Geopolitical tensions in West Asia have impacted McDonald‘s operations in West and South India, with some outlets struggling to achieve half their pre-crisis sales. Saurabh Kalra, managing director of Westlife Foodworld, discussed this issue during a post-earnings analyst call for the July-September period.
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According to ET, Kalra stated, “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,” in response to analyst queries about the ongoing war in the Middle East.
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Meanwhile, the situation in India arises when quick service restaurant chains like Sapphire Foods, Devyani International (operating Pizza Hut and KFC), Westlife Foodworld, Burger King, and Domino’s are facing challenges with quarterly profits and same-store sales due to increased local competition and rising food prices.
Notably, the Israel-Gaza war has negatively impacted American brands like Coca-Cola, Burger King, McDonald’s, and Starbucks globally, particularly in Asia and the Middle East, due to boycott calls and anti-American sentiment over claims that these brands support Israel’s war efforts. Kalra mentioned, “There was a part of the 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.”
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Furthermore, Westlife Foodworld reported a significant 98.4% drop in profit to INR 35.7 lakh for the September quarter. Same-store sales growth also fell by 6.5%, due to “subdued in-store business,” according to the company’s earnings statement.
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When asked about the chain’s recovery, Kalra explained, “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.”
In a September 4 report by the Reuters, Coca-Cola and PepsiCo are facing declining sales in countries like Egypt and Pakistan, largely due to consumer boycotts sparked by the Israel-Gaza conflict.
