Amid boycotts, McDonald's sees first global sales drop since 2020
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The report makes no mention of the ongoing boycott and blames the drop on customers being "more discriminating with their spend."
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A pro-Palestine protest outside a branch of McDonald's in Palu City, Indonesia (undated, AP)
McDonald's has seen its first global sales decrease since 2020, as consumers worldwide balk at the increased cost of food items, Financial Times reported.
Comparable sales at the fast-food giant declined 1% year on year in the three months ending in June, with declines in both overseas sites and McDonald's US base.
CEO Chris Kempczinski stated that consumers were "more discriminating with their spend."
While quarterly revenue of $6.49 billion was nearly the same as a year earlier, net profit fell 12% to $2.02 billion, below Wall Street estimates.
In an open letter in May, Joe Erlinger, president of McDonald's USA, stated that the average cost of a Big Mac Meal in the United States has climbed 27% since 2019, to $9.29.
The firm and its competitors are now giving incentives to entice returning clients, which may be due to not only rising inflation but also a massive international boycott campaign.
McDonald's has been a significant target of the vigorous boycotting campaign against franchises and businesses that extend support to the Israeli occupation, particularly following its war and genocide in the Gaza Strip.
Recently, it reported a fall in sales in several Middle Eastern nations, as well as Indonesia and Malaysia. Sales were also down in China and France.
In April, McDonald's announced plans to acquire all of its restaurants franchised by the Alonyal group in "Israel".
The deal encompasses the sale of all 225 restaurant locations and the retention of the entire staff, which entails at least 5,000 personnel. McDonald's' share value was reported to have declined by almost 2% after the deal was brokered.
The corporation also noted that it remains "committed to the Israeli market."
Bloomberg revealed in February that McDonald's Corporation faced a setback in its fourth-quarter performance as sales failed to meet investor expectations, primarily due to the impact of boycotting on Israeli-linked businesses.
In an earnings preview, Morgan Stanley stated that the group's "reputation for value has appeared diminished" among customers and that it required offerings such as $5 dinners "to cater to a key customer cohort that has pulled back."
