McDonald's sales dip amid Middle East boycotts over Gaza conflict
The worldwide sales for McDonald's establishments grew 3.4% from October to December of 2023, which fell short of the predicted 4.7% increase. As highlighted by the Reuters agency, this downtrend signifies the most modest results for the burger giant since October 2020, aligning with the onset of the COVID-19 pandemic and resultant lockdowns.
4 Feb 2024 | updated: 7 March 2024 09:13
The CEO, Chris Kempczinski, acknowledges that the slump is caused by the boycotts taking place in the Middle East, and also in locations such as Malaysia, Indonesia, and France. As emphasised by the Egyptian newspaper 'Ahram', these are nations in which Muslims represent the majority, or a predominantly large minority.
The boycott is a reaction to McDonald's accused pro-Israeli stance in these territories. This was set in motion when a franchisee in Israel proposed complimentary meals for service-people. This was met with restaurant operators in Arab territories boosting their contributions towards humanitarian aid for Palestinians in the Gaza Strip, an area where Tel Aviv is engaged in conflict against Hamas. A staggering 25,000 civilian lives have been claimed by this conflict thus far.
McDonald's does not expect improvement whilst Gaza conflict continues
Whilst discussing with Reuters, Kempczinski confessed that until the Gaza conflict ceases, the franchise does not anticipate "any significant improvement" in markets where it is subject to boycott. Simultaneously, shareholders disclosed to the agency that their chief concern is the affirmation of the corporation's decline in profits as a result of this hostility.
It's noteworthy that the burger giant, McDonald's, experienced a more prosperous year in 2023 than the prior year. "Yearly revenue increased by 8% reaching to $6.41 billion (£4.84 billion). The forecasted revenue was $6.45 billion (£4.87 billion), as stated by a survey from the London Stock Exchange Group," according to 'Puls Biznesu'.
McDonald's isn't alone in its difficulties, as it isn't the sole Western chain subject to boycott. Come the close of January, Starbucks had re-adjusted its sales forecasts for 2024 downwards. In addition, protests outside U.S. coffee shops were responsible for limiting sales.
