Starbucks Indonesia's October 2023 Revenue Reaches US$1.21 Million; Potential Decline Due to Boycott?

Starbucks Corporation reported a net profit of US$1.21 billion, or Rp18.97 trillion (assuming an exchange rate of Rp15,565 per US$), for the quarter ending October 2023.

This profit, attributable to Starbucks, soared 38.82% year-on-year (YoY) from US$878.30 million, or Rp13.67 trillion, in October 2022.

Not only profit, but the global coffee beverage company's net revenue also increased. It recorded revenue of US$9.37 billion, or Rp145.90 trillion, in October 2023. This figure is up 11.4% (YoY) from the previous US$8.41 billion, or Rp130.96 trillion.

Starbucks stated that global store sales increased by 8% in October 2023. This was driven by a 4% increase in average ticket size and a 3% increase in comparable transactions.

International Starbucks outlets reached 20,228 in October 2023, a 10% YoY increase from 18,416 outlets in October 2022. Meanwhile, North American outlets reached 17,810 in October 2023.

Therefore, the total number of global outlets reached 38,038, including 816 new outlets opened in Q4 2023. "52% are company-operated and 48% are licensed," according to Starbucks' financial report.

Starbucks and the Boycott Issue

Starbucks became embroiled in a global boycott following the widespread Israeli attacks on Palestine since October 7, 2023. The coffee company is perceived as being affiliated with or supporting Israeli aggression.

Citing *Katadata* from *Reuters*, Starbucks is not alone. Other brands such as McDonald's and KFC are also on the boycott list. As a result, many fast-food franchise outlets are empty in several Middle Eastern countries such as Egypt, Morocco, Jordan, and Kuwait.

In Kuwait, for example, many Starbucks, McDonald's, and KFC outlets are almost empty. In Rabat, Morocco, a Starbucks employee said the number of customers had dropped significantly in the past week. Neither the company nor the employee provided specific figures.

However, Starbucks finally spoke out about the boycott calls and pro-Israel stance.

Through its official website, Starbucks denied rumors that the company supports the finances of the Israeli government and/or the Israeli Army. Starbucks is a public company and is required to disclose all company donations annually through its proxy statement.

"No. This is completely untrue," Starbucks said, as quoted by *Katadata* on Friday, November 17, 2023.

Regarding the closure of outlets in Israel, Starbucks affirmed that the company does not make business decisions based on political issues. Starbucks dissolved its partnership in Israel in 2003 due to operational challenges.

(See also: Starbucks Stock Slumps Amid Boycott of Products Deemed Pro-Israel)

Potential Decline in Sales for Boycotted Companies

Citing *Bisnis.com*, Mohammad Faisal, Executive Director of the Center of Reform on Economics (Core), sees three factors for measuring the weakening or strengthening of sales for boycotted companies.

First, public awareness of the Indonesian Ulema Council (MUI) fatwa. The MUI has issued Fatwa No. 83/2023 concerning the Lawfulness of Support for the Palestinian Struggle. This fatwa prohibits support for Israeli attacks on Palestine.

However, Faisal said that not everyone has heard of or is aware of this fatwa, whether through mainstream media or social media.

Second, assuming that all members of the public have received information about the fatwa, many people still don't know which products are considered to provide assistance to Israel.

Third, the level of adherence to the fatwa varies. Some people are aware of the haram fatwa but do not take it seriously. Others take it seriously but cannot stop buying the products for various reasons.

Considering these three factors, Faisal believes that the impact on the decline in sales of these products will occur, but it is not yet significant. In his opinion, a significant impact could occur if the effectiveness of the boycott, according to these three factors, truly expands.

"When the action lasts for a long time, it can reduce sales for a long time as well and trigger layoffs," he told *Bisnis.com* on Wednesday, November 15, 2023.

(See also: 7 Modern Coffee Shops with the Most Outlets in ASEAN, Including Kopi Kenangan and Janji Jiwa)