McDonald’s and Starbucks have recently reported declines in sales and profits, and both companies are attributing these weak results to boycotts by supporters of Palestine amid Israel’s war in Gaza. While the companies also cite other factors such as currency fluctuation and consumer reaction to rising menu prices, the CEOs of both corporations have specifically mentioned the conflict in Gaza as a contributing factor to their businesses’ problems.
Boycott, Divestment, Sanctions (BDS), a Palestinian-led movement opposing Israel’s occupation and apartheid in Palestine, celebrated the dip in McDonald’s earnings on social media, using the hashtag #BDS. Although McDonald’s is not officially on BDS’s list of targeted boycotts, the movement considers it a grassroots movement that started after the chain’s Israeli franchises supported the Israeli military during its incursion on Gaza.
Starbucks Workers United, the union representing over 10,000 Starbucks employees, expressed solidarity for Palestine in a now-deleted tweet. Starbucks responded by suing the union, claiming that the tweet damaged its reputation and misled consumers into thinking the company supported Palestine. The lawsuit gained widespread attention online, leading to calls for a boycott of the chain.
McDonald’s Israeli franchisee announced on social media that it had donated and continues to donate tens of thousands of meals to the Israel Defense Forces (IDF) and other organizations. This announcement sparked calls to boycott McDonald’s, particularly in Muslim-majority countries such as Pakistan and Kuwait. The boycotts had a significant impact on sales in the Middle East, leading McDonald’s to repurchase its 225 restaurants in Israel.
During earnings calls, both McDonald’s CEO Chris Kempczinski and Starbucks CEO Laxman Narasimhan mentioned the conflict in Gaza as a factor affecting their businesses. Kempczinski specifically noted that several markets continue to be negatively impacted by the war in the Middle East, while Narasimhan referred to headwinds persisting in the Middle East, Southeast Asia, and parts of Europe due to misperceptions of their brand.
The CEOs’ statements suggest that the boycotts and negative perception of the companies’ stance on the conflict in Gaza have had a tangible impact on their sales and profits. The conflict has led to a divide among consumers, with some supporting the boycotts and others opposing them.
It is worth noting that both McDonald’s and Starbucks have faced criticism and calls for boycotts in the past due to various controversies. These recent boycotts related to the conflict in Gaza add to the challenges faced by the companies in maintaining their global market presence.
In conclusion, the boycotts by supporters of Palestine amid Israel’s war in Gaza have had a significant impact on the sales and profits of McDonald’s and Starbucks. Both companies have cited the conflict as a contributing factor to their weak results. The boycotts highlight the ongoing division among consumers regarding the Israeli-Palestinian conflict and its implications for global corporations.