KFC shuts down dozens of Malaysia branches amid boycotts over Gaza

Dozens of Kentucky Fried Chicken (KFC) restaurants have shut in Malaysia following a months-long economic boycott over the American fast-food chain's perceived links to Israel.

QSR Brands (M) Holdings Bhd, which operates KFC and Pizza Hut franchises in Malaysia, said it was temporarily closing KFC outlets "in response to challenging economic conditions", according to Reuters.

The statement did not specify how many outlets would face closure but local media reports said over 100 branches will be shut.

"QSR Brands and KFC Malaysia has taken proactive measures to temporarily close outlets as means to manage increasing business costs and focus on high engagement trade zones," it said in a statement late on Monday.

Employees from the affected stores were offered the opportunity to relocate to outlets in areas with higher customer engagement, the statement added, failing to address the local media reports of the boycotts.

Malaysia has been a staunch supporter of the Palestinians, and some Western fast-food brands in the country, as in some other Muslim nations, have been targeted by boycott campaigns over US support for Israel's military offensive in Gaza.

"KFC is not on the (Palestinian-led movement) BDS (Boycott, Divestment, Sanctions) list of targeted companies. But many Malaysians see any American fast-food operator to be related to Israel including KFC," Mohd Nazari Ismail, chairman of pro-Palestinian group Boycott, Divestment, Sanctions Malaysia, was quoted as saying in regional media.

KFC was the latest American food franchise to be targeted by the national boycott movement in the country over US support for Israel.

Fast-food giant McDonald's, which sparked outrage when its Israeli franchise donated thousands of meals to the Israeli military after the start of the war on Gaza on 7 October, reported in February that the Gaza boycotts had "meaningfully impacted" its sales, particularly in the Middle East and Muslim-majority countries like Indonesia and Malaysia.

In April, McDonald's bought out all the franchise restaurants in Israel after seeing the sales hit, taking direct control of the operations.

American coffee chain Starbucks was also hit by pro-Gaza boycott, reporting "record losses" in December after it sued the Starbucks Workers United union in October over a pro-Palestine social media post.

Malaysia has been vocal in condemning Israel for its war on Gaza which has killed more than 34,000 people – around two-thirds women and children - since 7 October.