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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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UK played ‘vital role’ in Gaza peace deal, says Trump aide, after minister branded ‘delusional’

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UK played 'vital role' in Gaza peace deal, says Trump aide, after minister branded 'delusional'

Steve Witkoff, the US special envoy to the Middle East, has claimed the UK played a “vital role” in helping negotiate the Gaza peace deal, smoothing over a potential diplomatic row between London and Washington.

Witkoff took to X on Monday, ahead of meeting President Donald Trump in Israel, to praise the UK.

“I would like to acknowledge the vital role of the United Kingdom in assisting and coordinating efforts that have led us to this historic day in Israel,” Witkoff wrote.

“In particular, I want to recognise the incredible input and tireless efforts of National Security Advisor Jonathan Powell.”

His comments came 24 hours after education secretary Bridget Phillipson was branded “delusional” by Mike Huckabee, the US ambassador to Israel, for claiming that Sir Keir Starmer’s presence at a signing ceremony for today’s ceasefire deal in Egypt “demonstrates the key role that we [Britain] have played”.

The minister made her remarks on Sunday Morning With Trevor Phillips but did not say exactly what the UK’s role in the ceasefire, largely attributed to Donald Trump, is or was.

Politics latest: Phillipson announces crackdown on antisemitism at UK universities

More on Bridget Phillipson

Phillipson added: “We have played a key role behind the scenes in shaping this.

“It’s right that we do so because it’s in all of our interest, including our own national interest, that we move to a lasting peace in the region.

“These are complex matters of diplomacy that we are involved in. But we do welcome and recognise the critical role that the American government played in moving us to this point.”

Her comments prompted Mr Huckabee to repost the Sky News clip on social media, claiming: “I assure you she’s delusional.”

He added: “She can thank Donald Trump anytime just to set the record straight.”

Mr Huckabee was part of the negotiating team for the peace deal, with Mr Trump calling the former Arkansas governor “AMAZING” as he said he “worked so hard, and did so much, to bring about peace in the Middle East”.

In August, Mr Huckabee said the UK and other European nations that said they would declare a Palestinian state were “having the counterproductive effect that they probably think that they want”.

Israel: UK did not play key role in peace deal

Israel’s deputy foreign affairs minister, Sharren Haskell backed Huckabee, telling Sky News the UK played “the opposite” of a key role in the peace deal after recognising the Palestinian state.

“The message that the UK government has sent Hamas was the message that: the longer they continue this war, they will be rewarded.

“I mean, you must understand that when a terrorist organisation is thanking you. You are on the wrong side of history.”

It is understood the prime minister has underlined Mr Trump’s key role in securing this deal throughout the process. Publicly, he praised Mr Trump twice in his press conference in India on Thursday.

Read more:
Gaza latest: Hostages Square boos Netanyahu
Hamas official thanks Donald Trump for ceasefire deal

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Final preparations for hostages in Israeli hospital

Ms Phillipson stood by the September decision to declare a Palestinian state, saying it was “the right thing to do”.

Husam Zomlot, the Palestinian ambassador to the UK, told Sky News it was a “moment of leadership” for the UK to declare a Palestinian state, and a “responsibility to begin to correct a century of the gravest historic injustices committed against our people”.

He added: “That moment three weeks ago, when the UK did recognise, is a moment when we can say that the wheels of history are turning in a different direction.”

No plans for British troops on the ground

The education secretary also told Sky News the government has “no plans” to put British troops into Israel or Gaza as part of a stabilisation force after the ceasefire.

The US military will help establish a multinational force in Israel, known as a civil-military coordination centre, which is likely to include troops from Egypt, Qatar, Turkey and the UAE.

Tens of thousands of Palestinians have walked back to Khan Younis in southern Gaza. Pic: AP
Image:
Tens of thousands of Palestinians have walked back to Khan Younis in southern Gaza. Pic: AP

On Friday, US officials said up to 200 US troops already based in the Middle East will be moved to Israel to help monitor the ceasefire in Gaza.

The day before, President Trump announced Israel and Hamas had “signed off on the first phase” of a peace plan he unveiled last week.

Pic: Reuters
Image:
Pic: Reuters

Aid trucks have been gathering in Egypt to cross into Gaza after months of warnings by aid groups of famine in parts of the territory.

In Israel, the remaining hostages are due to be returned from Gaza by Hamas on Monday under the first phase of the peace plan. Twenty are believed to still be alive, 26 have been declared dead, while the fate of two is unknown.

The ceasefire agreement has been made two years after Hamas stormed Israel on 7 October 2023, killing 1,200 people and taking 251 hostages.

Israel’s military offensive has killed more than 67,000 Palestinians in Gaza, according to the Hamas-run health ministry, which the UN deems reliable.

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Chants of frustration turn into songs of celebration in Tel Aviv as crowds greet hostages

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Chants of frustration turn into songs of celebration in Tel Aviv as crowds greet hostages

For two years, they have gathered in Hostages Square – parents, brothers, sisters, extended family and friends clutching photographs and signs reading “bring them home”.

They have campaigned, protested and prayed for the return of loved ones taken in the 7 October attacks.

But now the mood has shifted.

The chants of frustration have turned into songs of celebration.

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Sky’s Alex Rossi reports from Hostages Square in Tel Aviv, where thousands gathered to witness the return of all living Israeli captives.

The tears that once fell in despair are now tears of relief.

The square, normally a site of weekly demonstrations, has transformed into a sea of flags.

Gaza: Follow the latest updates

Crowds gather in Hostages Square in Tel Aviv. Pic: AP
Image:
Crowds gather in Hostages Square in Tel Aviv. Pic: AP

We watched as tens of thousands packed into this area of Tel Aviv to witness a moment many feared might never come – the homecoming of the remaining hostages.

Every few minutes, the massive video screens behind the stage beamed new images – exhausted but smiling hostages embracing their families.

Each clip is met with a roar of applause – the atmosphere is one of sheer elation, it is electric.

When helicopters pass overhead, ferrying freed captives to nearby hospitals, the crowd erupts again and again, looking upwards to the sky in awe at the impossible that’s now been made possible.

Pic: Reuters
Image:
Pic: Reuters

The sense of catharsis here is palpable – at last some closure after a nightmare two years and a chance for the healing process of a nation to begin.

But beneath the jubilation, there’s a deep well of sorrow – and reckoning.

The 7 October massacre was the deadliest single-day attack on Israel since the nation’s founding in 1948 – an event that upended the country’s sense of safety and unity.

More than 1,000 were killed that day, and hundreds were taken into Gaza.

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‘Israel is committed to peace’

For the families who never stopped fighting for their return, this is both an ending and a beginning.

Now that the living hostages are home, attention turns to those who did not survive.

Officials say the process of identifying and repatriating remains will take time – and for some families, closure still remains heartbreakingly out of reach.

But the questions that linger extend far beyond grief.

Read more:
Drones capture staggering images of Gaza devastation
Hostages released under Gaza ceasefire deal

Thousands of people celebrate the release of the hostages. Pic: AP
Image:
Thousands of people celebrate the release of the hostages. Pic: AP

In the days and weeks ahead, the Israeli government faces intense scrutiny.

How could the country’s fabled intelligence and defence apparatus fail so catastrophically?

And what accountability, if any, will fall on Prime Minister Benjamin Netanyahu, who has faced mounting criticism over both the failures leading up to the attack and the protracted efforts to secure the hostages’ release?

This is a nation rejoicing, but also searching for answers.

For now, though, the families in this square are holding tight to one immutable positive – after more than two long years, the living hostages, at least, are finally home.

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World

Drones capture staggering images of Gaza devastation – as people find nothing left

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Drones capture staggering images of Gaza devastation - as people find nothing left

Drones have been a common sight in Gaza for a long time, but they have always been military.

The whine of a drone is enough to trigger fear in many within the enclave.

But now, drones are delivering something different – long, lingering footage of the devastation that has been wreaked on Gaza. And the images are quite staggering.

Gaza latest: Chants of ‘thank you Trump’ in Hostages Square

Whole city blocks reduced to rubble. Streets destroyed. Towns where the landscape has been wholly redesigned.

Whole city blocks reduced to rubble
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Whole city blocks reduced to rubble

Decapitated tower blocks and whole areas turned into black and white photographs, where there is no colour but only a palette of greys – from the dark hues of scorched walls to the lightest grey of the dust that floats through the air.

And everywhere, the indistinct dull grey of rubble – the debris of things that are no longer there.

Gaza is full of people returning to their homes
Image:
Gaza is full of people returning to their homes

The joy that met the ceasefire has now changed into degrees of anxiety and shock.

Gaza is full of people who are returning to their homes and hoping for good news. For a lucky few, fortune is kind, but for most, the news is bad.

Umm Firas has been displaced from her home in Khan Younis for the past five months. She returned today to the district she knew so well. And what she found was nothing.

Umm Firas returned to find nothing
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Umm Firas returned to find nothing

“This morning we returned to our land, to see our homes, the neighbourhoods where we once lived,” she says.

“But we found no trace of any houses, no streets, no neighbourhoods, no trees. Even the crops, even the trees – all of them had been bulldozed. The entire area has been destroyed.

“There used to be more than 1,750 houses in the block where we lived, but now not a single one remains standing. Every neighbourhood is destroyed, every home is destroyed, every school is destroyed, every tree is destroyed. The area is unliveable.

“There’s no infrastructure, no place where we can even set up a tent to sit in. Our area, in downtown Khan Younis used to be densely populated. Our homes were built right next to each other. Now there is literally nowhere to go.

“Where can we go? We can’t even find an empty spot to pitch our tent over the ruins of our own homes. So we are going to have to stay homeless and displaced.”

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It is a story that comes up again and again. One man says that he cannot even reach his house because it is still too near the Israeli military officers stationed in the area.

Another, an older man whose bright pink glasses obscure weary eyes, says there is “nothing left” of his home “so we are leaving it to God”.

“I’m glad we survived and are in good health,” he says, “and now we can return there even if it means we need to eat sand!”

A man says there is 'nothing left'
Image:
A man says there is ‘nothing left’

A bulldozer moves rubble
Image:
A bulldozer moves rubble

The bulldozers have already started work across the strip, trying to clear roads and allow access. Debris is being piled into huge piles, but this is a tiny sticking plaster on a huge wound.

The more you see of Gaza, the more impossible the task seems of rebuilding this place. The devastation is so utterly overwhelming.

Bodies are being found in the rubble while towns are full of buildings that have been so badly damaged they will have to be pulled down.

Humanitarian aid is needed urgently, but, for the moment, the entry points remain closed. Charities are pleading for access.

It is, of course, better for people to live without war than with it. Peace in Gaza gifts the ability to sleep a little better and worry a little less. But when people do wake up, what they see is an apocalyptic landscape of catastrophic destruction.

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