Coca-Cola says it’s done raising prices in the U.S. and Europe this year

For two years, Coca-Cola has been raising prices on its drinks to combat higher costs. But the company said Wednesday it’s done hiking prices this year in developed markets like the U.S. and Europe.

Coke follows the lead of rival PepsiCo, which said in February it wouldn’t raise prices beyond its usual hike for beverages in the fourth quarter. Both companies have reported strong sales growth thanks to higher prices, but consumer demand has weakened, although not as much as expected.

Coke’s prices were up 10% in the second quarter compared with the year-ago period.

Customers in the U.S. and Europe are switching to private label bottled water and juices, Coke CEO James Quincey said Wednesday on the company’s conference call. The company reported that U.S. unit case volume fell 1% in the second quarter.

“Across the sector, consumers are increasingly cost conscientious. They are looking for value and stocking up on items on sale,” Quincey said.

Coke plans to keep raising prices in line with inflation in developing markets like Latin America.

Pepsi has seen even steeper declines in demand than Coke. The Frito-Lay owner reported that its North American beverage volume tumbled 4.5% in the second quarter. Its Quaker Foods North America unit’s volume fell 5%. Frito-Lay North America was the only bright spot, reporting 1% volume growth, thanks to consumers’ enduring snack habits.

Coke shares fell less than 1% in morning trading, despite the company raising its full-year outlook and reporting earnings and revenue that topped Wall Streeet estimates.