McDonald’s and KFC Face Boycotts Over Perceived Israel Support Amid Gaza Conflict

Since the surprise attack by Hamas on October 7 and the continuation of the Israeli offensive, the famous brand has been accused of supporting the Israeli army. In Israel, a McDonald’s franchise managed by Alonyal Limited had distributed 12,000 meals to Israeli soldiers and to hospitals hard hit by the attack. This gesture had provoked the anger of the neighboring Arab countries. "The franchises in Turkey, Egypt, Jordan, Lebanon and the Persian Gulf countries have issued statements in which they distanced themselves from the actions of their Israeli counterparts," reported the Washington Post. Boycott campaigns of the American brand have thus been launched. Many Muslims in the region have modified their consumption habits since the start of the war, thus reducing the demand for fast food from American retailers. These campaigns are hurting McDonald’s and KFC in Western Asia and Europe. "Everyone has been affected, it’s something that few people have realized, not just Western brands, everyone has been affected by the conflict after October 7," said Brandon Guthrie, co-founder and general partner of Shatranj Capital Partners, in a podcast with Michael Halen, senior analyst at Bloomberg Intelligence. And he added: "Nevertheless, the impact on McDonald’s and Starbucks has been much more significant, as they were more exposed to Egypt, Jordan and Morocco."

For now, McDonald’s has not specified what it has lost in terms of revenue during the fourth quarter. In February, its CEO Chris Kempczinski said during a conference call that "the most pronounced impact" occurred in Western Asia, and that there would also be an impact in Muslim countries like Indonesia and Malaysia. The boycotts have also affected some KFC franchises in Southeast Asia. In Malaysia, more than 100 KFC outlets have been forced to temporarily close. Addressing its Muslim clientele, Malaysian operator QSR Brands (M) Holdings Bhd. took care to specify that it has more than 18,000 employees in the country, about 85% of whom are Muslim.