Fast-food outlets in Malaysia close as protest over Gaza war begins to bite

The global fast-food chain KFC has reduced its operations in Malaysia, closing more than 100 restaurants temporarily after months of a pro-Palestine boycott of US-linked businesses triggered by the war in Gaza.

QSR Brands, which owns and operates the KFC franchise in Malaysia, is suspending operations of 108 outlets nationwide, the Nanyang Siang Pau Chinese-language daily said, based on information from Google Maps.

The maps show which KFC outlets have had their status updated to show "temporarily closed".

A QSR source, who did not want to be named, said the company sees the boycott as an opportunity to cease some KFC operations that have weighed on its balance sheet.

QSR said on April 29 that "in response to challenging economic conditions", it had temporarily closed outlets to manage growing business costs and focus on busier KFC outlets.

Employees of the affected stores were offered "the opportunity to relocate to operating stores as part of a tactical strategy to optimize resources in trade zones with higher customer engagement", QSR said.

Checks by The Straits Times on three outlets in Kuala Lumpur revealed signs saying they were temporarily closed. Boxes were stacked up inside the restaurants. Workers at neighboring stores said they were closed a week ago because of a lack of customers.

"KFC is not on the BDS list of targeted companies," said Mohd Nazari Ismail, chairman of the pro-Palestinian group Boycott, Divestment, Sanctions Malaysia. "But many Malaysians see any American fast-food operator to be related to Israel, including KFC."

Since the boycott began in October KFC has shifted its branding strategy, with signs on its menu boards and fliers emphasizing that it is owned by Johor Corporation, which belongs to the Johor state government.

"To mitigate the impact of the boycott, QSR changed its branding strategy to become more Islamic on its website in the fourth quarter of last year," the source said.

The company's website said its businesses provide "employment opportunities for over 30,000 employees, of whom 86 percent are Muslims".

In the state of Kedah 11 outlets have closed, Nanyang Siang Pau said.

Amri Hasim, a businessman in the city of Alor Setar in Kedah, said that since the boycott began he has received many job applications from KFC workers, and that its outlets there have halved their daily operating hours to 12 a day.

There are more than 600 KFC restaurants in Malaysia, the QSR website said.

KFC and a few other US-based brands such as Starbucks and McDonald's have faced boycotts because of their perceived link to Israel since the war in Gaza broke out on Oct 7.

Berjaya Food, a company listed in Kuala Lumpur that owns 400 Starbucks outlets in Malaysia, reported a net loss the equivalent of $9 million in the last quarter of last year, and its owner is said to be considering privatizing the company.

QSR also operates KFC restaurants in Singapore, Brunei and Cambodia, as well as more than 480 Pizza Hut stores in Malaysia and Singapore.

Northeast Kelantan state is the worst-hit, with nearly 80 percent, or up to 21 outlets, halting their operations, followed by 15 outlets in Johor state, Nanyang Siang Pau said.

Selangor, the most industrialized state in Malaysia, has 11 branches temporarily closed, 10 of them in the Malay-majority city of Shah Alam.

THE STRAITS TIMES