MALAYSIA- Starbucks Malaysia operator Berjaya Food has reported a net loss of RM38.2 million (US$8.8 million) net loss for Q2 2024 compared to RM17.28 million (US$3.8 million) recorded in Q2 2023.
Berjaya Food also posted a revenue of RM30.6 million (US$30.2 million) for the reported quarter, which represents a 52% decline from RM271.75 million (US$62.83 million) recorded in the same quarter last year.
Sales fell by more than half in the reported quarter.
The operator attributes the decline in sales, revenue, and net loss to consumer sentiments regarding the ongoing conflict in the Middle East.
US restaurant chains have faced significant challenges in the Middle East Asia and some parts of Europe because of their perceived support and links to Israel. There have been widespread calls from activists and other interest groups to boycott the QSR brands because of these perceived links.
McDonald’s, for example, became a target of widespread boycotts in the regions after videos and photos went viral on social media showing its outlets in Israel giving free meals to Israeli soldiers following the October 7, 2023 attack.
Restaurant chains worldwide have also faced significant market challenges in the past year due to inflation.
High inflation has caused a significant increase in the cost of ingredients and raw materials. This cost pressure was translated to customers via higher prices. Customers have also become increasingly weary of prices, which has stifled demand.
Berjaya Food is part of the larger Berjaya Corporation, a conglomerate that recorded similar negative performance.
The conglomerate reported revenue of RM730.3 million (US$168.9 million) and a pretax loss of RM87.34 million (US$20.19 million). This represents a significant decline from the RM1.2 billion (US$260 million) revenue and RM148.73 million (US$34.4 million) recorded in the same quarter last year.
In its future outlook, the conglomerate acknowledged the challenging environment but expressed optimism moving forward.
The Corporation said in a statement, “While recovery may be slow due to ongoing current uncertainties, the Directors believe that strategic adjustments and operational refinements will, in time, strengthen the Group’s position and lead to better financial results.”
The company’s shares declined 13% on August 28 following the release of the Q2 2024 performance.
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