Global brands still can’t shake Israel boycotts hitting Starbucks, McDonald’s

Analysis

Samuel Wendel

Aug 18, 2024

Pro-Palestinian activists and supporters wave flags and hold placards along with a Guy Fawkes mask as they walk past a McDonald's during a protest in central London on March 30, 2024, calling for a cease-fire in the Israel-Hamas conflict. — BENJAMIN CREMEL/AFP via Getty Images

Middle East turmoil continued to haunt the financial reports of key global brands during the summer 2024 earnings season, setting up a lost year of sales in a broader region of roughly 500 million consumers.

Q2 2024 saw players like McDonald’s and Starbucks citing ongoing “headwinds” or the “impact of the war” in the Middle East as they delivered disappointing overall results. That corporate doublespeak is referencing consumer boycotts that sprang up in late 2023 amid public anger over US support for Israel’s military operation in Gaza.

Consider KFC, which reported on Aug. 6 that same-store sales fell 3% in Q2, with the CEO of Yum! Brands, which owns the fried chicken chain, saying this was “largely on account of scattered pockets of weakness in a number of markets relating to the Middle East conflict,” alongside underperformance in the United States.

Overall, companies in the crosshairs are sharing few details on how boycotts are impacting them big picture, but they join broader challenges weighing on their bottom lines — from inflation-weary consumers to China’s faltering economy. Those are all combining to deliver real industry upheaval. Starbucks, for instance, sacked its CEO Laxman Narasimhan on Aug. 13, replacing him with Chipotle's Brian Niccol (also somewhat notable, as the popular Mexican-style food chain recently began expanding in the Middle East).