US restaurant chains see profits collapse as Israel boycott bites
The parent company of US food outlets KFC and Pizza Hut saw an almost 50-percent fall in profits this quarter
Americana Restaurants, West Asia's largest fast-food operator, reported a 48.2 percent decline in profits on 31 October, as consumers boycott US and Israel-linked brands in response to the genocide of Palestinians in Gaza.
The Kuwaiti firm announced its profits had fallen to $117.4 million over a nine-month period, while revenues had fallen 15.3 percent to $1.61 billion.
"Topline growth continued to be impacted by lower like-for-like sales due to the evolving regional geopolitical situation and slowness in consumer demand observed in some markets, despite support from new store openings," the company said in a statement.
Americana Restaurants is West Asia's franchisee for major US food outlets that include KFC, Pizza Hut, Baskin Robbins, Costa Coffee, and Krispy Kreme.
Mcdonald's has also been a target of the boycott campaign.
According to The New Arab, McDonald's reported that sales had fallen by 1.5 percent between July and September.
Between April and June, sales dropped by one percent — the first consecutive period of falling sales since lockdowns were imposed during the spread of Coronavirus.
The boycott of McDonald's began after its Israeli franchise gave thousands of free meals to Israeli soldiers at the beginning of the genocide, which began in October last year.
In April, McDonald's moved to limit the damage to its brand by buying back its 225 stores in Israel from the franchisee.
Pizza Hut has faced similar boycott pressure after its Israeli franchise shared images of soldiers with its items in January.
Calls for a boycott intensified in May after a Pizza Hut branch in Israel posted a Facebook ad mocking Palestinian hunger strikers in Israeli prisons.
Israeli authorities had earlier released a fake video of Palestinian leader Marwan Barghouti, who was leading a mass hunger strike in Israeli prisons, secretly eating cookies.
Pizza Hut used a screenshot of the video, editing out the cookies and replacing them with a pizza box. The post in Hebrew read: "Barghouti, if you are going to break your strike, isn't pizza the better choice?" The US coffee chain Starbucks has also suffered losses due to the boycott.
In August, its CEO was ousted after a drop in sales for two consecutive quarters.
Revenues dropped four percent in the first three months of 2024, and three percent in the three that followed.
Calls for a boycott began after the company sued the Starbucks Workers United (SWU) union for trademark infringement in Iowa. Starbucks sued the union after it expressed "Solidarity with Palestine" "in a social media post that included the company's logo following Hamas' Operation Al-Aqsa Flood in October.