CNN – Lamb Weston, the largest producer of french fries in North America and a major supplier to fast-food chains, restaurants and grocery stores, is closing a production plant in Washington state.
The company announced last week that it would lay off nearly 400 employees, or 4% of its workforce, and temporarily cut production lines in response to slowing customer demand.
Shares of Lamb Weston (LW) have dropped 35% this year.
Restaurant prices in recent years have increased faster than grocery store prices, leading customers to pull back at fast-food chains.
This shift has taken a toll on Lamb Weston because people are less likely to cook french fries at home.
Around 80% of french fries consumed in the United States come from fast-food chains, according to Lamb Weston.
Fast-food chains like McDonald’s are dangling value menus to try to lure customers back.
McDonald’s has launched a $5 meal, which includes a McDouble cheeseburger or a McChicken sandwich, small french fries, 4-piece chicken nuggets and small soft drink.
But these deals aren’t helping Lamb Weston because people are buying smaller portions of fries …
