Starbucks and McDonald’s Suffer Losses Amid Boycotts Due to Israel-Hamas War
In the midst of the Israel-Hamas war, global giants Starbucks and McDonald’s have found themselves in the crosshairs of a growing boycott movement. The boycotts have sent shockwaves through the companies, resulting in substantial losses in market value and a dip in sales for both.
Between November 16 and early December, Starbucks’ shares plummeted by a significant 8.96%, resulting in a staggering loss of nearly $11 billion in market value. This drop amounted to approximately 9.4% of the company’s total value, showcasing the magnitude of the impact. McDonald’s, on the other hand, reported its first quarterly sales miss in four years due to slow growth in its international business division.
The consequences of such declines in stock prices can be devastating for businesses, potentially leading to layoffs and economic hardship. Dr. James Madison, an adjunct professor of economics at Marist College, stated, “Long-term effects of falling stock prices can cripple a business, causing layoffs as well as economic hardship for the company. Based on this, this could also impact suppliers to the boycotted company and their relationship to the business as well as their own economic standing based on association.”
The boycott against Starbucks began when the company sued Starbucks Workers United, a workers union, after a social media account linked to the union expressed support for Palestine. This move ignited widespread outrage and prompted consumers to take action by boycotting the coffee giant.
McDonald’s CEO also acknowledged the negative impact the boycott had on the company, acknowledging that several markets in the Middle East and beyond were experiencing a significant drop in business due to the war and the associated misinformation. In a letter addressing the situation, McDonald’s CEO stated, “I recognize that several markets in the Middle East and some outside the region are experiencing a meaningful business impact due to the war and associated misinformation that is affecting brands like McDonald’s.” Following the publication of this letter, McDonald’s shares tumbled by four percent.
Consumers participating in the boycotts are determined to make their voices heard and show that they are not under the control of these corporations. The co-president of the Muslim Student Association at Marist College emphasized, “We are trying to let these companies know that they don’t control us. We the consumers have a choice, and our choice will make a difference.” This sentiment is echoed by many, as an increasing number of people are actively seeking alternatives to the boycotted brands.
The significant financial losses and sales slumps faced by Starbucks and McDonald’s demonstrate the far-reaching impact of the boycotts driven by the Israel-Hamas war. As the companies struggle to regain consumer trust and recover from these setbacks, the effects of the boycotts extend beyond the corporate sphere, potentially affecting suppliers and their economic standing.
Analyst comment
Negative news: Starbucks and McDonald’s suffer losses amid boycotts due to Israel-Hamas war.
As an analyst, the market for both companies is expected to continue experiencing downward pressure as the boycott movement gains momentum. The loss in market value and sales dip indicate the significant impact of the boycotts, which may lead to layoffs and economic hardship for the companies. Suppliers associated with the boycotted brands could also be affected.
