McDonald’s, one of the main restaurant chains on the planet, suffered an impact on its sales in the last part of 2023 due to the boycott and pro-Palestinian protests in different parts of the world, as it acknowledged this Monday when publishing its quarterly results.
The chain has been pointed out as favorable to Israel and the government of Beniamin Netanyahu, a factor that suffers more in franchises in Muslim countries and that has been transferred to the accounts and the stock market.
McDonald’s comparable sales grew 3.4% in the fourth quarter, the slowest pace since late 2020 and worse than analysts expected. Last year the progress was triple. In the franchised markets the rebound is just 0.7%, “reflecting the impact of the war in the Middle East,” he points out in a statement.
The company’s executive director, Chris Kempczinski, acknowledged this Monday that the company has suffered a drop in sales in Islamic countries such as Indonesia and Malaysia, or in other European countries such as France, a country with the largest Muslim population in Europe, according to Statista. The Middle East accounts for about 10% of the company’s revenues, Bloomberg reports, which were below what the market expected.
McDonald’s shares fell 3.7% after the accounts were published, one of the steepest declines on Wall Street, and Kempczinski himself warns that the situation will not improve in Muslim countries in the coming months.
For McDonald’s it all started when the owner of the franchise in Israel, Alonyal, announced shortly after the war in Gaza began that he was going to supply free of charge to Israeli soldiers and all those who were on the front lines of the conflict. Almost immediately a reaction from public opinion arose and, hand in hand, calls for a boycott began from several countries. In Oman, the local franchise announced donations to Gaza.
Although the company has declared that the initiatives of its franchisees do not respond to a central action plan of the parent company, the fast food chain has long been among the companies targeted by the pro-Palestinian BDS (boycott, divestment, sanctions) movement. . “As long as the conflict continues, we do not expect to see any significant improvement,” the brand acknowledges. For the year as a whole, revenue reached 25.5 billion dollars – about 23.8 billion euros -, 10% more than last year, while profit reached 8.486 billion, 37% more, close to 7.9 billion. euros.
Despite this, McDonald’s continues with its strong commitment to expansion, with an eye on Asia. The Chicago-based company seeks to open about 1,000 restaurants in China this year, matching the pace of new store openings in 2023, a record in the country. “We believe in the opportunity for development and penetration into that market, we are very much on track with our aspirations,” Kempczinski concluded.
