Starbucks: Job Cuts and Share Value Drop
Coffee giant Starbucks said it will eliminate about 1,000 jobs across its U.S. and U.K. branches and shut down loss-making stores. The company had already cut more than 1,100 jobs earlier this year in a bid to curb losses.
According to company filings, Starbucks has posted several consecutive quarters of slowing sales, with the sharpest downturns seen in Muslim-majority countries. Analysts estimate the company has lost around $11 billion in market value, largely due to a fall in its share price.
CEO Laxman Narasimhan acknowledged “a significant impact on traffic and sales” in the Middle East following the Gaza war. In the U.K., Starbucks has reported a pre-tax loss, partly attributed to boycott pressure.
McDonald’s: Franchise Shake-Up and Sales Miss
McDonald’s has also been a central target of boycott campaigns after its Israeli franchise provided free meals to soldiers in October, at the start of Israel’s military offensive in Gaza. Critics across the Middle East and Southeast Asia called for a boycott, leading to underperformance in key markets.
The fast-food chain admitted the Gaza war “meaningfully impacted” sales in late 2023. Growth in the Middle East, China, and India was just 0.7 percent, well below the expected 5.5 percent. While global sales grew 3.4 percent in the quarter, that figure was less than half the previous quarter’s growth.
Under mounting pressure, McDonald’s bought back all 225 of its branches in Israel from local licensee Alonyal. Franchises in Persian Gulf states distanced themselves from the Israeli operation, pledging $3 million in aid for Gaza.
Other Brands Caught in Crossfire
Starbucks and McDonald’s are not alone. Coca-Cola, Domino’s, and other American companies have also faced boycotts and declining sales in markets such as Turkey, Egypt, and Malaysia. In Turkey, parliament removed Coca-Cola from its cafeterias, contributing to a 22 percent sales drop in the final quarter of 2023. Domino’s reported nearly a 9 percent sales decline in Asia, driven largely by consumer backlash in Malaysia.
Wider Boycott Movement
The campaigns form part of the long-running Boycott, Divestment and Sanctions (BDS) movement, which urges consumers to avoid companies perceived as supporting Israel. While some of the targeted firms dispute the claims or stress that their global franchises operate independently, analysts say the economic impact of the boycotts is becoming increasingly visible.
With the Gaza war ongoing and civilian casualties mounting, analysts warn that global brands could face reputational and financial fallout in markets where public sentiment strongly favors the Palestinian cause.
Hossein Amiri - seyed mohammad kazemi
