MENA – Leading franchise operator in the Middle East and North Africa, Alshaya Group has shelved its plans to sell a minority (30%) stake in its Starbucks franchise.
The decision to put the minority stake sale on hold follows the recent string of customer boycotts of the coffeehouse chain in the region.
According to Reuters and other media outlets, many businesses and chains perceived to be US-backed have faced boycotts owing to the ongoing Gaza-Israel conflict.
Although the franchise operator reiterates it does not have any affiliation to either side of the conflict and describes the boycotts as ‘misinformed and based on misconceptions’, it acknowledges the impact it has on its operations.
The boycotts have significantly affected sales across outlets managed across 13 MENA countries, including Bahrain, Egypt, Qatar, Turkey, Oman, Morocco, Saudi Arabia and the UAE, as well as in Kazakhstan and Azerbaijan.
The decision to halt the minority sale stems from increasing investor scepticism over the chain’s performance.
It also comes barely a few months after Alshaya Group announced plans to let go of 4% of its workforce working at the coffeehouse chain, roughly 2,000 out of its 50,000 employees working in all its Starbucks MENA outlets.
Starbucks MENA said in an official statement, “As a result of the continually challenging trading conditions over the last six months, we have taken the sad and very difficult decision to reduce the number of colleagues in our Starbucks MENA stores.”
“Our thoughts are with the green apron partners who will be leaving, and we want to thank them for their contributions.”
In late 2023, Starbucks MENA introduced a section on its website called ‘Starbucks for the Record,’ a deliberate attempt to clarify its position on the conflict and counter the spread of misinformation regarding the restaurant chain’s position on the conflict.
The franchise had recorded positive performance before the conflict and had announced expansion plans.
In late September, Alshay Group announced plans of expanding Starbucks’s footprint in the Middle East with 1,000 new outlets by the end of 2028.
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