McDonald’s quarterly profit dips amid boycott calls over Gaza conflict

McDonald’s faces backlash from its franchises in some Muslim countries in October following a move by the company’s Israeli restaurants to give free meals to the Israeli military

McDonald’s Corporation experienced a downturn in quarterly profits, falling short of expectations for the first time in two years, the company announced Tuesday.

This decline comes amid a global boycott campaign targeting the fast-food chain because of its association with the conflict in the Gaza Strip.

 

Western brands like McDonald’s and Starbucks have faced protests and boycott campaigns against them over their perceived pro-Israeli stance.

Last quarter, Starbucks cut its annual sales forecast, partly hit by lower sales and traffic at stores in the Middle East.

While global comparable sales showed a modest increase of nearly 2% in the first quarter, marking 13 consecutive quarters of positive growth, McDonald’s faces challenges in international markets, especially those impacted by the Gaza conflict.

“Global comparable sales increased 1.9%, reflecting positive comparable sales in the U.S. and International Operated Markets segment. Comparable sales in the International Developmental Licensed Markets segment were slightly negative as the segment continued to be impacted by the war in the Middle East,” the company noted.

“The continued impact of the war in the Middle East more than offset positive comparable sales in Japan, Latin America and Europe,” it added.

The boycott stems partly from Alonyal Limited, the operator of McDonald’s in Israel, distributing thousands of free meals to Israeli forces following attacks by Tel Aviv on Gaza, resulting in the loss of over 34,000 lives, primarily civilians, including women and children.

McDonald’s CEO Chris Kempczinski acknowledged earlier this year that the conflict has adversely affected the brand, leading to a decline in sales in Muslim-majority countries.

In December, McDonald’s Malaysia sued a movement promoting boycotts against Israel for “false and defamatory statements” that it says hurt its business.

Source: Newsroom