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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 be outweighed by other trends, including rising incomes in many countries and the growing popularity of snacking in place of meals.

Were seeing a lot of tailwinds that will continue to drive our categories, he said.

Pepsi shares were up 1.5% in morning trading.

In the third quarter, Frito-Lay North America sales volumes dropped 0.5% during the July-September period as net prices rose 8%.

North American beverage sales volumes dropped 6% as prices rose 12%.

Sales volumes in Europe were flat. Sales volumes in Latin America dropped 5%.

Net pricing includes price hikes as well as changes in the mix of products sold and smaller package sizes.

In prepared remarks Tuesday, PepsiCo said consumers are gravitating toward smaller packages for convenience and portion control.

Net revenue was $23.4 billion, the company said Tuesday. That was in line with Wall Streets expectations, according to analysts polled by FactSet.

Net income for Pepsi rose 14% to $3.1 billion, or $2.24 per share.

That beat the $2.15 per share that analysts had forecast.

Pepsi now expects its full-year earnings per share to increase 13%, up from previous projections of 12%, due to the strength of its sales and cost-cutting efforts.

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New York lawmaker wants to tax crypto sales and transfers

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New York lawmaker wants to tax crypto sales and transfers

New York lawmaker wants to tax crypto sales and transfers

New York Assemblymember Phil Steck introduced a bill that would see the state tax the sale and transfer of crypto assets.

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Garantex had ‘contingency plans’ last time authorities tried to shut it down

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Garantex had ‘contingency plans’ last time authorities tried to shut it down

Garantex had ‘contingency plans’ last time authorities tried to shut it down

The US government redesignated Garantex on Thursday to its list of sanctioned entities, along with its successor, Grinex, but TRM Labs suggests it may be ineffective.

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Four things we learned from Sir Mel Stride’s Electoral Dysfunction interview

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Four things we learned from Sir Mel Stride's Electoral Dysfunction interview

Since last year’s general election, Sir Mel Stride has become a familiar face for those of us who like our politics.

During the campaign, he regularly found himself on breakfast TV and radio. So much so, Sir Mel was referred to as the “minister for the morning round” by some of our industry colleagues.

By our count, he was on Sky News Breakfast at least 10 times during the campaign’s 43 days.

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Following the election, and losing the Conservative leadership race to Kemi Badenoch, Sir Mel now puts questions to Rachel Reeves as shadow chancellor.

Still seen as a safe pair of hands, Sir Mel’s penchant for doing the “morning round” hasn’t slowed down either, making regular appearances on breakfast TV and radio.

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Luckily, he found some time between all that to sit down for an interview with Sky’s Beth Rigby for the Electoral Dysfunction podcast. He spoke about his transition to Opposition, taking on Reform, and the most controversial topic in Westminster – lunch.

Here’s what we learned:

1. Opposition isn’t ‘awful’ – but it is like ‘warfare’

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‘I think people will see through Reform’s populism’

Before the election, Sir Mel served as work and pensions secretary. Shifting to the Opposition was not “awful”, despite losing the muscle of the civil service.

“But it is like guerrilla warfare,” he said.

“You suddenly lose all the trappings of government. Somebody once said to me, ‘when you get in the back of a car and you sit down and it doesn’t go anywhere, that’s when you realise you’re no longer a minister’.

“So it is that sort of sense of being looked after that disappears.”

There’s also a smaller team of Conservatives in the Commons. Before the election, Rishi Sunak had 343 MPs behind him.

Ms Badenoch currently only has 119.

“When you’re down to 120 MPs – and some set piece events, there might be only a fraction of those people there – it’s much quieter.

“What I actually often do is I can be quite provocative of the Opposition to get them going, because then at least you get something to feed off. Sometimes I do that to, just get the energy in the chamber.”

2. Being at the despatch box on big days can be ‘tricky’ – but he has a ‘secret’

You may remember Sir Mel’s lively response to Rachel Reeves’s spring statement in March. He revealed that, on those big political days, he isn’t told what the chancellor will say until about half an hour before it’s said in the Commons.

“It does give you and your team literally 10 or 15 minutes to… work out what the main things are,” he said.

However, he tells Electoral Dysfunction that you do have to be able to think on your feet in that scenario.

He said: “You are thinking about ‘what are the attack lines I’m going to use?’… and amend what you’re going to do.”

He added that he doesn’t get nervous. That might have to do with Sir Mel having been president of the Oxford Union debating society “many, many years ago”.

“Now the secret’s out. The secret is out Beth, and you’re the first to have gleaned that secret from me,” he said.

To be fair, it is on his website.

3. He’s not a huge fan of Reform

Nigel Farage
Image:
Nigel Farage

As the Conservatives battle with Reform for the right, Sir Mel didn’t have many positive words for Nigel Farage’s party.

“With Reform… these are populists, who peddle fantasy economics,” he said.

“‘Take everybody out of income tax up to £20,000 costs about £80bn according to the IFS [Institute For Fiscal Studies].”

The IFS has said it needed “more detail” to exactly cost Reform’s proposal, but “it could easily be in the range of £50 to £80bn a year”.

“I think ultimately,” Sir Mel says, “people will see through a lot of the populism that Reform stands for.”

He added that he believed that Reform’s 2024 manifesto, was, economically, “a work of fiction”.

“I mean, it’s quite dangerous, actually. I think if they’d been elected… the economy would have gone into a very bad place,” he said.

4. His ideal lunch? A cheese and ham toastie

Ms Badenoch and Sir Mel see eye-to-eye on many things - lunch isn't one of them. Pic: PA
Image:
Ms Badenoch and Sir Mel see eye-to-eye on many things – lunch isn’t one of them. Pic: PA

Sir Mel also addressed the most pressing issue of all – lunch.

If you’re unaware, this has proven a controversial subject in Westminster. Ms Badenoch told The Spectator in December she was “not a sandwich person… lunch is for wimps”.

In March, however, Ms Reeves gave a rebuttal to Electoral Dysfunction, revealing she whips up a cheddar sandwich in 11 Downing Street when she can.

Read more from Sky News:
Labour MP hits out at ‘farce’ anti-corruption trial in Bangladesh
Lammy refers himself to watchdog after fishing with JD Vance

Sir Mel falls more in line with his opposite number than his leader.

“I’ve always liked a sandwich, particularly a toasted sandwich,” he said.

“I’d go with the Cadillac, the Rolls Royce of sandwiches, a ham and cheese.”

Sir Mel has previously, however, been partial to some more peculiar fillings.

“Do you remember those Breville toastie makers? When I went to university, I had one of those, or whatever the equivalent was,” he said.

“You could put baked beans in, eggs in, and all sorts of things.

“It was fantastic.”

To each, their own.

Electoral Dysfunction unites political powerhouses Beth Rigby, Ruth Davidson, and Harriet Harman to cut through the spin, and explain to you what’s really going on in Westminster and beyond.

Want to leave a question for Beth, Ruth, and Harriet?

Email: electoraldysfunction@sky.uk

WhatsApp: 07934 200444

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