McDonald's largest fry producer closes factory; CEO blames $5 meals
(NewsNation) — "Do you want fries with that?"
America's largest fast food chain may have a fry issue as its largest supplier shuts off production and cuts costs at its Connell, Washington, plant.
Lamb Weston, an Idaho-based company, announced the closure and a 4% cut in its workforce at the beginning of the month. The news comes as part of a restructuring plan expected to generate nearly $55 million of pre-tax cost savings for the company in 2025.
“Lamb Weston is confident in the world’s ongoing love of fries — the closure of one of our older facilities accounts for less than 5% of our production capacity, so this adjustment simply helps address a current supply-and-demand imbalance,” Lamb Weston spokesperson Teresa Paulsen said in a statement to TODAY.com.
Now, Tom Werner, the CEO of Lamb Weston, is blaming McDonald's $5 meal deal, which was introduced back in May. The meal deal is supposed to provide an affordable option for American families, especially during a time when inflation remains the highest in recent history.
"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,” Werner said.
He said the steps to close one of its plants and cut costs is an effort to remain proactive to improve operating efficiency, profitability and cash flows.