PepsiCo profits up despite slowing sales [Video]

PepsiCo reported higher-than-expected earnings in the second quarter but acknowledged that after raising prices every quarter for more than two years, customers are not buying as many of its snacks and drinks.

PepsiCo said Thursday that North American demand for its Frito-Lay snacks was “subdued” during the quarter and sales volumes dropped four per cent. Chairman and CEO Ramon Laguarta said the company is seeing customers of all income levels pull back on snack purchases or shift to cheaper store brands.

“In the U.S., there is clearly a consumer that is that is more challenged,” Laguarta said during a conference call with investors. “They want more value to stay with our brands.”

The average U.S. price for a 16-ounce bag of potato chips hit US$6.63 in May, according to data from the U.S. Federal Reserve, up 18 per cent from two years ago.

Laguarta said PepsiCo plans to amp up …