By Natasha Khan

Shoppers are getting more difficult to please. Confronted with falling sales, makers of cigarettes, potato chips, cosmetics and garbage bags are re-examining what they offer -- and at what price.

Reynolds American is trying to reach low-income smokers with a more affordable pack of Newport cigarettes. The maker of Cheetos and Doritos is playing around with how many servings of chips it includes in a multipack. Estée Lauder is trying to turn around its sales slump with a plan that includes developing new products across its cosmetics portfolio, which ranges from $25 lipsticks to perfumes that sell for over $1,000.

"Our intent...is to meet the consumer where they are with the right product, but also at the right price point," Estée Lauder's new chief executive, Stéphane de La Faverie, told analysts this month.

Consumers are on edge. Tariff threats, stock-market swings and whipsawing directives from the White House are causing Americans to feel more pessimistic about the economy than they did before President Trump took office. Consumer sentiment fell about 5% in the University of Michigan's preliminary February survey to its lowest reading since July 2024.

Many consumers are looking for good value, but that doesn't necessarily mean a lower price.

"They are looking for better and enhanced value in the products, which means they are trading up to innovation," Linda Rendle, CEO of Clorox, said on a call with analysts this month.

Clorox is marketing stronger Glad trash bags and more-concentrated Pine-Sol cleaner as ways for shoppers to get better value. Depending on how recently their paychecks cleared, some consumers might choose a larger size to get the best cost per use, while others might size down to spend less cash. The goal is to provide a range of options, Rendle said.

There is a widening gap in the spending ability of lower-income and higher-income shoppers. People with more limited budgets are having to work harder to make ends meet.

"When we talk to consumers, value is the number one decision maker," PepsiCo CEO Ramon Laguarta told analysts this month. The company's North American snacks business, which makes Doritos, Cheetos and Lay's potato chips, reported a 3% drop in sales volume in the quarter ended Dec. 28.

The company is working on a greater range of package sizes to serve shoppers at different times of the month, when they may have more or less cash on hand.

For example, PepsiCo will sell multipacks with as few as six or eight bags of chips, an option that could appeal to a cash-strapped shopper at the end of the month, Laguarta said. The company's multipacks typically contain 18 or more bags of chips. PepsiCo is also introducing a single-serve bag of chips for under $1, Laguarta said.

Estée Lauder, meanwhile, is considering how to attract customers with $200 jars of moisturizing cream and $34 eye-shadow sticks.

The company this month said it would cut up to 7,000 jobs and warned that it expected sales to fall 10% to 12% in the quarter that ends March 31. The maker of MAC, Clinique and Tom Ford has been struggling with weak demand, including markets in Asia and North America.

The CEO, de La Faverie, said the company hadn't fueled acquisition of new consumers aggressively enough. "We will innovate across price tiers from entry prestige to luxury, making sure to bring products to market at attractive price points" to attract new consumers, he said. "You are going to see a lot more innovation coming."

Write to Natasha Khan at natasha.khan@wsj.com

(END) Dow Jones Newswires

February 17, 2025 10:00 ET (15:00 GMT)

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