(Reuters) -PepsiCo ( PEP ) missed expectations for second-quarter revenue on Thursday as a series of price hikes and competition from private-label brands slowed sales of its snacks and soda mainly in the United States, its largest market.

Analysts have said that product prices, which are starting to normalize almost after two years of multiple hikes, are still higher than the pre-pandemic levels, giving packaged-food companies such as PepsiCo ( PEP ) little room to raise prices as volumes shrink.

PepsiCo ( PEP ) raised average prices on its products by 5% for the quarter ended June 15, in line with the first quarter. However, overall organic volumes slipped 3%.

Data from NielsenIQ showed sales at Frito-Lay North America, the company's snacking business that sells Lay's and Doritos chips, fell nearly 1.3% in the four weeks ended June 15, while the overall salty snacks category in the United States saw a smaller 0.7% decline.

Frito-Lay North America, which contributed about 27% to PepsiCo's ( PEP ) total revenue in fiscal 2023, is the company's second-largest business after North America beverages unit, which accounted for about 30% of overall sales.

Shares of the company fell 2.2% in premarket trading.

Easing production and other expenses from pandemic peaks are giving companies some relief from a surge in costs.

That and the impact of price hikes pushed up second-quarter gross margins by 120 basis points.

The company's revenue rose 0.8% to $22.50 billion in the quarter, while analysts had estimated $22.57 billion, according to LSEG data.

On an adjusted basis, PepsiCo ( PEP ) earned $2.28 per share, beating estimates of $2.16 per share.

(Reporting by Ananya Mariam Rajesh in Bengaluru; Editing by Anil D'Silva)