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McDonald’s CEO says Muslims’ Gaza boycott hurt quarterly sales
BYCHRISTIAAN HETZNER
July 30, 2024 at 8:53 PM GMT+5
McDonald's CEO Chris Kempczinski is losing business in parts of the Middle East and Europe as customers boycott the fast-food chain over Israel's war in Gaza. A boycott sparked by the war in Gaza helped contribute to McDonald's first quarterly decline in same-store sales since the COVID outbreak in early 2020.6 hours ago
On Monday, the fast-food company known for its hamburgers and french fries reported a 1% decline in revenue across all its businesses. But the company pinned the blame on disproportionately lower demand abroad and especially in France, Europe’s third-largest economy behind Germany and the U.K.
Answering an analyst question during an investor call, CEO Chris Kempczinski addressed concerns over specific regional weakness cited in its earnings report. While China suffered from overall weak consumer sentiment, for example, France was more complicated, in his view.
He cited three issues that needed to be tackled to claw back share: The first was an aggressive rival that was competing on price. The second was the return of the €4 Happy Meal ($4.33) to attract the key family demographic as well as a third: its brand positioning.
The problem was that “France is one of the markets that has a higher Muslim population,” Kempczinski said. “And so when you think about the Middle East, the impact that we’re seeing in France has been more than maybe in other markets because of that population.”
“So there’s a lot that the team is looking at doing on, ‘How do we make sure we’re telling our story from a marketing standpoint at the local level?’” he said.
Fortune reached out to McDonald’s for further comment or clarification, but could not immediately reach a company official authorized to speak on its behalf.
France has one of the highest Muslim populations in Europe.
McDonald’s added that international sales in emerging markets saw the biggest percentage decline, at 1.3%, the result of both the war in Gaza as well as declines in China. By comparison, its domestic U.S. market suffered only a 0.7% decrease in like-for-like revenue as price hikes could not offset lower foot traffic.
Feeling the BDS heat’
The national committee of Palestinian-led Boycott, Divestment, and Sanctions (BDS), a nonviolent movement aimed at pressuring Israel over its treatment of Palestinians, thereupon called on consumers worldwide to avoid dining at the fast-food chain. Some lawmakers in the U.S., the U.K., and Israel have accused the group of anti-Semitism, which it denies.The deal is unusual given the chain is overwhelmingly dependent on third parties. According to McDonald’s, franchisees operate roughly 95% of its over 40,000 stores across 100 countries worldwide.
McDonald’s CEO says Muslims’ Gaza boycott hurt quarterly sales
The fast-food chain is losing customers following a boycott centered on its Israeli franchisee.