A major supplier of French fries to McDonald’s cut jobs and abruptly closed a factory as cash-strapped fast-food customers downsized their meals — or skipped side dishes altogether — amid inflated prices.

To combat slowing sales, the fast-food giant launched a $5 Meal Deal this summer, which includes a McDouble or McChicken, a four-piece nugget, a small fries and a small fountain drink.

Rivals like Burger King and Wendy’s offered similar deals, most of which included small fries.

But the popularity of the value meals has resulted in a decline in overall demand for fries, according to the CEO of Lamb Weston, the largest producer of fries in North America.

“Many of these promotional meal deals are moving consumers from medium frying to small frying,” says Tom Werner, whose company supplies about 80% of the fries sold in fast-food chains in the US.

However, inflation-hit consumers have sharply pulled back their spending at fast-food restaurants, with many opting to cook at home.

Those who do eat out have seen menu prices rise, especially in California after the state implemented a $20 per hour minimum wage for fast food workers on April 1.

McDonald’s U.S. same-store sales fell 0.7% last quarter compared to the same period a year earlier.

The hamburger and fries company is Lamb Weston’s largest customer. Problems with the golden arches mean trouble for Lamb Weston.

Although Lamb Weston also supplies higher-end restaurants and supermarkets, it is heavily dependent on its fast food business.

Lamb Weston shares are down almost 35% this year.

Last week, Lamb Weston announced it would cut 4% of its global workforce and trim production lines after a dismal earnings report, as first reported by CNN.

The Eagle, Idaho-based company closed a factory in Connell, Washington, on short notice, leading to the loss of 375 jobs, according to NBC NonStop Local.

“Restaurant traffic and demand for frozen potatoes remain weak relative to supply, and we believe they will remain weak for the remainder of fiscal 2025,” Werner said during an earnings call.

“Together, we expect these actions will help us better manage our plant utilization levels and alleviate some of the current supply-demand imbalance in North America.”

The fries supplier’s net sales fell 1%, operating income fell 34% and net income plummeted 46%, all compared to the same period a year earlier.

Lamb Weston did not immediately respond to requests for comment.