Starbucks Malaysia Temporarily Closes 50 Outlets Amid Escalating Boycotts Over Gaza Conflict
The Gaza conflict-driven boycott has impacted Western brands across Malaysia, with Starbucks experiencing a 30% drop in foot traffic and a potential RM65 million loss by year-end
Starbucks Malaysia has temporarily shuttered 50 of its 408 outlets—a significant 12% of its operations nationwide. This move comes amidst plummeting foot traffic and a substantial financial downturn, both of which stem directly from the escalating consumer boycotts linked to the Israel-Gaza conflict. The boycott reflects growing pro-Palestinian sentiment in Malaysia, fueled by perceptions of Starbucks’ alleged support for Israel, despite the company’s local ownership under Berjaya Food Berhad (BFood).
BFood reported a pre-tax loss of RM31.82 million (US$7.1 million) for its latest quarter, marking the fourth consecutive quarterly loss. Revenues have halved year-on-year, dropping from RM250 million to RM124.19 million (US$28 million).
A company spokesperson clarified that the closures are part of an “ongoing assessment to align (their) presence,” emphasizing that no employees have been laid off; they have instead been reassigned to nearby outlets. 
Starbucks Malaysia issued statements in response to a global boycott campaign targeting U.S. brands fueled by Washington's military support for Israel
“The significantly lower revenue and pre-tax loss incurred in the current quarter under review were mainly due to the current sentiment concerning the conflict in the Middle East,” BFood noted in its financial report.
The boycotts, rooted in solidarity with Palestine, have intensified since the start of the Gaza conflict. According to Médecins Sans Frontières, the conflict has resulted in over 41,500 Palestinian deaths and more than 100,000 injuries. Public backlash against brands perceived as supporting Israel, including Starbucks, has driven consumers toward local and international competitors.
The repercussions are stark; Starbucks locations in Malaysia have experienced foot traffic declines of up to 30%, according to checks conducted by financial services group RHB. This shift in consumer behavior led RHB to advise investors to sell their shares in BFood, citing a 24% dip in stock prices last year.
Starbucks’ competitors in Malaysia continue to flourish
While Malaysia’s coffee market remains robust, Starbucks’ competitors continue to thrive. Local brands and other Western chains are benefiting from the redirected spending. “The closures are reflective of a broader trend,” analysts observed, “where Western brands like KFC and McDonald’s are also facing financial difficulties due to similar boycott movements.”
The temporary closures mark a pivotal moment for Starbucks Malaysia. Analysts emphasize that rebuilding consumer trust is essential. “To stay relevant, the brand must address public concerns about its perceived affiliations and adapt to the evolving preferences of Malaysian coffee drinkers,” they assert.
