A major french fry supplier is laying off workers as customers continue to save money in the face of high fast-food pricing.
Lamb Weston, North America’s largest manufacturer of French fries, announced last week that it would close its factory in Connell, Washington, and lay off 375 employees, or 4% of its staff, according to an earnings report filed last week.
“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,” Tom Werner, Lamb Weston president and CEO, said last week on an earnings call.
YOU MAY ALSO LIKE: China Threatens Retaliation For Taiwan Aid And TikTok Law Signed By Biden
“Together, we expect these actions will help us better manage our factory utilization rates and ease 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 unfilled job positions, as well as reducing capital expenditures. The combined estimated savings from these actions are reflected in our updated fiscal 2025 targets.”
The company in Eagle, Idaho, assured reporters that the restructuring will not affect customer supplies.
Fast-food franchises have faced the effects of inflation, as cash-strapped customers have become more cautious about visiting many outlets. A May survey found that 80% of Americans perceived fast food to be a “luxury” due to its high prices.
To reclaim customers, numerous chains introduced meal bargains. Over the summer, McDonald’s introduced a $5 Meal Deal that includes a McDouble or McChicken sandwich, four chicken nuggets, small fries, and a small fountain drink.
Other rivals, such as Burger King and Wendy’s, have announced similar offers that include fries. Despite the value of meals, Werner reported that demand for fries had decreased.
“It’s important to note that many of these promotional meal deals have consumers trading down from a medium fry to a small fry,” he said.
Overall, restaurant traffic in the United States fell 2% last quarter and 3% the preceding quarter compared to the same period last year, according to Lamb Weston.
Catch up with the latest news from SurgeZirc on WhatsApp by following our channel. Click here to join.
Kindly follow @surgezirc on Instagram. On X (Twitter), follow @surgezircnews.
