Above photo: Asia News.
Other western chains like Starbucks are also feeling economic blowback over their pro-Israel stance.
The sales pace is the slowest since the fourth quarter of 2020, below the average estimate of analysts.
Global same-store sales only rose 3.4 percent during the final business quarter of 2023, well below Wall Street’s expected 4.7 percent increase.
Sales expectations were lowered following comments made by McDonald’s CEO Chris Kempczinski in January, when he stated that markets in West Asia and others outside of the region were facing a “meaningful business impact” because of the war between the Palestinian resistance and Israel.
Kempczinski also noted that “associated misinformation” regarding the company was a reason for the financial issues the brand is facing, adding that misinformation surrounding McDonald’s was “disheartening and ill-founded.”
McDonald’s says it has assisted certain franchisees, including relief from royalties, that have been affected as a result of Israel’s war on Gaza.
The company is optimistic about its 2024 outlook; however, Kempczinski said that McDonald’s is “confident in the resilience of our business amid macro challenges that will persist in 2024.” The fast-food giant expects similar sales growth in 2024 to moderate toward more “normalized” trends.
Starbucks, another company on boycott lists, also had a weak quarterly report. The company missed Wall Street’s estimates and lowered its full-year sales outlook, which its executives call “transitory.”
The Seattle coffee brand’s shares fell 14 percent over last year, sinking the company’s market cap to about $104.5 billion.
CEO Laxman Narasimhan said the chain faced “headwinds” that included boycotts and increased competition by rivals in China.
A report by Bloomberg Intelligence showed that the effects of mass boycotting of Starbucks will have the company feel an economic toll into 2024; they also show that public outcry against the coffee chain increased significantly following the start of the war between Palestinian resistance forces and Israel.
“The Bloomberg Intelligence report found that social media posts calling for boycotting Starbucks jumped to an average of 466,000 a month in the fourth quarter, compared to 3,200 the rest of the year,” the report says.