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- Domino's American name is hurting sales abroad, a franchisee said.
- Sales in Malaysia are down due to "what's happening in the Middle East right now," an exec said.
- It's another example of consumers abroad shunning US brands as Israel's invasion of Gaza continues.
Domino's Pizza is the latest American brand to face blowback as some consumers change their buying habits in light of Israel's invasion of Gaza.
Domino's Pizza Enterprises, a franchisee of the US company that operates Domino's restaurants in Australia, Europe, and Asia, said same-store sales in Asia fell an estimated 8.9% in the second half of 2023.
One of the causes: Customers in Malaysia are associating the Domino's name with America — and US ally Israel's war in Gaza since October, an exec said.
"It's well-publicized that American brands in Asia, and I largely talked to Malaysia in this case, have been affected by what's happening in the Middle East right now," managing director Donald Meij said on a call with analysts on Thursday. Domino's Pizza Enterprises also operates in countries including Singapore, Japan and Taiwan.
A majority of Malaysia's population is Muslim, and the country's government has expressed support for Palestine. Last month, its government banned Israeli-owned ships and those headed to Israel from its waters, CNN reported.
Malaysia and several other Asian nations key for consumer companies' growth, such as Indonesia and Pakistan, do not have diplomatic ties with Israel.
Domino's is not alone in facing pushback from consumers globally over Israel's invasion of Gaza. In Middle Eastern countries including Egypt and Jordan, shoppers are avoiding dishwasher pods manufactured by Procter & Gamble-owned brands, Bloomberg reported. Diners are also seeking alternatives to eating out at US-owned chains such as McDonald's and Starbucks, according to the report.
Spokespeople for Domino's Pizza Enterprises and Procter & Gamble did not immediately respond to Business Insider's request for additional comment.
A McDonald's spokesperson told BI that "McDonald's Corporation is not funding or supporting any governments involved in this conflict" and that "we are dismayed by the disinformation and inaccurate reports regarding our position in response to the conflict in the Middle East."
A Starbucks spokesperson directed BI to the company's December statement on Israel and Gaza. "Despite false statements spread through social media, we have no political agenda," it reads. "We do not use our profits to fund any government or military operations anywhere — and never have."
Avoiding US brands has taken the form of boycotts in some countries, such as Egypt, where consumers see street protests as too risky, Reuters reported in November.
McDonald's hasn't provided details on any effects the boycotts have had on its sales in affected countries. But the fast-food chain acknowledges that Israel's presence in Gaza is leading to "societal pressures" in markets where it has restaurants, CFO Ian Borden said during an investor call last month.
"We are seeing an impact on our business across a number of the markets in the Middle East and a limited number of markets outside the Middle East with the conflict that's going on, obviously, which is tragic," Borden said.
American brands aren't the only ones feeling the impact of the turmoil. In an investor presentation last month, Unilever CEO Hein Schumacher said that some of its brands in Indonesia have been affected by "the wars in the Middle East." Unilever is based in London and owns brands including Dove soap, Magnum ice cream, and Axe body spray.
"They're not material to the group, but they are there," he said of the boycott's effects. Unilever did not immediately respond to BI's request for additional comment.