A massive McDonald’s supplier is now laying off 400 workers and closing a plant as the industry aims to bring back customers.
A supplier of French fries for McDonald’s is set to shut down an entire plant and lay off hundreds of workers this fall.
This decision comes as many consumers are moving away from fast food due to rising inflation and high menu prices.
Lamb Weston, one of North America’s largest French fry manufacturers, confirmed the plant closure in a press release on October 1.
Headquartered in Eagle, Idaho, Lamb Weston supplies frozen potato products to various fast food chains, grocery stores, and restaurants.
The Connell, Washington plant, located about 100 miles southwest of Spokane, will be the one affected, resulting in the layoff of 379 employees, which is about 4% of its total workforce of approximately 10,700.
The company has encouraged affected employees to apply for openings at other Lamb Weston facilities and announced upcoming job fairs to assist those laid off.
Under Washington’s Worker Adjustment and Retraining Notification (WARN) Act, employees must be informed at least 60 days prior to layoffs or closures.
Lamb Weston filed the necessary forms with the Washington State Employment Security Department as of October 1, and while the closure is set for November 30, production at the plant has already ceased as of September 30.
Lamb Weston’s CEO, Thomas Werner, attributed the closure to a “supply and demand imbalance in North America and an ongoing inflationary environment.”
He emphasized the company’s commitment to transparency and support for affected employees and their communities.
In 2024, Lamb Weston has faced financial challenges, with its market shares plummeting by 35%.
Werner noted that McDonald’s recent initiatives to attract customers with lower-priced value meals have not helped the situation.
The fast food giant introduced a $5 meal deal earlier this summer, which included a McDouble or McChicken, a four-piece chicken nugget, small fries, and a soft drink.
Werner explained that many customers have been opting for smaller fries with these promotions, raising concerns since McDonald’s accounts for about 13% of Lamb Weston’s revenue.
The fast food industry as a whole has struggled this year, with Lamb Weston reporting a collective 2% drop in customer traffic at the chains it serves last quarter, and a 3% decline the previous quarter compared to 2023.
Customers have voiced frustrations over McDonald’s pricing, with viral videos highlighting high costs for combo meals.
In response, McDonald’s CEO Chris Kempczinski has promised “menu innovation” and more appealing prices.
The chain has also been testing new value items, such as a three-piece McCrispy Chicken Strips combo for $4.99 and 50-cent burgers on National Cheeseburger Day.
Additionally, McDonald’s has faced criticism over changes to its Happy Meal toy partnership and confusion regarding new features on its McFlurry cups.
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