Israel’s war on Gaza: Are boycotts hurting US brands?
McDonald’s in the Dubai Arabian Centre
Al Jazeera reports on 6 February 2024:
McDonald’s has missed sales targets partly due to boycotts against its products in some parts of the world over its perceived support for Israel, the company says.
The war on Gaza “meaningfully impacted” performance in the last quarter of 2023 in some regions, company officials said on Monday. Sales growth in the Middle East, China and India stood at 0.7 percent in the quarter, far below expectations.
The fast food company is only one of several United States brands hit by boycotts and protests over their perceived support for Israel’s war on Gaza. On social media sites, lists are going around of brands accused of supporting Israel although the ties are often not clearly explained. The push is part of a larger Boycott, Divestment and Sanctions (BDS) campaign targeting Israel-friendly brands since 2005.
Here’s a breakdown of how some brands say they’ve been hit so far:
McDonald’s
Fast food giant McDonald’s drew the ire of Israel’s critics, especially in the Middle East, when its Israel branch gave thousands of free meals to Israeli troops in October, the month the country launched its bombardment and ground offensive in Gaza, which have now killed more than 27,000 people.
Since October, campaigners have called for a boycott of the company around the world. The impact has been more pronounced in the Middle East, where at least 5 percent of McDonald’s franchises are registered. While the growth target for sales in the Middle East, India and China was set at 5.5 percent from October to December, the company achieved 0.7 percent growth — and likely saw its sales shrink in just the Middle East. Global sales grew by 3.4 percent in the same period, compared with 8.8 percent in the preceding quarter.
Franchises in Saudi Arabia, Oman, Kuwait, the United Arab Emirates, Jordan, Bahrain and Turkey issued statements distancing themselves from the free food campaign in Israel and collectively pledged aid worth $3m to Gaza.
Chief Executive Chris Kempczinski said the company is not expecting significant changes as long as the war persists. “It’s a human tragedy what’s going on, and I think that does weigh on brands like ours,” he said.
Starbucks
Last week, coffee chain Starbucks slashed its annual sales forecast after a slump in growth. The company now expects full-year sales – globally and in the US – to grow from 4 percent to 6 percent, down from its previous range of 5 percent to 7 percent.
CEO Laxman Narasimhan told journalists that Starbucks saw a “significant impact on traffic and sales” in the Middle East due to the war in Gaza. Sales also slowed in the US, where protesters have campaigned against the Seattle-based company, calling for it to take a stand against Israel.