What Do French Fries Say About the State of the Economy?
October 5, 2023
When faced with the question “Do you want fries with that?” Americans are resoundingly answering “yes,” which may be a promising sign for the economy.
Lamb Weston Holdings, a supplier of the frozen potatoes that end up as french fries, told analysts at a recent earnings call the “fry attachment rate,” which tracks the rate at which consumers order fries at restaurants, has remained above pre-pandemic levels. This could indicate resiliency among consumers, even as inflation stretches household budgets and fears of an economic slowdown build.
When consumers feel financial pressures, they frequently cut back on discretionary spending, such as a side of fries for the table at a sit-down restaurant or “supersizing” their fast food combos. French fry sales declined by 6% during the Great Recession, outpacing declines in broader categories like restaurant spending.
Of course, just because consumers are continuing to buy fires does not mean they are not changing their spending habits. Lamb Weston saw little change in total sales across major U.S. markets, but they did find evidence of changing consumer behavior. Sales at full-service and casual dining restaurants declined, but the dip was offset by increased sales at fast food providers, which tend to be cheaper. Lamb Weston suspects that “restaurant traffic trends will be volatile in the near term as high-interest rates, high inflation, and uncertainty continue to affect consumers.”