French fries take a hit as dining out drops

Slow sales at fast-food chains are hurting not just restaurants, but also their suppliers as inflation-weary customers are increasingly pulling back on eating out. This is impacting french fry suppliers.

Fries company Lamb Weston is closing a plant in Washington and laying off nearly 400 of its 10,700 workers to save $55 million in fiscal 2025. Its stock has dropped 35% this year.

The largest fries producer in North America saw a 1% drop in sales and a 46% decrease in net income in the first quarter of 2024.

Since dining prices continue to climb, people either decide against their side order of fries or prefer to buy groceries and cook at home.

Fast-food chains reported customer traffic declines of 3.5% and 2.5% in Q1 and Q2 of this year, respectively, according to Revenue Management Solutions.

To increase sales and foot traffic, several restaurants, including Dunkin Donuts, Burger King, Taco Bell, Wendy’s, and Subway, are offering value meals. These meals often include small fires.

Reduced quantity means lower orders for Lamb Weston, which says about 80% of fries in the US are consumed at fast-food outlets, and fewer people buy fries at home.