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Lamb Weston said restructuring the company would not impact consumers.
Major french fry supplier is cutting jobs as consumer continue to count inflated prices at fast food chains.
“Restaurant traffic and frozen potato demand relative to supply continue to soft and we believe it will remain soft through remainder of fiscal 2025” Tom Werner Lam Weston president and CEO add last week.
Lam Weston the mega producer of french fries in North America revealed last week it was closing its plant in Connell Washington meaning 375 employees or 4% of its workforce would be laid off according to last week report.
Fast food chains have felt results of inflation as cash consumers have been more careful many restaurants.
A survey in May revealed that 80% of Americans considered fast food to be luxury because of inflation.
“Together we expect these actions will help us better manage our factor utilization rates and ease some of current supply demand imbalance in North America”
“We are taking actions to reduce operating expenses including reducing headcount and eliminating certain unfilled job position as well as reducing capital expenditures.”
To win back consumers chains launched meal deals. McDonalds launched a $5 Meal Deal that includes a McDouble or McChicken sandwich four piece chicken nuggets small fries and small fountain drink.
Restaurant traffic in US was down 2% last quarter and 3% the quarter compared to same time past year.
Burger King and Wendy launched deals that come with fries as well.
The demand for fries has dropped Werner said.
“It is important to note that many of these promotional meal deals have consumers trading down for medium fry of small fry”
Lamb Weston the largest producer of french fries in North America and supplier to fast food chains restaurant and grocery store is closing a production plant in Washington state.
The company revealed last week that it would lay off 400 employees or 4% of state.
Fast food chains McDonalds are less value menus to try to lure customer back.
McDoanld has launched a $5meal which include a McDouble cheeseburger or McChicken sandwich small soft drink, 4 piece chicken nuggets small french fries.
These deals are not helping Lamb Weston people are purchasing smaller.
