A major french fries supplier for McDonald’s has suddenly shuttered a plant and cut jobs.
Lamb Weston, which is the biggest french fries makers in North America, announced last week in an earnings report that it was shuttering its factory in Cornell, Washington.
Along with the closing, 375 workers representing 4% of its workforce are being laid off.
The company’s president and CEO, Tom Werner, said that restaurant traffic and the demand for frozen potatoes relative to supply ‘continue to be soft’ and that he expects it will remain that way through fiscal year 2025.
‘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,’ said Werner in a call, according to FOX Business.
‘We are also taking actions to reduce operating expenses, including reducing headcount and eliminating certain unfilled job positions, as well as reducing capital expenditures.’
Lamb Weston, based in Eagle, Idaho, stated that it does not expect the restructuring to affect supply for customers.
But the measures are expected to amount to saving for the company and keep it in line for meeting its fiscal targets.
It is one of numerous companies and fast food chains that have been impacted by inflation-hit customers tightening their purse strings.
McDonald’s this past summer introduced a $5 Meal Deal with a McDouble or McChicken sandwich, four-piece chicken nuggets, an order of small fries and a small fountain drink.
The value meals have not helped reverse the trend of decreased demand for fries, according to Werner.
‘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.
The Lamb Weston factory closing was announced weeks after Pizza Hut’s largest franchise, EYM Pizza L.P., put all 127 of its remaining locations across five US states up for sale as it was unable to bounce back from bankruptcy.
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