French fries major McDonald’s closes Washington plant and cuts jobs as inflation continues

A major French fries supplier is cutting jobs as customers continue to count their cash amid inflated prices at fast-food chains.

Lamb Weston, North America’s largest french fry maker, announced last week that it is closing its plant in Connell, Wash., which means 375 employees, or 4 percent of its workforce, will be laid off, according to a earnings report released last week. .

“Restaurant traffic and demand for frozen potatoes relative to supply continues to be weak and we believe will remain weak through the remainder of fiscal 2025,” Tom Werner, president and CEO of Lamb Weston, said last week on a call to income.

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“Together, we expect these actions will help us better manage our plant utilization rates and alleviate some of the current supply-demand imbalance in North America,” he added. “We are also taking steps to reduce operating expenses, including reducing headcount and eliminating certain vacant positions, as well as reducing capital expenditures. The combined estimated savings from these actions are reflected in our updated targets for fiscal year 2025.”

The Eagle, Idaho-based company told Fox Business that the restructuring will not affect supply to customers.

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Fast-food chains felt the effects of inflation as cash-strapped customers were more wary of patronizing many restaurants. A May poll found that 80 percent of Americans considered fast food a “luxury” because of the high prices.

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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-piece chicken nuggets, fries and a small fountain drink.

FOX Business reached out to McDonald’s.

Other rivals such as Burger King and Wendy’s have also launched similar offerings that also come with fries. Despite the value meals, demand for French fries has declined, Werner said.

“It’s important to note that many of these food promotions cause consumers to switch from a medium to a small fry,” he said.

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Overall, U.S. restaurant traffic fell 2 percent in the latest quarter and 3 percent in the previous quarter compared to the same period last year, according to Lamb Weston.

Source of the original article: French fries major McDonald’s closes Washington plant and cuts jobs as inflation continues