Due to widespread boycotts from both Muslims and non-Muslims, multinational corporations are facing significant challenges, experiencing declining sales and a deterioration of their reputations across various regions. Puma, McDonald’s, Starbucks, Coca-Cola, Intel, Hewlett-Packard, and Domino’s are among the prominent brands affected by these boycotts due to their connections with Israel.
In its recent quarterly report, McDonald’s disclosed weaker-than-anticipated sales, primarily attributing the decline to reduced demand at its establishments in the Middle East and predominantly Muslim countries such as Indonesia and Malaysia. Despite setting a growth target of 5.5% for sales in the Middle East, India, and China for the October to December period, McDonald’s fell short, achieving only 0.7% growth. The Middle East likely saw a contraction in sales specifically. Globally, sales growth slowed to 3.4% during the same period, marking a significant deceleration from the robust 8.8% growth observed in the preceding quarter.
McDonald’s faced intensified controversy when its Israeli branch provided complimentary meals to Israeli troops during the Gaza conflict, sparking widespread condemnation and calls for a global boycott. This impact has been particularly felt in the Middle East, where at least 5% of McDonald’s franchises are located. Despite efforts by franchises in Saudi Arabia, Oman, Kuwait, the United Arab Emirates, Jordan, Bahrain, and Turkey to distance themselves from the free food campaign and pledge aid to Gaza, the company’s regional sales have suffered.
Starbucks, another global giant, has also experienced declining sales, prompting the company to revise its annual sales forecast downwards due to significant declines in traffic and sales, especially in the Middle East. Additionally, Starbucks Workers United, a union representing thousands of baristas in the U.S., exacerbated the situation by expressing support for Palestinians in a now-deleted post, leading to a legal dispute with Starbucks.
Coca-Cola, known for its controversies in the Middle East, has once again found itself on social media boycott lists due to its past associations with Israel and its American identity. In Turkey, parliament voted to remove Coca-Cola from shelves and eateries on its premises, resulting in a reported 22% decrease in sales for the last quarter of 2023.
In Egypt, the boycott of Coca-Cola and other American soft drinks has fueled the resurgence of Spiro Spathis, a century-old local soda brand. The brand has experienced a significant surge in sales as consumers shift away from American beverages. This development has the potential to decrease dependence on American and Western goods in the region, influencing market dynamics and promoting the growth of domestic industries.
While these shifts may not represent formal protectionist policies imposed by governments, they signal a growing consumer awareness and desire to support local businesses. This trend could lead to enhanced self-sufficiency and a more diversified marketplace in the Middle East, reducing reliance on imports from American and Western companies. Ultimately, this aligns with a desirable long-term goal for Muslim countries, as it diminishes the leverage that supporters of Israel hold over many Muslim nations.
