Eat it: Against the background of the ongoing war of iron swords and attacks against the American food giants McDonald's and Starbucks - the companies are now also reporting a decrease in revenues.
Official financial reports published by McDonald's worldwide and its reports of losses in its branches in the Middle East in the last quarter of the year, reveal that it has indeed suffered a financial blow.
McDonald's and Starbucks blame the Israel-Hamas war for slower sales — and the recovery might take a while https://t.co/fn7SvA4FVM
— CNBC (@CNBC) February 5, 2024
The data for the last quarter shows that for the first time in four years the food giant failed to meet the profitability target in the Middle East (as well as in China and India) and sales increased by only 0.7%, a value significantly lower than the forecasts.
According to the company, the business blow it suffered is deeply rooted in the disinformation that was spread about its workers during the war.
As I recall, this included, among other things, an attack by pro-Palestinian elements and the BDS organization against the alleged support of the global network on the Israeli side after the network in Israel donated thousands of meals to soldiers.
McDonald's branch in Manhattan, photo: AFP
It was also revealed that all branches of the chain saw an increase in sales, except for the branches in the Middle East.
This, according to the company, is due to the fighting between Israel and Hamas and the tensions in the Middle East and the Red Sea region.
In the message sent by the food giant to the American Securities and Exchange Commission (SEC), it is stated that as long as the war continues, it will have a negative effect on the sales and profits of McDonald's on a global level.
"We are intolerant of manifestations of violence of any kind," wrote the company's CEO Chris Kempczynski in a post he uploaded on his LinkedIn about a month ago, adding that the chain opposes inflammatory discourse and will keep its doors open for everyone while warning that misinformation in the Middle East and abroad is hurting sales.
McDonald's children's meal, photo: Dan Peretz
The company's fourth quarter reports revealed a profit of $2.95 per share and a net profit of $6.41 billion, with analysts' forecasts predicting a profit of $2.83 per share and a total net profit of $6.45 billion.
Although the data indicated an increase in sales in the existing branches, it was at a rate of 3.4%, a value lower than the forecasts that expected an increase of 4.7%.
In a conversation with investors held by Kempczynski last Monday, he shared that as far as forecasts are concerned, as long as the war continues, the company is not currently planning any moves and for now does not foresee an improvement in this market share.
"It's a human tragedy what's happening," he said, "and I think it definitely has an impact on brands like ours."
Starbucks workers' council, photo: Facebook
McDonald's is not the only international chain that reported damage to business and a decrease in its share value and profits.
Other giant chains, including the Starbucks chain of coffee shops, also reported damage due to the tensions in the Middle East.
On Tuesday of last week, it was reported that the share value of the cafe chain fell by 2%.
The chain also revealed that the war hurt its sales across the US in the last three months of the quarter.
As you may recall, Starbucks sued its workers' union in the United States last October following "solidarity with Palestine" tweets that were posted on the union's official account a few hours after the Hamas attack on October 7 and sparked outrage and calls for a boycott against the chain.
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