McDonald’s MY aims for 750 outlets by 2030 amidst boycott: Is the plan feasible?

Amidst ongoing calls for a boycott and a legal battle with the Boycott, Divestment and Sanctions (BDS) Malaysia, McDonald’s Malaysia is reportedly looking to expand its fleet of outlets to 750 nationwide by 2030.

According to a report by Free Malaysia Today (FMT), the brand currently has 370 restaurants across Malaysia, with 32 new outlets opened in 2023. The report also noted that Azmir Jaafar, managing director, local operating partner, and president of Ronald McDonald House Charities (RMHC), was looking to open restaurants in suburban or rural areas such as Gemas, Rasah, and Mambau to meet customer’s demands.

This was reportedly intended to provide easier access to its customers and broader job opportunities for local communities, with the estimation that one McDonald’s restaurant provides 50 to 100 job opportunities for locals.

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This doesn’t include vendors or local contractors involved in the construction or maintenance of the restaurant. The new restaurants are also expected to create new opportunities for locals to lean new skills and improve their economic status.

According to Jaafar, the fast food chain intends to make every effort to provide assistance to those in need through various community activities despite the ongoing boycott and legal challenges the restaurant is facing locally.

Jaafar was referencing a civil suit that McDonald’s Malaysia recently filed against BDS Malaysia, a movement promoting boycotts against Israel, for false and defamatory statements and for allegedly inciting the public to boycott McDonald's Malaysia. It claimed that these statements hurt its business and are currently seeking damages amounting to US$1.31 million.

"We have been transparent and consistent with our communications that McDonald's Malaysia does not support nor condone the current conflict in the Middle East and like all Malaysians, our utmost sympathies go out to the innocent victims in Gaza," said McDonald’s in a statement to MARKETING-INTERACTIVE.

It reiterated that it does not channel any sales, profits, royalties or franchise fees from restaurant operations to support any political cause or conflict in any part of the world, adding:

While we understand and respect that the act of boycotting is an individual decision, we believe that it should be based on true facts and not false allegations.

In response, BDS Malaysia said that it denies defaming the restaurant chain and that it would resolve the matter in courts, according to media reports.

BDS Malaysia's chairman, Nazari Ismail, also reportedly said that the group had only supported the efforts of Malaysians looking to boycott the fast-food chain and that it did not hold any campaigns. He argued that the group simply supported the movement and that it did not oppose or start it.

The legal battle with BDS Malaysia has led to divided sentiments towards the brand. Some have argued that boycotting a major entity such as McDonald’s could negatively affect the Malaysian economy. Meanwhile, others cited ongoing royalty payments to its Israeli parent company, despite Saudi Arabian ownership, arguing that a boycott is still justifiable.

Given the currently divided sentiments towards McDonald’s Malaysia and the challenging political situation it is operating in, how would an expansion plan work for the brand? A+M spoke to several industry heavyweights to find out how McDonald’s Malaysia can successfully expand and appeal to its consumers amidst a challenging business environment.

Communicating empathy for the political climate

According to Stefanie Braukmann, general manager for SPRG Malaysia and honorary secretary of Public Relations and Communications Association of Malaysia (PRCA), it is paramount for McDonald’s to demonstrate that it deeply understands and respects the local political and cultural sentiments as it delves into expansion plans.

Braukmann emphasised that this would require the brand to listen to the community, engage in dialogues and addressing concerns transparently. She also highlighted the potential for McDonald’s to build on its past efforts in community-driven initiatives and tailored CSR programmes to maintain and rebuild consumer trust.

These can help the brand to continue resonating with local values and contribute positively to society, she added.

“Maintaining clear, honest, and consistent communication regarding issues such as the lawsuit and boycott concerns, is vital to successfully steer the brand through this challenging period,” Braukmann explained.

Justifying the expansion amidst the political climate

In particular, she stated that this would require a proactive and transparent approach to crisis communication, involving transparency about the lawsuit, addressing boycott concerns head-on, and showing empathy towards the public sentiment.

To justify its expansion plans amidst the current political climate, Braukmann added that McDonald’s will need to frame its plans with appropriate sensitivity to the ongoing issues. She said:

Acknowledge the challenges and highlight how the expansion will bring positive changes, such as job creation, community development, or enhanced customer experience.

Agreeing with her point, Ashvin Anamalai, chief executive officer at DNA Creative Communications said that McDonald’s Malaysia should authentically connect with local values and communities as it navigates the divided sentiments. He said:

“Transparent communication, cultural understanding, and positive contribution showcases are pivotal in rebuilding trust.”

According to him, actions such as seeking feedback and demonstrating a commitment to inclusivity can enable a brand to engage on a human level with the community.

Anamalai added that leveraging its strong presence and employing a strategic communications approach underscored by authenticity and a resolute commitment to customers and the community will be necessary.

By addressing political concerns directly and authentically, Anamalai explained that McDonald’s will be able to demonstrate a sincere understanding of prevailing issues and foster trust among its diverse customer base amidst its expansion.

On an operational front, he also highlighted the importance of self-reflection for the brand to adapt and align strategies, campaigns, and menu options to local sentiments. This will underscore a genuine understanding of the cultural landscape.

“Building trust requires consistent, two-way communication, openly acknowledging challenges, and showcasing resilience,” he said.

“Emphasising a steadfast, long-term commitment to Malaysia, both in business operations and socially responsible practices instils a sense of security and loyalty,” he added, noting that this approach can carry McDonald’s successfully through its expansion and forge a lasting and positive bond with its audience.

Resonating with the Gen Z consumer

Anamalai also highlighted that the brand should prioritise authentic messaging that aligns seamlessly with Gen Z’s values. “Leveraging digital platforms, McDonald’s can craft content that resonates with the genuine concerns and aspirations of Gen Z, establishing a connection beyond conventional marketing,” he said.

“Essentially, what they would want to do is position McDonald’s as a community partner actively engaged in local initiatives,” Anamalai said, noting that a visible commitment to community values can not only justify expansion, but also solidify the brand’s role as an integral contributor to societal wellbeing.

This is clearly something McDonald’s already has set its sights on. In fact, Jaafar noted that the chain is committed to continue working for the community. It recently revealed that it donated RM110,000 to the Negeri Sembilan State Islamic Religious Council (MAINS) in 2023 for distribution to those in need.

McDonald’s staff throughout Malaysia also reportedly raised an additional RM100,000, donated to MyCARE to assist the people of Palestine, according to FMT. 

Adding to his point, Braukmann noted that proactive outreach, engagement, and communication with the local community, along with a specific targeting of Gen Z through digital engagement, sustainability, and innovation should characterise this approach. She added that as the most socially and environmentally aware generation, utalising digital platforms for social media campaigns and digital story-telling that resonate with their values and interests is key.

“McDonald’s must highlight its efforts in sustainability, ethical sourcing and responsible business practices to address Gen Z’s concerns about sustainability and ethical practices,” she added, emphasising the importance of demonstrating genuine commitment to and real involvement in social issues.

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