Brands Are Also Mired In The Gaza Conflict

(Bloomberg Opinion) -- For much of its existence, the boycott, divestment and sanctions movement in Israel has been dismissed as inconsequential. But the tenor of boycott movements have reached a new pitch as consumers respond to the brutality of the Gaza war and Israel’s actions as an occupying force. Starbucks Corp., McDonald’s Corp., KFC Corp., and, more recently, Inditex SA’s Zara have all drawn scrutiny for how they do business in Israel or how they’ve responded to a horrific conflict.

Hamas, which sparked this most recent  outbreak of violence in Gaza in October by launching a series of gruesome terrorist attacks, is sanctioned against doing any business with the United States, of course. But Israel, home to international retailers, has long-standing business relationships with the US — and consumers have put business operators on notice that they are willing to use their spending power as a form of protest. And it’s all part of a larger consumer ecosystem in which some shoppers expect companies to reflect their outlook and values. Companies, whether they are unaware, insensitive or simply unconcerned, are taking risks by not acknowledging and responding to angry consumers.

In October, shoppers threatened to boycott Starbucks over its criticism of its workers union’s since-deleted tweet that expressed solidarity with Palestinians. Just this week, Zara drew fire for one of its ads. The campaign portrayed a model carrying a mannequin wrapped in white cloth that resembled the type of Muslim burial shrouds that have covered Gazans killed in the war. The company has since apologized, calling the ad campaign a misunderstanding and explaining that it was shot months before Hamas attacked Israel. But in light of current events, they could have chosen different photos from the campaign shoot — or simply not have run it at all.

To be sure, shopper boycotts have become so commonplace we’ve basically become desensitized to them. It would be understandable (perhaps even sensible) for brands to brush off the current uproar over the Gaza conflict as another bout of rage that will  eventually blow over. But violence in Gaza has resulted in nearly two million Palestinians forced from their homes and some 15,000 civilians and at least 6,000 children killed (though the US State Department has said the death toll could be higher).The conflict has also brought the realities of the Israeli occupation onto consumers’ social media and news feeds and may not be easily dismissed or forgotten. It’s possible that these searing images will spur broad social shifts comparable to the upheaval set in motion when television networks began to regularly broadcast images from the Vietnam War in the 1960s. 

And like US universities that have been accused of being insensitive to potential antisemitic violence,  companies have drawn attention for being insensitive or unresponsive to the graphic and disturbing images coming from Gaza.

For months, many people have followed the daily news about the slow deterioration of medical treatment at Al-Shifa Hospital in the northern Gaza neighborhood of Ramal as hundreds of maimed people and dead bodies burst through its doors. Many people have been denied the right to bury their loved ones. It’s possible that consumer responses to that misery will amount to more than just a fleeting abstention from shopping with a particular company. After all, boycotting brands perceived to be insensitive to human suffering reflects a broader shift in attitudes among younger consumers. 

For businesses, appearing unconcerned about such suffering could tarnish their already precarious standing with shoppers well aware that they have more options than ever before. US consumers reported a 14% decline in loyalty, from 79% in 2022 to 68% in 2023, according to the SAP Emarsys Customer Loyalty Index. Only about a third of Gen Z consumers are loyal to brands, and they are more demanding than other age groups about clearly understanding a company’s values. 

It’s difficult to measure how much impact boycotts have had on companies so far. Starbucks’ market cap has been hammered recently, though the company has had choppy sales that aren’t solely explained by the threat of boycotts. At least one Zara store in Glasgow, Scotland, was forced to close temporarily because of demonstrations.

Starbucks and Inditex don’t report earnings results until the new year. But with the war still ongoing, it is unlikely boycotters will just abandon actions such as slapping stickers in support of Palestinians on Starbucks windows, carrying bundles covered in white sheets in demonstration against Zara or refusing to add to the bottom lines of businesses.The long-term impact on brands from the Gaza conflict is still hard to discern. But given that it has already ensnared the reputations of politicians, journalists and celebrities, retailers and other companies shouldn’t be complacent.

More From Bloomberg Opinion:

• Israel-Hamas War Tests Left’s Views on Cancel Culture: Noah Feldman
• ‘Indiscriminate’ or Not, Israel’s Gaza Bombing Isn’t Smart: Marc Champion
• No, Palestinians Can’t Just Leave Gaza: Bobby Ghosh

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Leticia Miranda is a Bloomberg Opinion columnist covering consumer goods and the retail industry. She was previously a business reporter at NBC News and a retail reporter at BuzzFeed News.

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