McDonald’s boss says anti-Israel boycotts hurt sales

McDonald’s CEO Chris Kempczinski has said the fast food chain was suffering a “significant” hit to its business as customers boycott the company in the Middle East over its alleged support for Israel.

Kempczinski said calls by pro-Palestinian groups to boycott McDonald’s are based on “misinformation.”

The fast food giant has been targeted by activists after social media posts showed franchised stores in Israel offering free meals to Israeli military forces following the October 7 Hamas attack.

The move sparked grassroots calls to boycott the brand from those angered by Israel’s military response in Gaza, prompting owners in Muslim-majority countries like Kuwait, Malaysia and Pakistan to issue statements distancing themselves.

McDonald’s operates a franchise business model, meaning it relies on thousands of independent companies to own and operate the majority of its more than 40,000 stores worldwide, of which about 5 percent are located in the Middle East.

The company has said it has no position on the dispute and is not responsible for the actions of its franchisees, who pay the company a fee to use its brand and recipes.

Kempczinski said in a LinkedIn blog post on Thursday: “Several markets in the Middle East and some outside the region are experiencing significant business impact due to the war and associated misinformation that is affecting brands like McDonald’s.

“This is discouraging and unfounded. In every country where we operate, including Muslim countries, McDonald’s is proud to be represented by local owner-operators who work tirelessly to serve and support their communities while employing thousands of their fellow citizens.”

“Our hearts remain with the communities and families affected by the war in the Middle East. “We abhor violence of any kind and firmly oppose hate speech, and we will always proudly open our doors to all,” he added.

The McDonald’s boss’s post comes as tensions over boycotts have risen in recent days. The pro-Palestinian Boycott, Divestment and Sanctions (BDS), which had not formally targeted McDonald’s, this week officially called for a boycott of the brand.

Earlier this week, McDonald’s Malaysia sued Malaysia’s BDS group for $1.3 million (£1 million), alleging that “false and defamatory statements” had harmed its business, according to Reuters.

In response, BDS Malaysia said it “categorically denies” defaming the fast food company.

“We can’t let this go. Let’s show McDonald’s what grassroots boycotts can do,” the group said in a statement.

Kempczinski is the No. 2 boss of a major global firm dealing with the toll caused by the tension of the war between Israel and Gaza. Last month, Starbucks CEO Laxman Narasimhan said the company was the victim of a “misrepresentation on social media of what we stand for.”

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