Domino's Pizza has seen a drop in its stock value traded on the Australian stock exchange, leading to a loss of over $1.5 billion for the American fast-food chain in Asia alone.
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According to data from the global pizza chain, sales by the American fast-food stores in Asia dropped by 8.9% in the second half of 2023, and the management of the world's largest franchise blames the decline on the war in Gaza.
This brand is the latest victim to join the growing list of American brands, such as McDonald's, Starbucks, and Coca-Cola, whose sales have been affected in the Asian market considered crucial for growth due to the presence of large Muslim populations in countries like Malaysia, Indonesia, and Pakistan – economies growing with an increasing demand for Western food. However, since October 7, many consumers in these countries have been boycotting American products due to their support for Israel.
During a conference call with analysts and investors, Don Meij, CEO of Domino's Pizza Enterprises, the chain's largest franchisee, attempted to explain the turmoil the company is facing.
Meij attributed the decline in sales not to taste-related issues but rather to anti-American sentiment in certain Asian regions. He emphasized that American brands, particularly in Malaysia, are being adversely affected by the ongoing events in the Middle East. Despite efforts to tailor products to local tastes, such as introducing unique items like "rice pizza" in countries like France and Japan, the company faced poor performance. Interestingly, Domino's, despite challenges in the Arab world since October 7, is not alone in experiencing a decline in sales.
Even in countries like Egypt and Jordan, consumers are reportedly seeking alternative dining options, avoiding American fast-food chains, and ceasing to purchase basic household products from American brands. This trend extends beyond major East Asian markets and is impacting the company's global operations.