Lamb Weston Closes Plant in Washington
Lamb Weston, a major supplier of French fries for McDonald's, has announced the closure of its plant in Connell, Washington. This decision will result in the layoffs of approximately 375 employees, about 4% of the company’s workforce. The closure comes as consumer demand for fast food has significantly declined, with many people choosing to cook at home due to rising food prices.
Tom Werner, the company’s president and CEO, noted that both restaurant visits and the demand for frozen potatoes are "soft" and are likely to remain that way through fiscal year 2025. Although fast-food chains like McDonald's have tried to attract customers with deals, such as the $5 Meal Deal, these promotions have not been enough to boost fry sales. In fact, many customers are opting for smaller fry sizes instead of medium ones.
As North America's largest French fry producer, Lamb Weston supplies about 80% of fast-food fries in the U.S. The plant closure is part of a larger strategy to manage production and cut costs in response to a tough economic environment.
The company has also seen a significant drop in its share price, which has fallen by 35% this year, reflecting the ongoing challenges in the fast-food industry as inflation continues to affect consumer spending.