What does the Starbucks Malaysia boycott mean for specialty coffee?

Nearly 50 Starbucks stores in Malaysia have suspended operations over the past year, according to multiple media reports. Operator Berjaya Food has posted losses for four consecutive quarters as a global boycott tied to the Israel-Palestine conflict continues. Sales are recovering slowly despite the brand's public statements and charity initiatives in the Malaysian market.

Starbucks Malaysia said it has never supported Israel, and Berjaya Food's founder urged consumers not to boycott blindly. For its 25th anniversary in June, the brand ran the Bearista art charity project with local artists, with proceeds for Gaza and Palestine aid, and donated 1 million ringgit to the Palestinian People's Humanitarian Trust Account. The campaign still has not subsided, leaving the brand's Southeast Asian outlook uncertain, with specialty coffee shops watching closely.

Affected by the global boycott wave triggered by the Israel-Palestine conflict, Starbucks has suffered a severe blow in the Malaysian market. According to multiple media reports, nearly 50 Starbucks stores in the country have suspended operations over the past year, and operator Berjaya Food has fallen into losses for four consecutive quarters. Although the brand has repeatedly clarified its stance and taken public welfare initiatives to try to win back consumer trust, the boycott campaign has still not subsided, and store sales are recovering slowly. This turmoil not only reflects the profound impact of geopolitics on commercial brands, but also makes the future direction of Starbucks in the Southeast Asian market full of uncertainty.

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Recently, multiple media outlets including China Press reported that nearly 50 Starbucks stores in Malaysia have closed over the past year.

It is understood that due to the ongoing Israel-Palestine conflict, the American chain brand Starbucks has been boycotted by a large number of Muslim consumers worldwide. Boycott campaigns in the Middle East, Malaysia, and other places have severely impacted Starbucks' operations, with many local stores facing sales difficulties and a sharp drop in foot traffic.

In order to mitigate the negative impact, Starbucks Malaysia once issued a statement emphasizing that it has never supported Israel. Malaysian Starbucks franchise operator Berjaya Food also issued a related statement to explain to local residents, and the company's founder repeatedly called on consumers in media interviews not to hold prejudice against Starbucks Malaysia and boycott blindly.

At the same time, in order to change the public's preconceived impression of the brand, in June this year, on the occasion of Starbucks Malaysia's 25th anniversary, the brand collaborated with local artists to launch the Bearista art charity project, with proceeds used for humanitarian aid funds in Gaza and Palestine.

In addition, Starbucks Malaysia also donated an additional 1 million ringgit (about 1.61 million yuan) to the Palestinian People's Humanitarian Trust Account. This move was regarded as an official formal statement of support for the Palestinian people's stance.

However, although the operator has used various measures to prove its stance and try to restore users' impression of Starbucks, the local boycott campaign has not stopped, and sales performance at many stores has still shown no improvement.

Asia Television News reported two weeks ago that Malaysian media outlet MalaysiaNow, citing sources, pointed out that more than 100 Starbucks stores across Malaysia have closed or temporarily closed, including stores located in large shopping malls and tourist attractions. "Temporary closure means Starbucks only needs to pay rent, but will not resume operations until sales recover."

The day after the report was published, when The Business Times sought verification from a Starbucks Malaysia spokesperson, the other party said the news that "more than 100 Starbucks stores have closed nationwide" was not true, and that most of the so-called "closed" stores were only temporarily suspended, but did not specify the exact number of stores.

The spokesperson said that the temporary suspension of some stores is part of the company's ongoing operational assessment, with the aim of adjusting its store network more strategically. As for employees, the spokesperson said they have not lost their jobs due to the store suspensions and have all been reassigned to work at nearby stores.

However, recently CIMB Securities pointed out that as of September 30, Starbucks Malaysia operator Berjaya Food had nearly 50 Starbucks stores temporarily suspended, and had fallen into losses for four consecutive quarters due to the boycott wave.

In response, Berjaya Food explained that "the reason for the temporary closures is that the ongoing boycott campaign has led to a poor sales recovery." Management said whether more Starbucks stores will be closed in the future (whether permanently or temporarily) will depend on regular reassessments. Starbucks Malaysia said that although the stores are still losing money, customers are beginning to realize that the allegations against the brand are not true, and their sales situation is gradually improving.

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