of $4.56 a gallon in late May. Company leadership said that pressure hit convenience and gas-station purchases especially hard.
The company’s recent price cuts did not fully solve the issue. Reuters reported that lower effective pricing weighed on North American food sales even as PepsiCo tried to bring budget-conscious shoppers back. That suggests cheaper chips alone were not enough to overcome spending pressure tied to groceries, rent, fuel and other household bills.
For shoppers, PepsiCo said it is responding with smaller pack sizes, meal bundles and newer products aimed at changing demand. The company is also pushing items such as Gatorade Lower Sugar, Doritos Protein, Propel powder and Quaker Protein Rice Crisps. For now, the company’s own results show many Americans are thinking harder before adding an extra soda or bag of chips to the cart.
