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A major supplier of French fries is cutting jobs as customers continue to count their wages amid price inflation at fast food chains.
Lamb Weston, the largest producer of French fries in North America, announced last week that it would close its plant in Connell, Washington, meaning 375 employees, or 4% of its workforce, would be laid off, according to an earnings report released last week. .
“Restaurant traffic and frozen demand for potatoes, relative to supply, remains weak, and we believe it will remain weak through the remainder of fiscal 2025,” Tom Werner, Lamb Weston’s president and CEO, said last week on an earnings call.
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Wendy’s fries appear at a restaurant location in Mount Vernon, Illinois, on July 29, 2015. (Luke Sharrett/Bloomberg via Getty Images / Getty Images)
“Together, we expect these actions to help us better manage our plant operating rates and mitigate some of the current supply-demand imbalance in North America,” he added. “We are also taking actions to reduce operating expenses, including reducing headcount and eliminating certain vacant positions, as well as reducing capital expenditures. The estimated combined savings from these actions are reflected in our updated 2025 financial goals.”
The Eagle, Idaho-based company, told FOX Business the restructuring will not impact the offering to customers.
Fast food chains have felt the consequences of inflation as cash-strapped customers have become more cautious about patronizing many restaurants. A poll conducted in May revealed that 80% of Americans consider fast food a “luxury” because of its high prices.
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An employee fills a bag with French fries at a branch of the fast food chain McDonald’s. (Matthias Balk/Image Alliance via Getty Images/Getty Images)
To win back customers, many chains have launched meal deals. Over the summer, McDonald’s launched a $5 meal deal that includes a McDouble or McChicken sandwich, four chicken nuggets, small fries and a small fountain drink.
FOX Business reached out to McDonald’s.
Other competitors like Burger King and Wendy’s have also launched similar offers that come with french fries as well. Despite the value meals, demand for French fries has declined, Werner said.
“It’s important to note that many of these promotional meal deals cause consumers to trade up medium fries to small fries,” he said.
A McDonald’s McDouble cheeseburger, mini fries, four-piece chicken nuggets, and a mini soft drink are being ordered in New York City on June 17. (Lucia Buricelli/Bloomberg via Getty Images / Getty Images)
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Overall, U.S. restaurant traffic was down 2% last quarter and 3% in the prior quarter compared to the same period last year, according to Lamb Weston.
