MCDONALD’S EXPECTS OVERSEAS SALES TO DECLINE MORE DUE TO BOYCOTTS

Fri 15 March 2024:

McDonald’s international sales will fall sequentially in the current quarter, pressured by the conflict in the Middle East, in reference to the boycott campaigns due to Israel’s war on Gaza, and demand weakness in China, CFO Ian Borden said yesterday, sending its shares down two per cent in early trade, Reuters reported.

First-quarter comparable sales in McDonald’s International Developmental Licensed Markets segment will be “slightly lower” than the prior three-month period, Borden said at the UBS Global Consumer and Retail Conference.

In February, the company widely missed Wall Street estimates for fourth-quarter sales in the segment, partly due to protests and boycott campaigns against several Western brands over their pro-Israel stance.

“We continue to deal with the impacts of the war in the Middle East. But we’re also seeing what I would call a sluggish start in China this year,” Borden said.

Global businesses such as McDonald’s are also grappling with weak demand in China as employment issues, a deepening property crisis and economic uncertainties put a damper on consumer sentiment.

McDonald’s and other international brands were subjected to a campaign of anger in the Arab world and in the Western world, over their support for Israel’s war on Gaza.

After 7 October, when Israel launched its bombing campaign on Gaza, the fast food chain’s Israel franchise offered free food to Israeli occupation forces fighting in Gaza, and provided discounts to service personnel.

Since October 7, McDonald’s franchisee in Israel has repeatedly donated free meals and drinks to the Israeli army.

In response, the Boycott, Divestment and Sanctions Movement (BDS) supported including the multinational fast food chain on the list of boycott over their “complicity in the genocide and apartheid that Israel is committing against the Palestinians”.

-MEMO

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