Berjaya Food, the franchise operator of Starbucks in Malaysia, was hit by a prolonged consumer boycott linked to the Israel-Gaza conflict. For the financial year ended June 2025, it reported a record net loss of RM292 million ($69 million), widening from RM91 million the previous year. Revenue slumped 64% to RM477 million. The company described the impact as stemming from 'the prolonged impact of the ongoing sentiment related to the Middle East conflict' affecting market dynamics and customer spending patterns.
The boycott was part of a broader campaign targeting US-linked brands. Berjaya Food responded by consolidating stores, cutting costs, and exploring diversification into local and overseas markets. The losses represented the fifth consecutive quarterly loss for the company, and the franchise that had once been a crown jewel became a major drag on the group's performance.
Berjaya Food's Starbucks franchise in Malaysia lost RM292M as the boycott persisted; cost-cutting and store consolidation could not outlast consumer sentiment.
A franchise operator bore the full financial cost of a geopolitical controversy it had no part in
The prolonged nature of the boycott made recovery impossible despite cost-cutting and store consolidation
When a brand becomes a geopolitical target, the locally owned franchisee pays the full bill — and cost-cutting alone cannot outlast consumer sentiment
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