Customers in many Muslim countries are boycotting US brands over its perceived support for Israel in the ongoing conflict with Hamas. McDonald’s became a particular target after some Israeli franchise holders donated thousands of free meals to the military.
Independent franchise holders in other middle eastern countries including Saudi Arabia, UAE, Egypt and Turkey retaliated by offering millions of dollars in aid to Gaza.
Coke and Starbucks are also being targeted, but McDonald’s is the first to feel the impact on its bottom line. In Q4 2023, the fast food brand missed its sales targets for the first time in four years, recording growth of 0.7%, – well below 5.5% expectations – in the Middle East, China and India. Shares fell 4% on the announcement.
McDonald’s CEO Chris Kempczinski described the conflict’s effect on sales as “disheartening” and admitted he’s not expecting any improvement while the conflict continues.
A statement from McDonald’s added that its thoughts were with the families and communities impacted by the conflict in the region. It said it would “continue to stay focused on supporting our people and the local communities in which we operate”.
The impact is being felt in many Muslim majority countries, including Malaysia and Indonesia. Despite the regional issues, McDonald’s global sales were up 3.4% compared to 8.8% in the previous quarter.
