Tuesday, June 18, 2024

Polaris of Enlightenment

Tuesday, June 18, 2024

Polaris of Enlightenment

Gaza war causes McDonald’s and Starbucks to lose money

The situation in Gaza

Published 8 February 2024
- By Editorial Staff
McDonald's and Starbucks do poorly in Muslim countries and areas with large Muslim populations.

Two of America’s most recognizable brands, McDonald’s and Starbucks, are facing challenging sales and missed earnings forecasts for the fourth quarter of 2023.

The chains are perceived as strongly pro-Israel during the ongoing war in Gaza and are therefore boycotted by many people in Muslim countries and areas with large Muslim populations.

Fast food chain McDonald’s on Tuesday reported its first quarterly sales decline in nearly four years, according to British state media BBC.

The main reason was weak growth in its international business, particularly in regions with large Muslim populations, which are increasingly boycotting the company.

Sales growth in the Middle East, China and India fell far short of expectations. The impact also extended to Malaysia, Indonesia and especially France, which has the largest Muslim population in Western Europe.

The company’s CEO, Chris Kempczinski, finds the Israel-Gaza conflict and subsequent boycott is “disheartening and ill-founded” and says that “misinformation” is to blame.

– So long as this war is going on… we’re not expecting to see any significant improvement (in these markets), the McDonald’s CEO said.

American giant and coffee chain Starbucks has also announced that it has missed revenue forecasts due to falling sales. Again, boycotts related to the Gaza conflict were cited as the main reason.

The impact of boycotts

Both companies’ sales figures appear to have been affected by weak sales in Muslim-majority countries such as Malaysia and Indonesia. Even in France, where the Muslim population is significant, sales have been negatively affected by the conflict.

Chris Kempczinski emphasized the company’s support for its employees and local communities. Starbucks has acknowledged that boycotts have affected not only the Middle East but also the U.S. market. The war in Gaza has cast a shadow over the company’s success, with several Western brands, including Coca-Cola, facing boycotts and protests over their alleged support for Israel.

In other words, the war between Israel and Gaza has a broad impact, not only on a human and geopolitical level, but also as a serious problem for some of the world’s most prominent brands and their revenues.

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