McDonald’s and Starbucks have both seen declines in sales and profits, attributing boycotts by supporters of Palestine during Israel’s war in Gaza as a contributing factor to their weak results.
McDonald’s reported a global sales decline for the first time since 2020, with a 12 percent drop in net profit compared to the same period last year. Starbucks also announced a decrease in North American sales by 2 percent and a 7 percent drop in sales internationally, leading to a 23 percent decrease in total international profits.
While citing currency fluctuations, Chinese market slowdown, and consumer reactions to price increases as reasons for the decline, both CEOs mentioned the Gaza conflict as a challenge the companies are facing.
Boycott, Divestment, Sanctions (BDS) — a Palestinian movement against Israel’s occupation and apartheid — celebrated the impact on McDonald’s earnings, attributing it to their efforts. Although McDonald’s is not on the BDS list of targeted boycotts, the movement sees it as a supporter of Israel due to actions by its Israeli franchises during the conflict.
During earnings calls, McDonald’s CEO highlighted negative impacts from the Middle East conflict on their markets, while Starbucks CEO mentioned similar challenges in regions affected by boycott efforts.
The Starbucks Workers United union expressed solidarity with Palestine in a now-deleted tweet, leading to a lawsuit from Starbucks claiming damage to its reputation. Calls to boycott both companies escalated following their perceived support for Israel during the conflict.
McDonald’s franchisee in Israel’s donation to IDF units sparked further backlash, leading to boycotts in Muslim-majority countries. McDonald’s CEO defended the company in a LinkedIn post, attributing international store hits to misinformation surrounding the conflict.
Rights groups in Muslim-majority nations initiated boycotts, prompting the Pakistani franchisee to distance itself from the issue. McDonald’s eventually repurchased its Israel restaurants after facing significant sales drops due to the boycott.
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