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McDonald’s Is Losing Revenue Because of Boycotts From Muslim Countries

McDonald’s said that because of perceived support of Israel, people from the Middle East and from other Muslim countries are boycotting the brand and this causes a “meaningful” hit to business.

While blaming the backlash on “misinformation”, Chief executive Chris Kempczinski admitted the influence of the war in a LinkedIn post.

He is trying to deal with the business toll sparked by the Israel-Gaza war tension as he is the second boss of a major US firm.

“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,” Mr Kempczinski said in the message.

“In every country where we operate, including in Muslim countries, McDonald’s is proudly represented by local owner operators.”

McDonald’s depends on thousands of individualistic businesses to own and run more than 40,000 stores around the world. About 5% of its stores are situated in the Middle East.

The McDonald’s corporate headquarters has always tried to keep a low profile about the strife, especially since Hamas bombarded Israel on 7 October.

But its brand has still been stuck in the fight and affected by the conflict. Similar to Starbucks, which has also been influenced.

McDonald’s in Israel claimed it had given away thousands of free foods to soldiers of the Israeli army in the weeks following the bombs.

People of Gaza who have faced the oppression of the Israeli Army, demanded to boycott the brands. Afterward, prompting owners in Muslim-majority countries such as Kuwait, Malaysia and Pakistan issued statements distancing themselves.

These days, as tensions over the boycotts have increased, Mr Kempczinski’s post comes.

The pro-Palestinian Boycott, Divestment and Sanctions (BDS) officially called for a boycott of McDonald’s this week, which had not formally targeted the brand before.

This step came after McDonald’s Malaysia, which is supported by a Saudi firm, filed the case against the Malaysia BDS group for $1.3m (£1m), citing “false and defamatory statements” that it said had put its business at a loss.

BDS suggests that McDonald’s should cut off relationships with its franchisees in Israel – and in Malaysia, unless it takes back the case.

“We cannot let this pass. Let’s show McDonald’s what grassroots boycotts can do.”

By referring back to the post, McDonald’s refused to talk about the lawsuit.

In his message, Mr Kempczinski opened up: “We abhor violence of any kind and firmly stand against hate speech, and we will always proudly open our doors to everyone.”

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