On Irsal Street in Ramallah, the West Bank city where the American capital has dared to enter the most, a dozen meters separate three fast food stores.
On a sidewalk are KFC and Pizza Hut;
in the other, right in front, Popeyes.
The Palestinian Ahmed Mashal leaves the latter with a bag, rushing so that the fried chicken (very popular in the Arab world) arrives hot to his wife and children.
He has not chosen by taste, but by policy: KFC and Pizza Hut are among the American multinational chains - such as Starbucks, McDonald's, Burger King or Coca-Cola - that are boycotting consumers from the Middle East and other Muslim countries due to the support of the United States. United with Israel and have already seen their income statement affected, as the top executives of several of these companies have recognized in their conferences with analysts and investors.
“I don't want my money to end up paying for the bombs that kill children in Gaza.
Nothing American has come into my house for four months.
Not even some Pringles,” he points out.
His case shows how the war in Gaza has once again put geopolitics on the table of company boards of directors, when the shock caused by the invasion of Ukraine, which led large multinationals to withdraw from Russia, has not yet subsided. .
The boycott encourages generic punishment of Western brands and, in particular, American ones, although it has put the spotlight on companies that have made a name for themselves (sometimes due to clumsiness, misunderstandings or local initiatives).
Popeyes, for example, is as much a franchise and as American as KFC, but a rumor circulates in Ramallah that the money does not reach the headquarters.
In Egypt, a campaign to support Palestine points out banned brands and local alternatives on large murals.
Several companies in the region have benefited from changing consumer habits.
The turnover of Astrolabe, a Jordanian coffee chain, has skyrocketed following the Starbucks boycott.
The same thing has happened in Egypt to the historic local soft drink brand Spiro Spathis.
Affected companies have given little information about the impact of the boycotts.
At times they have resorted to generalities or euphemisms and have rarely quantified the losses.
The first companies to face calls for a boycott were McDonald's and Starbucks.
The McDonald's franchisee in Israel offered free meals to the Army and discounts to soldiers and security agents.
Up to 50%, as advertised on its illuminated signs, in line with the policy followed by other chains and cafes in the country in times of war.
From that moment on, there were calls for a boycott in other countries in the region and even attacks on some of its restaurants.
The entire brand has become a target, despite criticism of the Israeli decision and the support for Gazans expressed by other franchisees or licensees, such as those from Oman, Lebanon, Turkey, Saudi Arabia or Kuwait.
A McDonald's in Tel Aviv announces 50% discounts for soldiers last November.Álvaro García
The company's CEO, Chris Kempczinski, acknowledged that “the war and the disinformation associated with it” were harming the company in the Middle East.
Recently, McDonald's released its results and admitted that “beginning in the fourth quarter of 2023, the company's system-wide sales and revenue were negatively impacted by the war in the Middle East.”
“The company is monitoring the evolving situation, which it expects will continue to have a negative impact on system-wide sales and revenues as the war continues,” he adds.
In a conference with analysts, Kempczinski and the rest of the company's directors avoided giving details, but acknowledged that the impact is being "significant."
On the social network TikTok you can see several videos in countries such as Malaysia, Indonesia, Turkey or Saudi Arabia in which the user first shows an almost empty McDonald's and, a few meters away, people queuing at another fast food store, usually local. .
In his letter a few weeks ago on Linkedin, Kempczinski stressed that McDonald's franchises in Muslim countries that have faced calls for a boycott are owned by “local operators who work tirelessly to serve their communities while employing thousands of their fellow citizens.” .
The manager also condemned “violence” and “incitement to hatred.”
In the case of Starbucks, the trigger for the boycott was a lawsuit against Workers United, the union that organizes its workers, after a social media account of said organization published a pro-Palestinian message in the wake of the conflict in Gaza.
The company alleged that the lawsuit was for improper use of its name and because it wanted to stay away from taking political positions.
Following calls for a boycott, Narasimhan published an open letter to employees in December stating that Starbucks condemns “violence against the innocent, hate and armed speech and lies.”
“We are a company with a mission and promises based on humanity and giving.
We hate hate.
“We strongly reject violence against the innocent,” he maintained.
protests
That letter did not serve to calm things down and some Starbucks coffee shops were the target of protests in the United States.
Days later, Narashiman published a new message in which he denounced the “misrepresentation” of his position.
“I am concerned about the state of the world we live in.
There are conflicts in many places.
Violence has been unleashed against the innocent, hatred and armed speech, and lies, all of which we condemn.
In cities around the world—including here in North America—protests have intensified.
Many of our stores have suffered incidents of vandalism.
We see protesters influenced by the misrepresentation on social media of what we represent.
We have worked with local authorities to ensure the safety of our partners and customers.
there is nothing more important.
Our position is clear.
We defend humanity,” he said.
Narasimhan admitted in a conference with analysts that calls to boycott the coffee chain had “a negative impact” for its business in the Middle East which then, in turn, “had an impact in the United States, driven by misperceptions” about Starbucks' position.
In reality, the most affected is an Arab company, Americana Restaurants, listed on the Riyadh Stock Exchange.
American chain restaurants such as KFC, Pizza Hut, Hardee's, Krispy Kreme and TGI Friday's have operated in the region for half a century.
The company has given the most complete information on the impact of the boycotts.
Comparable sales had been growing at full speed during 2023. In October, they fell 9.4%;
in November, 29.3% and in December, 26.6%, as detailed to analysts, estimating the impact at 128 million dollars.
The Saudi group has classified the countries where it operates based on the strength of the boycotts.
Where they have had the most impact has been in Egypt, Oman and Jordan.
They are followed by Lebanon, Kuwait, Qatar, Bahrain and Morocco.
Where it has been least noticed in the countries where it is present has been in Saudi Arabia, the Emirates, Iraq and Kazakhstan.
By chain, the impact on comparable sales has been similar in all brands: 22.6% in KFC and Hardee's;
22.4% in Pizza Hut, and 21.7% in Krispy Kreme donuts.
In the United States, Yum Brands, the owner of the KFC and Pizza Hut brands, was less explicit.
“Sales were affected by the conflict in the Middle East, with varying degrees of impact in the Middle East, Malaysia and Indonesia markets.
This was a low-single-digit [1% to 5%] setback to Yum!'s overall sales growth.
at the same locations in the fourth quarter.
“This trend has continued in the first quarter, and we expect the impact on sales to decrease throughout 2024,” its CEO, David Gibbs, explained to analysts, who assured that he was prioritizing the safety of his franchises and employees. in the region.
Recoil
Other affected companies have also not given many details of the impact of a boycott carried out mainly by young people and amplified by social networks.
Joshua Kobza, CEO of Restaurant Brands, the Burger King company, admitted that sales had been hit by “the effect of the conflict in the Middle East in more than a dozen countries.”
“We estimate that the conflict has led to a decline of 1.5 points in comparable sales and a three-point impact on traffic this quarter.
We are not going to speculate on the duration of this impact.
In the affected countries, all our attention is focused on the safety of our team members and our partners.”
James Quincey, president of Coca-Cola, the most recognized American consumer brand, was brief.
“In the Middle East, tensions have caused some changes in consumer behavior that have had an impact on our business,” he told investors.
Chief Financial Officer John Murphy was somewhat more explicit: “We estimate that the ongoing conflict in the Middle East had approximately one point of impact on volume growth during the fourth quarter of 2023. It is unclear how long this impact will last,” he said. .
Pepsico, for its part, did not even refer to the Middle East in its results, but its sales disappointed the market in the fourth quarter.
Coca-Cola and Pepsico are not among those targeted by the organization Boycott, Divestment, Sanctions (BDS), which is leading calls to sabotage companies that are supposed to collaborate with Israel.
The Spanish CAF appears on its large blacklist for its contract for the Jerusalem light rail, which crosses occupied Palestinian territories.
Generally, the impact on non-consumer goods companies is smaller.
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