U.S. restaurant giants dodge anti-American sentiment overseas

KFC, McDonald’s and other U.S. brands don’t appear to be having issues with consumer anger. | Photo: Shutterstock.

Anti-American sentiment is growing in some countries around the globe amid a burgeoning trade war, but that doesn’t appear to be hurting major U.S. brands, at least not yet. 

Both Yum Brands and McDonald’s, the two largest operators of restaurants outside the U.S., said this week that they’re not seeing any impact from any such sentiment on their brands.

“We obviously monitor this and any other kind of consumer change behavior,” David Gibbs, CEO of Yum Brands, the parent of KFC, Pizza Hut and Taco Bell, told analysts this week. “We have not seen any anti-American sentiment impact our stores.”

Anti-American sentiment is definitely rising among global consumers. Global views of the U.S. were “generally positive” at the end of the Biden Administration, according to Morning Consult. Yet global favorability of the U.S. has fallen by 20 points since January amid the Trump Administration’s aggressive use of tariffs, which has ignited a global trade war.

McDonald’s CEO Chris Kempczinski on Thursday said his company likewise surveys consumers in global markets on three issues: Their views of America, their views of American brands and their views of McDonald’s. 

“The good news from our perspective is that there has been no change in how the consumer globally feels about the McDonald’s brand,” he said. “So we’re not seeing anti-American sentiment have any impact on our business.”

But the company is seeing anti-American sentiment, period, which is up “8-10 points,” with the biggest change in Northern Europe and Canada, but with little change in Latin America or Asia. “While there has been an uptick in general in anti-American sentiment, that’s had no impact on our business,” Kempczinski said. 

McDonald’s and Yum’s comments are important because of their massive exposure to international markets. McDonald’s has 30,000 locations outside the U.S., for instance. Yum’s KFC, meanwhile, has 28,000 locations outside the U.S. Its Pizza Hut brand, meanwhile, has 14,000 locations. 

Several other brands have a major presence globally, including Starbucks, Burger King, Domino’s and the sandwich giant Subway. 

Anti-American sentiment can influence sales at Western brands and many companies are coming off just that. Several of the aforementioned chains had serious challenges last year as consumer views on America’s policy in the Middle East hurt sales at Western brands in many global markets. McDonald’s in particular ended up acquiring its Israeli operator over that issue.

The global trade war is already having at least some impact on U.S. businesses. Tourism from places like Canada and parts of Europe is dropping in part because of anger over American trade policy. Visits to Las Vegas, for instance, are down this year. All that could hurt restaurant sales in tourism-dependent markets, particularly if that worsens.

Morning Consult said there is evidence that some U.S. brands are seeing drops in “purchase consideration” among overseas consumers. 

That has yet to be felt in a major way by U.S. brands. At KFC International, for instance, same-store sales increased 5% outside of China. Many markets are recovering from the Middle East-related downturn. Yet, Gibbs said, “that growth is actually widespread.” 

Same-store sales at McDonald’s varied a bit more. In its more developed markets, such as the UK, Australia and Germany, same-store sales declined 1%. But the company suggested economic issues were more at play. They rose 3.5% in developing markets, notably the Middle East and Japan.

At Starbucks, which operates more than 22,000 locations outside the U.S., same-store sales rose 2% in international markets, easily outperforming the company’s domestic stores. 

Domino’s, which operates more than 14,000 international locations, said that international same-store sales rose 3.7%.

The brands might be able to escape consumer ire because they’re franchised brands. At least that’s one explanation from McDonald’s CFO Ian Borden. 

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