New York
CNN
—
Americans are cutting back on Doritos, Goldfish and Hostess cakes. It’s not for their health, however – it’s a sign that even small indulgences have gotten too expensive for many to afford.
“Consumers are cutting back on non-essentials and stretching the value they get out of every dollar. That’s hitting snacking,” said Chris Costalgi, a vice president at market research firm NIQ, in an interview with CNN. Forty-two percent of consumers say they are buying fewer snacks because of higher prices, according to NIQ’s February survey of 1,000 consumers.
The slowdown is showing up on food giants’ bottom lines. PepsiCo, Campbell and JM Smucker have reported weak sales of their snack brands in earnings announcements in recent weeks.
PepsiCo, the owner of Frito-Lay, said that people bought 3% fewer snacks last quarter. “Salty and savory snack categories underperformed” the broader packaged food industry, PepsiCo said, citing the “cumulative impacts of inflationary pressures and higher borrowing costs on consumer budgets.”
People also stopped buying as many Goldfish crackers and Snyder’s of Hanover pretzels. Campbell, which owns both brands, saw a 2% drop in snacks during its latest quarter, noting that snack sales were “weaker than anticipated.”
And JM Smucker, the owner of Hostess, said people bought 5% fewer snacks during its latest quarter as more “cautious” and “selective” consumers turned away.
Overall, salty snack purchases declined 0.3% during the 52 weeks ending on February 23, according to market research firm Circana. Cookies also dropped 0.3%.
The pullback on snacks comes as shoppers dial back on larger purchases, too, such as airline travel, major home renovation projects and clothing.
Many companies are also noting a consumer slowdown because of inflation fears, President Donald Trump’s tariffs on imported goods and a wobbly stock market.
Spending at US retailers last month was much weaker than expected, in a troubling sign of strain on shoppers. Retail sales rose 0.2% in February from the prior month, the Commerce Department said Monday.
Weak consumer spending figures are adding to concerns that the US economy is slowing – and perhaps heading into a recession.
Snack prices have gone up more rapidly than other store items. While grocery prices have increased 23% since February of 2021, prices for chips have increased 29%, according to the Bureau of Labor Statistics (BLS).
The average price of a 16-ounce bag of potato chips last month was $6.50. In February 2021, the average price was $5.05, according to the BLS.
To cut costs, consumers often switch from pricier big brands like Doritos to private-label brands sold by Walmart, Costco and other retailers.
Shoppers have also balked at companies downsizing bags of chips, cookies and other products while raising prices, a phenomenon widely known as shrinkflation.
Last year, PepsiCo – which owns Lay’s, Doritos, Tostitos and Ruffles – said it would temporarily put more chips in some bags to claw back customers tired of higher prices with skimpier bags. A PepsiCo spokesperson told CNN in October that Tostitos and Ruffles “bonus” bags would contain 20% more chips for the same price as standard bags in select locations.
