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Economics

Demand for french fries reflects resilient consumer as so-called fry attachment rate holds steady

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12 months ago

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A McDonald’s crew member prepares french fries in Miami, Florida.

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It’s a timeless question at fast-food counters: Do you want fries with that?

Responders continue answering affirmatively at a higher-than-average rate, a top potato supplier indicated. It underscores the resilience of consumer spending, even as inflation pinches pocketbooks and pandemic savings dry up.

A larger share of customers keep adding the iconic side to meal orders than in the past, according to frozen potato supplier Lamb Weston. Looking at the bigger picture, strength in the so-called fry attachment rate bolsters economic data, showing the willingness of average Americans to still shell out for everyday luxuries.

“The fry attachment rate has stayed pretty consistent,” said CEO Thomas Werner during the company’s earnings call on Thursday. “It’s been above historical levels for the past two, three years.”

This is just one example of how consumers keep purchasing despite mounting reasons to tighten purse strings, a phenomenon that’s puzzling economists.

Spending on retail and food services in America topped $700 billion in February, according to advance and adjusted government figures. That’s about 1.5% higher than the same month a year ago. And it’s a whopping 38.5% higher when compared with February 2019.

Rising wages and fiscal stimulus measures padded bank accounts during the early years of the Covid-19 crisis, prompting increased purchasing. But in more recent years, U.S. consumers have felt increasing pressure amid runaway inflation, elevated interest rates and the end of pandemic-era financial benefits.

And experts have been surprised by the unwavering propensity of Americans to use their cash, even as consumer confidence sours and fears of an economic downturn swirl. The choice to add french fries provides one case study of what some have dubbed “YOLO” or “revenge” spending, with the first term named after the acronym for “you only live once.”

Slowdown elsewhere

To be sure, there are signs of financial stress on consumers that impact monetary decisions around food. WK Kellogg CEO Gary Pilnick told CNBC earlier this year that cereal was trending as a dinner alternative while shoppers grappled with higher grocery costs.

Though customers still opt for fries, Werner said Lamb Weston’s volume took a hit nonetheless due to softer foot traffic overall in the restaurants it serves. That slide comes as consumers grow accustomed to increased prices for menu items as a result of inflation, the executive said. (Lamb Weston provides potatoes for large chains such as McDonald’s and Chick-fil-A, though Werner did not specify which companies are experiencing slowdowns.)

“On the one hand, fries remain as popular as ever with consumers,” Werner said. “But on the other hand, consumers are going out to eat less often.”

Lamb Weston on Thursday reported adjusted earnings and revenue for the fiscal third quarter that came in below estimates of analysts polled by FactSet. The Idaho-based company’s outlook for full-year performance on both financial measures also missed Wall Street forecasts.

Shares tumbled more than 19% in Thursday’s session, touching lows not seen in more than a year.

Correction: This article has been updated to remove an inaccurate reference to the timing of the Covid pandemic. This article was also updated with the correct spelling of Chick-fil-A.

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Economics

White House denials over the Signal snafu ring hollow

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8 hours ago

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March 26, 2025

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THE ROW over Mike Waltz’s security slip-up rages on. On March 11th America’s national security adviser accidentally added Jeffrey Goldberg, the editor-in-chief of the Atlantic, a magazine, to a group chat on Signal, an encrypted messaging app. Days later Mr Waltz and a succession of American officials including J.D. Vance, the vice-president, Pete Hegseth, the secretary of defence, Tulsi Gabbard, the director of national intelligence, and John Ratcliffe, the director of the CIA, used the group to discuss air strikes on Yemen. How serious a breach was this?

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Economics

Former Treasury Secretary Janet Yellen to join global advisory board for bond giant Pimco

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11 hours ago

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March 26, 2025

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Treasury Secretary Janet Yellen speaking with CNBC’s Sara Eisen (not shown) at the U.S Treasury Department on Jan. 8th, 2024.

CNBC

Former Treasury Secretary Janet Yellen will be joining an advisory board for bond giant Pimco, CNBC has learned.

Joining other prominent officials in the world of economics and finance, Yellen, who also served as Federal Reserve chair, will serve on the board that meets several times a year, according to the report from Leslie Picker.

The advisory board members’ mission, according to the Pimco website, is to “contribute their insights to the firm on global economic, political and strategic developments and their relevance for financial markets.”

Current members include Gordon Brown, the former UK prime minister; ex-White House chief of staff Joshua Bolten; Michèle Flournoy, former defense policy advisor under two U.S. presidents, and Raghuram Rajan, an economist and former governor for the Reserve Bank of India.

In addition, former Fed Chair Ben Bernanke also served as a senior advisor at Pimco, and Richard Clarida, who had served as the central bank’s vice chair, is a managing director in the firm’s New York office.

Yellen served as head of Treasury during all four years of the Biden administration, and before that was Fed chair from 2014-18. She was the first woman to hold the respective posts. Prior to taking the Treasury post, she served a stint as a distinguished fellow at the Brookings Institution think tank.

Pimco, based in Newport Beach, Calif., manages about $2 trillion for clients and once ran the largest bond fund in the world. Yellen has a past with the firm, reporting once that she collected a $180,000 speaking fee at the firm in 2019.

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Treasury Department is set to lay off a ‘substantial’ number of employees, official says

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15 hours ago

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March 26, 2025

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People take pictures of the U.S. Treasury Department building in Washington, D.C., on Feb. 6, 2025.

Mandel Ngan | AFP | Getty Images

The Treasury Department is planning to furlough a “substantial” level of its workforce in conjunction with Elon Musk’s efforts to shrink the size of the federal government, according to a court document.

As part of a complaint in a related case, Trevor Norris, the department’s deputy assistant secretary in human resources, indicated that the layoffs will be coming as part of the Department of Government Efficiency’s ongoing moves to cut the federal employee rolls.

In a sworn statement, Norris said Treasury is wrapping up plans to comply with President Donald Trump’s executive order backing DOGE’s activity. Treasury currently has more than 100,000 employees.

“These plans will be tailored for each bureau, and in many cases will require separations of substantial numbers of employees through reductions in force (RIFs),” Norris said in an affidavit.

The case involves a complaint by the state of Maryland to get a stay on the layoffs. In recent days, three judges have issued restraining orders putting temporary halts on DOGE’s efforts to hit several departments.

“The Treasury Department is considering a number of measures to increase efficiency, including a rollback of wasteful Biden-era hiring surges, and consolidation of critical support functions to improve both efficiency and quality of service,” a Treasury spokesperson said. “No final decisions have yet been made, and any current reporting to the contrary is false.”

Bloomberg News first reported the planned layoffs.

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