Israel’s war on Gaza: Will the boycott harm American brands? | Business and economic news

McDonald’s has it Missing sales goals The company says this is partly due to boycotts against its products in some parts of the world over their perceived support for Israel.

The war on Gaza “significantly affected” performance in the fourth quarter of 2023 in some regions, company officials said on Monday. Sales growth in the Middle East, China and India reached 0.7 percent during the quarter, which is much lower than expectations.

The fast food company is just one of many American brands that has been subjected to boycotts and protests over its apparent support for the Israeli war on Gaza. Lists of brands accused of supporting Israel are widespread on social media, although the relationships are often not clearly explained. This campaign is part of a larger Boycott, Divestment and Sanctions (BDS) campaign targeting Israel-friendly brands since 2005.

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Here’s a breakdown of how some brands say they’ve been affected so far:

McDonald’s

Fast food giant McDonald’s angered Israel’s critics, especially in the Middle East, when its subsidiary in Israel provided thousands of free meals to Israeli forces in October, the month Israel launched its bombing and ground assault on Gaza, which killed more people. Of 27,000 people.

Since October, activists have called for a boycott of the company around the world. The impact has been most pronounced in the Middle East, where at least 5 percent of McDonald’s franchises are registered. While the growth target for sales in the Middle East, India and China was set at 5.5% in the October-December period, the company achieved growth of 0.7% – and will likely see its sales shrink only in the Middle East. Global sales grew by 3.4 percent in the same period, compared to 8.8 percent in the previous quarter.

Franchises in Saudi Arabia, Oman, Kuwait, UAE, Jordan, Bahrain and Turkey They issued statements distancing themselves From the Free Food Campaign in Israel, they collectively pledged $3 million in aid to Gaza.

CEO Chris Kempczinski said the company does not expect major changes as long as the war continues. “What is happening is a human tragedy, and I think this affects brands like ours,” he said.

Starbucks

Last week, the Starbucks coffee chain lowered its annual sales forecast after declining growth. The company now expects full-year sales — globally and in the U.S. — to grow 4 percent to 6 percent, down from its previous range of 5 percent to 7 percent.

CEO Laxman Narasimhan told reporters that Starbucks had seen a “significant impact on traffic and sales” in the Middle East due to the war in Gaza. Sales also slowed in the United States, where protesters campaigned against the Seattle-based company, demanding that it take a stand against Israel.

Starbucks’ problems began after the Starbucks Workers Union, made up of thousands of baristas at more than 360 American cafes, expressed its support for the Palestinians in a post X days after the outbreak of the Gaza war. The post was deleted less than an hour later.

Starbucks sued the union in an Iowa court for trademark infringement, asking the union to stop using its name and a similar logo. Starbucks said in the lawsuit that the post reflected “support for Hamas” and severely damaged the company’s reputation, adding that it had received more than 1,000 complaint calls. The company also said some of its cafes had been vandalized.

The union opposed this, and asked the federal court in Pennsylvania to rule that the logo could continue to be used. It also accused Starbucks of defamation.

The two sides are engaged in ongoing, fraught negotiations over labor issues with the union demanding better wages and more consistent scheduling for workers.

At the same time, many people in IndonesiaThe country, which has the largest Muslim population in the world, has boycotted Starbucks and McDonald’s since the beginning of the war.

coca cola

The soft drink manufacturer has long been caught in the crossfire of conflict in the Middle East. From 1967 to 1991, the Arab League officially boycotted Coca-Cola over the construction of a bottling plant in Israel.

Now once again, the brand’s red logo appears among lists of brands trending to boycott on social media channels. The company does not appear to have raised any triggers recently, but its past connections to Israel as well as its reputation as an American company appear to be sufficient.

In November, the Turkish Parliament voted to remove the drink from stores and restaurants on its territory. The Coca-Cola distributor in Turkey announced a 22 percent decline in sales in the last quarter of 2023.

Meanwhile, in Egypt, a boycott of Coke and other American soft drinks has revived a 100-year-old local soda brand. Spiro spatiswhich saw an increase in its sales.

domino

Domino’s, a US-based pizza maker with franchises around the world, is also facing negative reactions. Social media posts stated that Domino’s also provided free food to Israeli soldiers although there is no evidence to support these claims.

And in Asia, the brand’s same-store sales decreased 8.9 percent in the second half of 2023, mainly because consumers in Malaysia associate it with the United States, an ally of Israel, a company official said.

Malaysians gathered in their thousands to demand an end to the Israeli war on Gaza. Prime Minister Anwar Ibrahim’s office also announced last December that all ships owned by Israel, flying the Israeli flag, or ships bound for Israel were banned from the port’s docks. The country does not have diplomatic relations with Israel.

“It’s been well publicized that American brands in Asia, and I’m talking largely Malaysia in this case, have been affected by what’s happening in the Middle East right now,” Don Meig, managing director of Domino’s Pizza Enterprises, told analysts.

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