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Starbucks increases Middle East outlets despite Gaza boycott calls

By Megha Merani
Starbucks Middle East Alamy/Yvette Cardozo
Starbucks has increased its outlets in the Middle East despite calls to boycott the company over the conflict in Gaza
  • 7% increase in outlets
  • 55 new ones in Saudi Arabia
  • Company denies it’s pro-Israel

Starbucks has expanded its presence in the Middle East over the past year, despite ongoing boycott calls due to the Gaza conflict. 

The total number of Starbucks outlets in the region rose by approximately 7 percent, from 1,870 to 1,997, according to the company’s data.

The largest expansion came in Saudi Arabia, adding 55 new locations, followed by Turkey and Dubai.

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However store numbers declined in Kuwait, Oman, Lebanon and Jordan. 

Kuwait’s Alshaya Group, which operates Starbucks stores across the Gulf and broader Middle East region, announced job cuts in March due to challenging trading conditions.

The company declined to comment on the discrepancy between the store count and its earlier announced job cuts.

Starbucks has faced boycott threats over its perceived pro-Israel stance since the war began in October last year, a claim it denies. 

CEO Laxman Narasimhan acknowledged ongoing boycotts in the Middle East, Southeast Asia, and parts of Europe due to these misperceptions.

“We’ve continued to see weakness in parts of our international business and strength in others,” he said in the company’s Q3 earnings call. 

He added that "headwinds persist" in the Middle East, Southeast Asia and parts of Europe, "driven by widely discussed misperceptions about our brand".

Starbucks’ revenues dipped 1 percent in the April-June period as customer traffic weakened in the US and China. 

This trend echoed McDonald’s, which reported a 1 percent decline in same-store sales internationally due to being hit by boycotts of Western brands. 

Earlier this week Americana Restaurants International, the Mena franchise owner for KFC, Pizza Hut and Hardee’s, said it has scaled back growth plans after a 41 percent profit drop in Q2, attributing it to the conflict backlash.

At the same time, PepsiCo reported robust growth in the Middle East, posting double-digit organic revenue growth in Egypt despite the boycott.

However the company acknowledged that disruptions from ongoing conflicts in certain international markets may persist.

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