The largest North American producer of french fries is shutting down its plant in Washington and laying off hundreds of employees, company officials announced in a recent earnings report.

Lamb Weston Holdings, Inc. president and CEO Tom Werner cited “soft” restaurant traffic and frozen potato demand in an October 1 press release detailing the business’s failures in the first quarter of Fiscal Year (FY) 2025. 

Compared to the first quarter of FY 2024, Lamb Weston’s net income declined by 46 percent to $127 million, the company highlighted. 

According to Werner, “key actions” to restructure the business include closing its “older, higher-cost” facility in Connell, Washington, which would reduce its total workforce by approximately four percent.

That means 375 workers will be out of a job, Fox Business reported. 

“We delivered first quarter financial results that were generally in line with our expectations, driven by sequentially improved volume performance, solid price/mix, and strict management of operating costs,” Werner said. “However, 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.”

Closing the Connell plant is part of “proactive steps designed to improve our operating efficiency, profitability and cash flows, while also positioning us to continue to make strategic investments to support our customers and create value for our stakeholders over the long-term,” the CEO explained. 

Idaho-based Lamb Weston is a “major” supplier of french fries to restaurants such as McDonald’s, Fox Business noted. 

Fast food prices have already soared 33 percent since 2019, according to Department of Labor data released in August. During that same period, grocery costs increased by 26 percent. 

To increase foot traffic, McDonald’s launched a new $5 “Meal Deal” over the summer that includes a McDouble burger or McChicken sandwich, four-piece chicken nuggets, small fries, and a small drink.

Competitors like Burger King and Wendy’s have also rolled out similar bargains that come with fries, but Werner said people are just not buying fries like they used to. 

“It’s important to note that many of these promotional meal deals have consumers trading down from a medium fry to a small fry,” the CEO told Fox Business.