NEW DELHI: Global geopolitical unrest, particularly the ongoing conflict in the Middle East, has significantly impacted McDonald’s sales in West and South India, with some locations seeing sales fall to less than half of pre-crisis levels.
“I don’t think a lot of stores which got impacted last year have come up to the level of what they were pre-crisis,” Saurabh Kalra, managing director of Westlife Foodworld, McDonald’s exclusive operator in the region said, as quoted by Economic Times.
Kalra noted that some stores in Mumbai, particularly in areas like Mumbai Central and Mazgaon, have been especially hard-hit.
“There was a part of stores which were impacted. They are marginally better off but still largely remain impacted. And I can quote a few examples of Mumbai Central, Mazgaon where what we used to do, we are not even doing half of what we used to do. So, it remains tough in some of those belts,” Kalra said
Westlife Foodworld reported a drastic 98.4% drop in profits for the September quarter, down to just Rs 35.7 lakh, while same-store sales growth declined 6.5%. The company attributed these declines to “subdued in-store business,” reflecting a broader trend of stress in the quick-service restaurant (QSR) industry in India. Other major QSR chains, including Sapphire Foods (Pizza Hut and KFC) and Devyani International, have similarly cited rising competition and food inflation as factors squeezing profits.
The impact of the Israel-Gaza conflict is not limited to India. The global reach of American brands like McDonald’s, Coca-Cola, and Starbucks has also been affected by consumer boycotts and anti-American sentiment in several regions, particularly in Asia and the Middle East. Many consumers in these regions have voiced opposition to the companies, accusing them of financing Israel’s military efforts, ET reported.
Kalra acknowledged the challenges but remained optimistic about the future. “We have built a lot of good momentum and we believe the negative cycle should be behind us and we should be able to do a better job in H2. We believe we are poised if the consumption trends come back; we are poised to be able to create the results which normally you would expect from us,” he said, referring to the company’s hopes for a recovery in the second half of the fiscal year.
As part of its ongoing struggle, Westlife Foodworld is grappling with heightened competition from local food chains and the broader macroeconomic pressures of food inflation.
A recent report by Reuters highlighted similar struggles faced by multinational brands like Coca-Cola and PepsiCo, which are experiencing a downturn in demand in Muslim-majority countries like Egypt and Pakistan due to consumer boycotts related to the Israel-Gaza conflict.