Israel-Gaza Boycotts Impact McDonald’s Sales

McDonald’s has failed to meet a crucial sales target, partly due to a boycott by customers over the company’s perceived support of Israel. This resulted in the fast food giant’s first quarterly sales shortfall in almost four years, primarily due to sluggish growth in its international business division. The company’s shares dropped about 4% following the announcement. McDonald’s, along with other Western corporations such as Starbucks and Coca Cola, has faced boycotts and protests from anti-Israeli activists. The company stated that the Israel-Gaza conflict had significantly affected its performance in some overseas markets in Q4 2023. Sales growth in the division that includes the Middle East, China, and India was a mere 0.7% in Q4 2023, well below market predictions. The company’s operations in Malaysia, Indonesia, and France were impacted, with the Middle East feeling the most significant effects, according to CEO Chris Kempczinski. He also stated that as long as the conflict continues, no substantial improvement is expected in these markets. McDonald’s faced backlash after its Israel-based franchise gave away thousands of free meals to Israeli military members, leading to calls for a boycott of the brand. Franchise owners in Muslim-majority countries like Kuwait, Malaysia, and Pakistan distanced themselves from the company in response. Kempczinski labeled the backlash as “disheartening and ill-founded,” attributing it to “misinformation”. Despite these challenges, McDonald’s global sales grew by nearly 4% in Q4, albeit lower than its annual average. The company saw its strongest sales growth in the US, UK, Germany, and Canada. However, its US business experienced weaker sales growth than anticipated due to lower-income customers ordering less and opting for cheaper menu items. McDonald’s expressed its solidarity with families and communities affected by the conflict in the region and pledged to continue supporting its employees and local communities.