McDonald’s: Israel boycott hurts sales

McDonald’s: Israel boycott hurts sales

McDonald’s failed to reach its sales target, blaming Israel’s war in Gaza for missing the target. The company said same-store sales rose 3.4 percent in the three months, below analysts’ expectations for an increase of about 4.9 percent.

Ian Borden, the company’s chief financial officer, said the war “significantly impacted” the fast food giant’s earnings in the region in the final quarter of 2023.

“The ongoing impact of this war on McDonald’s locations in the Middle East is disheartening and unfounded,” McDonald’s CEO Chris Kempczinski told investors on a quarterly conference call.

“Obviously we’re seeing the most significant impact in the Middle East,” CEO Kempczinski said, but acknowledged that customers in major Muslim markets such as Malaysia and Indonesia were also staying away due to the boycott.

Muslim consumers stay away

The fast food chain’s loss of reputation is being felt wherever there are significant Muslim communities. Authorities noted that some effects were also seen in European countries with dense Muslim populations, such as France.

The company declined to release a figure for lost sales from the war, but told investors “you can infer that the impact is significant.”

Calls for a boycott against the fast food giant began in October after its Israeli branch announced it would donate thousands of free meals to Israeli soldiers participating in the Gaza offensive.

McDonald’s Israel also angrily denied what it called “fake news” that it contributed to “Palestinian organizations.”

Hoping to ward off consumer backlash, branches in many Arab countries have distanced themselves from the Israeli branch, and some have announced humanitarian aid donations to Gaza.

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