McDonald's sales growth in the Middle East, China and India was at 0.7% in the Q4 of 2023 - well below its targets and market expectations. Image: Getty.
McDonald’s has reported its first quarterly sales target miss in nearly four years due to weak growth in its international business division amid anti-Israel boycotts in Australia and around the world.It’s one of several global and Australian brands that have been targeted by boycott campaigns over their perceived pro-Israel stances and franchises in other Muslim countries, run by independent owners, have distanced themselves from pro-IDF initiatives.McDonald's shares fell about 4 per cent earlier this month after McDonald’s CEO Chris Kempczinski acknowledged it was seeing an impact on business due to “misinformation”.In a LinkedIn post in early January he wrote: "Several markets in the Middle East and some outside the region are experiencing a meaningful business impact due to the war and associated misinformation that is affecting brands like McDonald's.""This is disheartening and ill-founded."In every country where we operate, including in Muslim countries, McDonald's is proudly represented by local owner operators."On Monday, Kempczinski said sales growth in the Middle East, China and India, was at 0.7% in the fourth quarter of 2023 - well below its targets and its market expectations.He said the biggest impacts were in the Middle East and that "so long as this war is going on... we're not expecting to see any significant improvement”. In Western countries where sales growth was also weaker than expected, Kempczinski blamed, in part, low-income customers buying less food or ordering cheaper items. Australian menu prices rose by 8 per cent between August 2022 and June 2023. Calls to boycott the chain have echoed across the world after McDonald’s Israel reportedly posted a series of Instagram tiles, that have since been deleted or set to private, saying it “intended to donate thousands of meals every day to soldiers in the field and in drafting areas”. It also reportedly offered 50 per cent discounts to IDF personnel in its restaurants. Those calls to boycott have been loud in Australia where there are about 1000 McDonald’s stores out of a global total of 40,000.The Palestinian-led Boycotts, Divestment, Sanctions movement and the Australian Stand For Palestine movement have called for boycotts on dozens of brands and companies for being pro-Israel, including Australia’s own Chemist Warehouse and Spotlight Group, which includes brands Spotlight, Anaconda and Harris Scarfe. Jeremy Leibler, a director of the Spotlight Foundation, is also president of the Zionist Federation of Australia. They haven’t yet reported impacted sales impacts, and it’s hard to measure with any certainty the effect these boycotts are having on these companies’ bottom lines, but McDonald’s is the second to attribute a loss to Israel’s war on Gaza, after Starbucks, which just last week cut its sales targets and warned of a weaker second quarter due to fewer customers visiting its Middle East stores. Aleksandra Bliszczyk is the Deputy Editor of VICE Australia. Follow her on Instagram.See more from Australia Today on vice.com and on TikTok.
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