Lamb Weston, a McDonald’s french fries supplier, is shutting down one of the largest production facilities in Connell, Washington, the company announced last week.
Also the largest producer of french fries in North America, nearly 400 jobs would be axed, amounting to 4% of its workforce. Furthermore, production lines are going to be cut for the moment, prompted by the sluggish customer demand.
According to CNN, shares of Lamb Weston have plummeted by about 35% this year. To help with the flat demand, the company introduced a $5 Meal Deal that comes with a McDouble or McChicken, a four-piece nugget, a small fries, and a small fountain drink. However, all of that was to little avail.
The internet, on the other hand, had a lot to say about this decision. Many took to X to share their grievances on the increasingly difficult implications of inflation. Or, as one user put it,
"Not lovin’ that."
"Nobody wants to spend 6$ on chemical fries anymore?" one user questioned, sarcastically.
"Oh no! Whatever, will we do for our french fry fix?" one user said, wittily.
"Lamb weston sold $6.5b in potatoes to McDs equating to 15% of their total revenue. If revenue is weakening, maybe LW should look internally at lowering costs vs firing people and blaming the public for being unable to afford $5 for fries or a $12 heart attack sack," one user suggested.
"I've worked with enough startups to know that when consumers start trading down on fries, it's a sign of deeper economic anxiety. This trend is a canary in the coal mine for the entire industry," one user tweeted.
Several others expressed their dismay at the state of the economy.
"It's hard to justify paying $4.99 for fries when you can get 5+ pounds of potatoes at the store for the same price, and cook them at home in much healthier oil," one user pointed out.
"When they cost as much as going to Applebee's next door, the choice is obvious," yet another claimed.
"I've seen this trend firsthand, watching friends and family opt for smaller portions or skip the fries altogether. Rising prices are hitting home, and it's not just fast food that's feeling the pinch," another user chimed in.
CEO of Lamb Weston says "frozen potato demand" is the culprit
Per Fox Business, CEO of Lamb Weston, Tom Werner, said in an earnings call,
"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. 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 continued, reflecting on the jobs getting slashed.
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"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."
However, the Lamb Weston CEO did clarify that the shift in dynamics would have no implications on the supply to consumers.
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