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Published Oct 14, 2024 • Last updated 0 minutes ago • 1 minute read
A fast-food consumer slowdown has one major McDonald’s french fry supplier in a deep-fried dilemma resulting in job cuts.
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Lamb Weston — the largest producer of french fries in North America –recently announced it is slashing 4% of its global workforce and reducing production lines following a less-than-stellar earnings report, per the New York Post.
The Eagle, an Idaho-based company closed a plant in Connell, Wash., on short notice, resulting in 375 jobs being lost, NBC NonStop Local reported.
If the question is “do you want fries with that,” the answer lately seems to be a resounding “no.”
“Restaurant traffic and frozen potato demand, relative to supply, continue to be soft, and we believe it will remain soft through the remainder of fiscal 2025,” Lamb Weston CEO Tom Werner said in a statement.
The company’s shares have nosedived nearly 35% so far this year.
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Consumers battling inflation have reduced their spending at fast-food restaurants, opting instead to cook at home.
Lamb Weston also supplies restaurants and grocery stores, but relies heavily on its fast-food business.
The company said about 80% of french fries consumed in the U.S. come from fast-food joints.
McDonald’s is Lamb Weston’s largest customer. Sales have similarly dipped for the golden arches restaurant. McDonald’s same-store U.S. sales fell 0.7% last quarter compared to the same period one year earlier.
Lamb Weston’s net sales declined 1%, its income from operations dropped 34% and its net income fell 46% compared to the same period one year earlier.
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