ALBAWABA - Lamb Weston Holdings, the American food processing company and one of the world's largest producers and processors of frozen French fries, waffle fries, and other frozen potato products, said that recent protests actions against fast food restaurants are negatively impacting the supplies and sales of French fries in the company.
People in the US are not buying French fries
Lamb Weston, a leading producer of French fries in North America and a major supplier to fast food chains, restaurants, and grocery stores, announced the closure of one of its Washington plants. This decision led to the layoff of nearly 400 employees (4% of its workforce) and a temporary reduction in French fry production lines due to ongoing low customer demand.
It is worth noting that Lamb Weston (LW) shares dropped approximately 35% this year, as the company faces oversupply and weak demand. Additionally, rising prices at fast food restaurants further contributed to the challenges the company is experiencing.
McDonald’s and other fast-food restaurants offer new discounted meals
On the other hand, McDonald’s and other fast-food chains introduced new lower-priced meals and menus to attract customers, as they have seen a significant decline in restaurant visits and sales.
Customers traffic to fast-food chains and restaurants in the US declined by 2% in the current quarter and about 3% in the previous quarter of 2024, highlighting the impact on Lamb Weston’s sales decline. (Shutterstock)
Recently, McDonald’s launched a $5 meal that includes a McDouble burger or McChicken, small fries, a four-piece chicken tender, and a small soda.
Thomas Werner, CEO of Lamb Weston, said: “Many of these promotional meal deals have consumers trading down from a medium fry to a small fry.”
Notably, as McDonald’s sales decline, so do Lamb Weston’s, as McDonald’s is considered Lamb Weston’s largest customer, accounting for about 13% of its sales.
McDonald’s sales declined by approximately 0.7% in the fourth quarter of 2024 compared to the same period last year, driven by fewer customers visiting the chain and purchasing meals, according to CNN.
As per a recent analysis by Placer.ai, customers traffic to fast-food chains and restaurants in the US declined by 2% in the current quarter and about 3% in the previous quarter of 2024, highlighting the impact on Lamb Weston’s sales decline.
