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Boycott continues to hit bottom lines of firms with perceived Israel ties
Analysts suggest that the affected firms exercise caution in any business expansion until the effects of the boycott movement subside and focus on making their products appealing to consumers.
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A barista serves customers at a Starbucks outlet in Jakarta on April 4, 2020. (Antara/Paramayuda)
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everal major listed companies with perceived ties to Israel have reported significant declines in sales over the first nine months of the year in a development they attribute largely to a boycott movement that has taken a toll on their bottom lines, prompting some to cut thousands of jobs.
Analysts, too, see the boycotts as one key factor behind the poor performance, alongside weakened consumer spending and intensified competition. They suggested the affected firms exercise caution in any business expansion until the effects of the boycott subside and focus on making their products more appealing to consumers.
PT MAP Boga Adiperkasa (MAPB), which operates Starbucks in Indonesia, saw its sales slump to Rp 2.4 trillion in the first nine months of this year, a 21.2 percent decline from the same period last year. The drop led to a Rp 79 billion loss, a stark contrast to last year’s Rp 111.5 billion profit, prompting the company to reduce its workforce by around 1,000 since September last year.
PT Sarimelati Kencana (PZZA), the operator of Pizza Hut, reported a nearly 26 percent decrease in revenue to Rp 2.04 trillion over the same period. Its store count dropped by 17 to 595 outlets, while its loss more than doubled to Rp 96.7 billion. The firm also cut its headcount by almost 500 to 4,651.
Meanwhile, PT Fast Food Indonesia (FAST), which operates KFC in the country, experienced a 22.3 percent drop in sales to Rp 3.6 trillion, with its net loss tripling to Rp 558.8 billion, its store count dropping by 42 to 715 outlets and headcount down by 2,000 to 13,715 people.
Starbucks, Pizza Hut and KFC have all faced backlash from customers through the Boycott, Divestment and Sanctions (BDS) movement, a nonviolent global movement promoting boycotts, divestments and economic sanctions against Israel over human rights abuses.
BDS dates back decades but boycott calls against Israeli companies and firms seen to support Israel have intensified in Indonesia since late last year after Israel launched major military action against Hamas and other armed groups in Gaza, the West Bank and Lebanon, causing high casualties among civilians and massive infrastructure destruction.
