McDonald's sales fall due to Israel boycott - CEO

McDonald’s franchises in the Middle East have experienced a “meaningful business impact” in 2023 from boycotts associated with the Gaza conflict, the fast-food giant’s Chief Executive Officer Chris Kempczinski has said.

In a LinkedIn post on Thursday, Kempczinski lauded the company’s accomplishments over the past year, but admitted that “several markets in the Middle East and some outside the region are experiencing a meaningful business impact” due to the Gaza war and the “associated misinformation.”

“This is disheartening and ill-founded,” he added. “In every country where we operate, including in Muslim countries, McDonald’s is proudly represented by local owner-operators who work tirelessly to serve and support their communities while employing thousands of their fellow citizens.”

The hearts of everyone at McDonald’s are with “the communities and families impacted by the war in the Middle East,” Kempczinski insisted. “We abhor violence of any kind and firmly stand against hate speech, and we will always proudly open our doors to everyone.”

While Kempczinski did not give any estimates of the losses from the boycott, their full extent may be revealed later this month, when McDonald’s is scheduled to issue an earnings report.

McDonald’s found itself in the middle of the Gaza conflict in mid-October, after the company’s franchisee in Israel boasted on social media about giving free means to Israeli soldiers and police.

This triggered franchises in Oman, Türkiye, Saudi Arabia, Lebanon, Kuwait, and the United Arab Emirates to respond by donating to Palestinian causes – and activists across the Muslim world to call for boycotts of the brand. Other Western corporations – Starbucks, Coca-Cola, IBM, Nestle, and KFC, to name a few – have faced similar backlash.

GAR, the McDonald’s franchisee in Malaysia, has responded by suing the Boycott, Divestment and Sanctions (BDS) movement last month for “false and defamatory statements” about the chain. The company has asked for damages for 6 million ringgit ($1.31 million) to compensate for revenue and job losses.

A series of raids by the Palestinian militant group Hamas on October 7 resulted in the deaths of an estimated 1,200 Israelis. West Jerusalem responded by declaring war on the group and proceeding to bomb and invade Gaza. Israeli attacks have since caused over 22,000 Palestinian deaths, according to local health authorities.