Starbucks and McDonald's both face a major problem - and it's not just plunging sales or high prices

McDonald's and Starbucks share the accolade of being the biggest - and, in the past at least, the best - at what they do.

But they now have three other unwanted things in common.

They have both been lambasted for putting up prices in the past two years. And that has led both to lose customers - as they admitted this week in their latest earnings.

On Monday, McDonald's reported its sales had fallen for the first time in years. The next day Starbucks reported its second quarter in a row of dismal sales. 

But the third thing is that they have both also been hit by boycotts over their perceived support of Israel.

McDonald's missed its earnings and revenue estimates for the second quarter of the year

Chris Kempczinski, McDonald's president and CEO admitted boycotts have been damaging 

Read More

McDonald's has quietly launched a new, bigger burger - but there's a catch

McDonald's CEO Chris Kempczinski summed up the problem when he was talking to CNBC on Wednesday. 

He said the chain had been hit by organized boycotts  following the outbreak of the Israel-Hamas war last October. 

'We're seeing broadly western brands have been a target for some of what has happened after the outbreak of the war in the Middle East,' Kempczinski told the broadcaster on Wednesday.  

'It's a terrible situation [in terms of] what's going on over there and it is impacting our business in some markets.'

Kempczinski clarified that the franchise is 'not taking a side on this.' 

'For us we're about supporting communities and that's what we're going to continue to do here,' he added.

The boycott was sparked after an Israeli franchisee, Omri Padan, offered free meals to Israeli soldiers going into Gaza in the days following the October 7 Hamas terror attacks. 

The boycott is being run by Boycott, Divestment, and Sanctions (BDS), a nonviolent movement aiming to pressure Israel over its conduct in the war. 

'McDonald's is now really feeling the BDS heat,' Omar Barghouti, co-founder of the movement, told Fortune on Tuesday. 

'Its share price is rapidly declining, and its sales are falling globally, mainly due to the worldwide #BoycottMcDonalds campaign that we launched late last year' Barghouti added. 

McDonald's stock is down 10 percent since the start of the year.

Starbucks is experiencing a sales slump and is facing continued pressure from boycotts 

Starbuck's CEO Laxman Narasimhan said boycott were generated by 'misinformation'

Starbucks has also been hit by a boycott after it sued the Workers United union that represents baristas at more than 470 US outlets.

The company claimed a pro-Palestinian social media post from the union harmed its reputation. 

Starbuck's CEO Laxman Narasimhan said the boycott was generated by 'misinformation' about the company's position on the conflict but has not quantified how damaging the shunning has been.