Major McDonald’s french fry supplier closes plant in Washington, slashes jobs as inflation continues | FOX Business
Fast food just doesn’t hit the same anymore for some folks. With inflation tightening wallets, even grabbing fries at the drive-thru has become a splurge for many. Lamb Weston, the heavyweight of the french fry game in North America, is feeling the crunch. Recently, the company made a tough call to close down its plant in Connell, Washington, laying off 375 workers—about 4% of its workforce. The reason? Soft demand for fries and a dip in restaurant traffic, which Lamb Weston’s CEO, Tom Werner, says could stick around through the end of fiscal 2025.
So, what’s going on? People are hitting the brakes on dining out, seeing fast food as more of a luxury now that prices have climbed. Some studies show that 80% of Americans see it that way. To lure them back, fast-food giants like McDonald’s, Burger King, and Wendy’s have cooked up value meals, like McDonald’s $5 Meal Deal. It’s a sweet setup, but there’s a catch: even though these deals include fries, customers often opt for smaller portions, downgrading from medium to small fries.
Lamb Weston is feeling the effects of these changes. Despite the deals, demand for their signature fries is dropping, and restaurant traffic across the U.S. fell 2% last quarter. To keep up with these trends, the company is cutting costs, reducing its workforce, and taking a hard look at its factory operations. For them, it’s all about balancing supply and demand while trying to navigate the unpredictable landscape of fast food and inflation.
With fewer people hitting up fast-food spots and customers grabbing smaller portions when they do, it seems like everyone—from fry-makers to burger flippers—is trying to adjust to a new normal. How will fast-food chains, suppliers, and customers find their way through these choppy economic waters? That’s the billion-dollar question……
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Rising Dough
How do rising prices at fast-food chains affect customers and the larger web of businesses—like suppliers and investors—that rely on steady consumer demand?
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