Gaza War Fails Optimistic Expectations for McDonald’s

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For the second time within a month, McDonald’s reveals the extent to which its markets in the Middle East and beyond have been affected by the consequences of the Israeli war on the Gaza Strip.

The link between the Gaza war and the company dates back to last October 10, when the McDonald’s Israel page published pictures of the distribution of free meals to the Israeli army.

Despite repeated statements by the parent company’s management that it has no relationship with McDonald’s Israel’s move, the published photos prompted Arab and Islamic countries to announce a boycott of the restaurant chain.

On Monday, the company announced its failure to achieve a major sales target, due to customers boycotting it due to accusations against the chain regarding its support for Israel.

McDonald’s is one of many Western companies, including Starbucks and Coca-Cola, that have witnessed boycotts and protests against it by anti-Israel activists.

The company said the conflict between Israel and Gaza “significantly impacted performance in some foreign markets” in the fourth quarter of 2023.

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In the branch that includes sales in the Middle East, China and India, sales growth reached 0.7 percent in the fourth quarter of 2023, which is much lower than market expectations of 5.5 percent.

In statements accompanying the company’s disclosure on the New York Stock Exchange, Chris Kempczinski, the company’s CEO, said: “As long as this war continues… we do not expect to see any significant improvement in these markets.”

On January 4, the CEO of McDonald’s wrote a post on LinkedIn in which he attributed the war on Gaza and misinformation as two main reasons for the decline in the restaurant’s sales in the Middle East and beyond.

He said at the time: “McDonald’s sales in the Middle East and some outside the region were greatly affected due to “misinformation” about the company’s position on the conflict between Israel and Hamas.”

He added: “This is frustrating and baseless. In every country we operate in, including Islamic countries, McDonald’s is proud to be represented by local owners who work tirelessly to serve and support their communities.”

Last November, the Boycott, Divestment and Sanctions (BDS) movement urged people to reject McDonald’s because of its “open support” of the Israeli military.

Last week, Starbucks lowered its annual sales forecast, partly due to a decline in the number of customers visiting stores in the Middle East.