McDonald's Blames Israel-Hamas War For The Dip In Sales Target

McDonald’s stated that Israel’s war on Gaza is the reason behind the loss of its first quarterly sales target in nearly four years. CEO of the American fast-food chain Chris Kempczinski said that the Israel-Hamas war had had a “disheartening” effect on sales in Middle Eastern countries and other Muslim majority nations like Malaysia and Indonesia.

In a conference call, Kempczinski said, “So long as this conflict, this war, is going on … we’re not expecting to see any significant improvement in this”. He called Israel’s war on Gaza as a “human tragedy” and added that the war does weigh on brands like McDonald’s.

Sales growth of McDonald’s division for the Middle East, China, and India during October to December reached 0.7 percentage, which is huge dip from the market expectation of 5.5 percentage.

A massive boycott calls against McDonald’s raise after the fast-food giant’s Israeli franchisee donated thousands of free meals to the Israeli occupation force deployed at Gaza.

After receiving boycott calls from Muslim countries, McDonald’s franchisee of Qatar, Saudi Arabia, Oman, Kuwait, the United Arab Emirates, Jordan, Egypt, Bahrain, and Turkey distanced themselves from the Israeli franchisee’s move and collectively pledged millions of dollars in aid to Palestinians in Gaza.

Later on, McDonald’s Malaysia has sued boycott movement (Boycott, Divestment, Sanctions (BDS)) against Israel claiming the protests hurting its business sentiments with “false and defamatory statements”.

Last month, Chris Kempczinski said that the Israel-Hamas war and its “associated misinformation” has business sentiments of McDonald’s. He said, “several markets in the Middle East and some outside the region are experiencing a meaningful business impact due to the war and associated misinformation that is affecting brands like McDonald’s”.

Apart from McDonald’s, another company that faced huge loss over the boycott calls in relation with their stance on the ongoing Israel-Hamas war was Starbucks. The Seattle-based coffee chain CEO, Laxman Narasimhan said that the boycott calls have been “influenced by misrepresentation on social media”. Last week, the café chain slashed its annual sales forecast, and cited a slump in business in the Middle East.

However, despite the flagging fortunes in the Muslim nations, McDonald’s had a relatively strong result overall, with global sales growing 3.4 percent, when compared to the 8.8 percent in the previous quarter. “We remain confident in the resilience of our business amid macro challenges that will persist in 2024”, said Chris Kempczinski.

With inputs from agency.