Kraft Heinz Slashes Prices as Consumer Affordability Hits Breaking Point

Kraft Heinz CEO Steve Cahillane said his company is focused on lowering prices because consumers are having trouble paying their bills.

In an interview with The Wall Street Journal, Cahillane said the packaged food company’s strategy includes price cuts on items that had become expensive, more promotions, and new, smaller package sizes with lower prices.

“Consumers are literally running out of money toward the end of the month,” Cahillane said. “Being there with the right offering at the right time has never been more important.”

PYMNTS CEO Karen Webster wrote in an article posted in January that for a growing share of consumers, affordability conversations revolve around covering day-to-day expenses rather than preferences such as vacations, home renovations, newer cars or savings.

Citing PYMNTS Intelligence research, Webster said 87% of consumers report that rising prices on everyday items is a challenge.

“The biggest components of household budgets — housing, healthcare, insurance, utilities, transportation and debt service — have reset higher over the past several years and show little evidence of reverting,” Webster wrote. “These are not expenses consumers can easily comparison-shop, negotiate away or substitute out of.”

PYMNTS Intelligence’s February “Generational Pulse Report” found that the share of consumers who said the experience financial stress when buying groceries rose to 89% in January, a figure that was five percentage points higher than the 84% who said that in October.

In addition, 51% of consumers said that managing their daily living costs was challenging, according to the report.

It was reported in February that not only Kraft Heinz but also fellow packaged food giants General Mills and PepsiCo were cutting prices to woo cautious consumers.

The report cited Bureau of Labor Statistics data showing that consumers have cut their spending as grocery prices have climbed 26% in the past five years.

PepsiCo CEO Ramon Laguarta said in February that his company was seeing “a middle- and low-income consumer that continues to be stretched and choiceful.”

At the time, PepsiCo was planning to make “surgical” price cuts of up to 15% on certain snack brands after seeing its North American sales dip 2% in 2025.