McDonald’s CEO says sales decline linked to Muslim boycott over Gaza

McDonald’s has reported its first decline in global sales since the Covid-19 pandemic, largely due to a boycott campaign initiated by Muslims and pro-Palestine campaigners amidst the ongoing genocide in Gaza.

The US fast food giant saw a one per cent drop in worldwide sales in the second quarter, attributing the decline to reduced demand in international markets, particularly in France, which has a significant Muslim population.

“France is one of the markets that has a higher Muslim population,” said CEO Chris Kempczinski on Monday. “The impact we’re seeing in France has been more significant because of that population.”

He attributed the sales loss to “misinformation” and insisted that the chain is committed to supporting local communities, including Muslims.

The company noted a 1.3 per cent sales decrease in emerging markets, influenced by the war in Gaza and economic conditions in China. The US market experienced a 0.7 per cent drop, despite price increases.

McDonald’s reports a global drop in sales for the first time in over three years!#BDS is working!

McDonald’s Israel provided free meals for Israel’s forces during #GazaGenocide against 2.3 million Palestinians, and the company with its dozens of branches has for decades fed… pic.twitter.com/7z0qRO8Tdg

— BDS movement (@BDSmovement) July 30, 2024

In response to the boycott, McDonald’s is offering support to its franchisees in affected regions, including royalty relief and deferral of cash collection. The current boycott campaign was sparked after McDonald’s Israeli franchisee provided free meals to occupation soldiers following the Palestinian resistance groups’ cross-border incursion in October last year.

The Palestinian-led Boycott, Divestment and Sanctions (BDS) movement called for the global boycott of McDonald’s, accusing the chain of supporting Israeli actions. “McDonald’s is now really feeling the BDS heat,” BDS co-founder Omar Barghouti was quoted as saying.

Following the global backlash, McDonald’s has also acquired all 225 restaurants in Israel from its franchisee, Alonyal Limited, in response to the boycott calls. This acquisition is unusual as McDonald’s typically operates through third-party franchisees.

The company’s share price has dropped nearly 11 per cent since January, underperforming the S&P 500 index’s 15 per cent gain.

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