Starbucks’ Malaysian branch has faced substantial sales declines amid ongoing boycotts by pro-Palestine supporters in the country, according to Malaysia’s largest bank. Maybank has warned that the coffee giant faces long-term slumping sales, driven by consumer anger over perceived ties to Israel and the US.
Despite Starbucks not being officially blacklisted by Boycott, Divestment, Sanctions (BDS) Malaysia, analysts from Maybank Investment Bank suggest the brand may be losing its appeal permanently. They project Berjaya Food Berhad (BFood), Starbucks Malaysia’s local licensee, will incur losses of up to RM65 million (US$14.5 million) by the year’s end.
Profit forecasts for the next two years have been slashed by up to 15 percent. Food recently reported a pre-tax loss of RM31.82 million (US$7.1 million) for its latest quarter, marking its fourth consecutive quarterly loss. Revenue has plummeted by over 50 percent year-on-year, falling to RM124.19 million (US$28 million). BFood shares, heavily reliant on Starbucks revenue, have dropped nearly 37 percent this year.
According to the Malaysian daily newspaper Malay Mail, BFood has since focused on expanding other brands, such as Paris Baguette and Krispy Kreme Doughnuts in response to declining Starbucks sales. However, Maybank analysts caution that significant earnings diversification will take time due to the company’s reliance on Starbucks.
The boycott has forced Starbucks Malaysia to temporarily close 50 of its 408 outlets—approximately one in eight stores. Consumer spending has shifted to rival coffee brands despite Starbucks being locally owned and employing over 5,000 Malaysians.
This downturn occurs against the backdrop of Israel’s ongoing war on Gaza- which has killed nearly 44,000 Palestinians and wounded over 104,000 since October 2023. BDS Malaysia has not yet confirmed its stance on Starbucks. Earlier this year, Starbucks Malaysia denied accusations of political affiliations, asserting that Starbucks is a non-political organisation.
The company reiterated that neither Starbucks nor its former CEO, Howard Schultz, has financially supported the Israeli government or military. Starbucks upholds humanity. We condemn violence, the loss of innocent lives, and all forms of hate speech, the company said in a March statement.
Additionally, Starbucks Malaysia announced that it had donated RM1,000,000 (US$223,589) to the Palestinian People’s Humanitarian Trust Account, a Malaysian government fund, last October. The boycotts of Starbucks align with broader consumer actions against brands perceived as linked to Israel.
In Indonesia, similar pro-Palestine boycotts have targeted KFC, resulting in store closures and significant financial losses. BDS, launched in 2005, is a nonviolent Palestinian-led movement advocating for boycotts, divestments, and sanctions against Israel. The recent surge in consumer boycotts follows Israel’s intensifying assault on Gaza, with brands such as Starbucks, McDonald’s, and KFC facing major backlash and financial repercussions.
