KUALA LUMPUR - KFC has reduced its operations in Malaysia, shuttering about 20 per cent of its restaurants temporarily after months of a persistent pro-Palestine boycott of US-linked businesses triggered by the ongoing war in Gaza.
QSR Brands, which owns and operates the KFC fast-food 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 stores have had their status updated to show “temporarily closed”.
A source at QSR, who declined to be named, said the firm sees the boycott as an opportunity to cease some of the KFC store operations that have weighed on its balance sheet.
QRS said in a statement on April 29 that “in response to challenging economic conditions”, it has taken proactive measures to temporarily close outlets in order to manage growing business costs and focus on the busier KFC stores.
“Employees from the affected stores were offered the opportunity to relocate to operating stores as part of a tactical strategy to optimise resources in trade zones with higher customer engagement,” the company said.
Checks by The Straits Times on three outlets in Kuala Lumpur in Jalan Ipoh, Jalan Sultan and Taman Melawati found signs saying they were “temporarily closed”. Boxes were stacked up inside the restaurants. Workers at neighbouring stores said they were closed a week ago because of a lack of customers.
“KFC is not on the BDS list of targeted companies. But many Malaysians see any American fast-food operator to be related to Israel including KFC,” said Professor Mohd Nazari Ismail, chairman of pro-Palestinian group Boycott, Divestment, Sanctions Malaysia.
Since the boycott began in October 2023, KFC has shifted its branding strategy, with signs on their menu boards and fliers emphasising 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,” said the source.
The company’s website said its businesses provide “employment opportunities for over 30,000 employees, of whom 86 per cent are Muslims”.
In the state of Kedah, 11 outlets have closed, according to Nanyang Siang Pau.
Entrepreneur Amri Hasim from Alor Setar in Kedah said that since the boycott began, he has received many job applications from KFC workers, and that its outlets there had reduced their operating hours from 24 hours a day to 12.
“They told me that their salary has been slashed by half. Their basic salary was RM1,500 (S$430) a month and with overtime, they used to earn roughly RM2,000. Now their take-home pay is between RM600 and RM700,” said the 43-year-old who runs a family business producing goat’s milk soap.
There are more than 600 KFC restaurants in Malaysia, according to the QSR website.
KFC and a few other US-based brands such as Starbucks and McDonald’s have been facing boycotts because of their perceived link to Israel since the war in Gaza started on Oct 7, 2023.
KL-listed Berjaya Food, which owns 400 Starbucks stores in Malaysia, reported a net loss of RM42.6 million from October to December 2023, with owner Vincent Tan reportedly considering taking the company private.
QSR also operates KFC restaurants in Singapore, Brunei and Cambodia, as well as more than 480 Pizza Hut stores in Malaysia and Singapore.
North-east Kelantan state is the worst-hit with nearly 80 per cent, or up to 21 outlets, halting their operations, followed by 15 outlets in Johor, Nanyang Siang Pau said.
Selangor, the most industrialised state in Malaysia, has 11 branches temporarily closed, 10 of which are located in Malay-majority Shah Alam.
- Additional reporting by Azril Annuar
