Boycott Impacts McDonald's, Starbucks Amid Israel-Hamas War

Facts

• The war in the Middle East is reportedly affecting US-headquartered international corporations as at least two of the country's biggest restaurant chains saw sales figures impacted by political boycotts last year.¹
• McDonald's missed its quarterly objective for the first time in four years from October through December as sales grew 0.7% — and not 5.5% as the market expected — in the Middle East, China, and India.²
• McDonald's shares fell nearly 4% following the release of these sales figures on Monday. Starbucks, which is also battling union problems in the US apart from the boycott, saw shares slide 2% last week.³
• The Middle East accounts for around 10% of McDonald's roughly 18K international restaurants and 12% of sales by licensees, company filings show.⁴
• Some brands have blamed 'misinformation' about their positions on the Israel-Hamas war as a reason for their boycott. McDonald's doesn't expect conditions to improve in the near term.⁵
• Other US brands facing a boycott related to the Middle East include Domino's, Papa John's, and Burger King. Some of their earnings reports will be out only by the end of this month.¹

Sources: ¹CNBC, ²Al Jazeera, ³Middle East Eye, ⁴WSJ and ⁵Business Insider.

Narratives

• Pro-establishment narrative, as provided by The Conversation. Boycotting Western brands is hardly a new political tactic and has long been used during the turbulent history of the Middle East. But case studies show that such grassroots efforts — ranging from Pro-Palestinian initiatives on the left to 'anti-woke' boycotts on the right — don't move the needle much when it comes to corporate bottom lines in the long run. The global economic system will continue to function as normal.
• Establishment-critical narrative, as provided by Dailynewsegypt. Grassroots collective action is turning real, which is an ominous sign for the West and its big business. A whole new generation is playing an increasingly active role in the Muslim world. The boycott movement is being fueled by ordinary men and women, especially youth, making intentional choices about their consumption. Western corporations will continue to feel the effects of these movements as they shake the foundation of the 'rules-based order.'

Predictions