EGS Biweekly Global Business Newsletter Issue 61, Tuesday, July 26, 2022
Edited and curated by: William (Bill) Edwards, CFE, CEO of Edwards Global Services, Inc. (EGS)
As a 40 year China Hand, I find the “Foreign enterprises in China a decade of opportunities and transformation” article one of the most important in years as to how it for foreign brand to do business in China. We may be close to the top of the inflation curve. Will grain exports begin again soon to the Africa and the Middle East?
The U.S. trade gap narrows. A strong dollar makes this a good time for U.S. tourist in Europe. Africa and Egypt are becoming new tech start-up centers and who knew there were 13 distinct styles of fried chicken around the world?
As of this issue, 1,450 people in 20 countries receive this newsletter.
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First, A Few Words of Wisdom From Others
“If you are not willing to learn, no one can help you. If you are determined to learn, no one can stop you.” Zig Ziglar
“Keep your eyes on the stars and your feet on the ground.”, Theodore Roosevelt
“Life is like and ocean, it goes up and down.”, Vanessa Paradis
Highlights in issue #61:
- Brand Global News Section: Five Guys®, Habit Burger®, Starbucks®, Subway® and Tom Horton’s®
NOTE: Bolded headlines in this newsletter are live links to published articles where the article is freely available
Interesting Data and Studies
“Why it is too early to say the world economy is in recession – Growth in the rich world is slowing, but has not crashed to a halt. It is clear that central banks have to take the proverbial punchbowl away from the party. Wage growth in the rich world is far too strong given weak productivity growth. The few remaining optimists point to the strength of households and firms. Moreover, surveys suggest that people seem more confident about their personal finances than about the state of the economy. Across the eu as a whole, households are about one-third more likely to be positive about their own finances than they have been, on average, since the data began in the mid-1980s.
, The Economist, July 24, 2022
“According to a recent McKinsey survey, most Asia–Pacific and Greater China respondents are optimistic their economies will improve through 2022—although overall optimism has declined—whereas those in Europe and North America are more pessimistic, bracing for the worst.”, McKinsey, July 15, 2022
Global Supply Chain, Energy, Commodities, Inflation & Trade Issues
“Why the dollar is so strong – It is a good time to be an American tourist in Europe. Earlier this month the euro briefly dipped below parity with the dollar for the first time in two decades. The greenback is up by nearly 20% against that basket of currencies compared with June last year. It has climbed to heights last scaled in 2002. That is in large part because of the Federal Reserve’s hawkish shift. Determined to rein in inflation, it has increased interest rates by 1.5 percentage points since March.”, The Economist, July 20, 2022
“There are 4 possible recession scenarios, UBS says, including one where the S&P 500 rises 16% by the end of 2023 – UBS’ economic models show just a 40% chance of a recession in the U.S. over the next year. Still, the UBS team acknowledged that “the economy is flying quite low to the ground and looks vulnerable to turbulence.” The team laid out four potential recession scenarios, including one with good news for investors: an S&P 500 rebound by the end of 2023.”, Fortune, July 18, 2022
Consumer price inflation – % Annual change – The Financial Times, July 20, 2022
“When Will Inflation Subside? – We clearly are seeing the impact of inflation as it increases operating costs across supply and labor inputs in 2022. Is there relief coming from this profit-eroding upward pressure? What should we expect next year?”, Darrell Johnson, FRANdata, Franchising.com, July 22, 2022
Global, Regional & Local Travel Updates
“AirlineRatings picks best carriers in the world – 1. Qatar Airways. 2. Air New Zealand, 3. Etihad Airways. 4. Korean Air, 5. Singapore Airlines, 6. Qantas, 7. Virgin Australia, 8. EVA Air, 9. Turkish Airlines, 10. All Nippon Airways, 11. Cathay Pacific Airways, 12. Virgin Atlantic, 13. Japan Air Lines, 14. JetBlue, 15. Finnair, 16. Emirates, 17. Hawaiian Airlines, 18. Air France/ KLM, 19. Alaska Airlines and 20. British Airways”, NZ Herald, July 13, 2022
“Singapore Hotel Room Rates Hit Six-Year High as Tourism Recovers – Singapore in April became one of the first major regional economies to announce it would end all testing for incoming vaccinated travelers as the government furthered efforts for living with Covid-19. A revival of conferences and major events have also attracted visitors, and STB data showed a nearly 12-fold increase in arrivals in the first half of 2022 compared with the same period a year ago.”, Bloomberg, July 23, 2022
“Toronto Airport Is World’s Worst For Delays Amid Current Travel Chaos – Pearson International has won top honors for airport service for years, but now is at the epicenter of a global air-travel meltdown. Over 53% of flights departing Toronto Pearson between June 1 and July 18 arrived late at their destinations, according to flight-data specialist FlightAware. That was the highest rate among the world’s top 100 airports by number of flights.”, Wall Street Journal, July 24, 2022
Country & Regional Updates
Africa
“African startups are raising unprecedented amounts. What next? The continent is the only region in the world not suffering from a slowdown in venture capital. Last year 604 African startups raised a total of $5.2bn, according to the African Private Equity and Venture Capital Association (avca), an industry group. This was more than the total invested in the seven preceding years. Five of Africa’s seven “unicorns” (startups valued at more than $1bn) won their horns last year. American investors led the charge, with 357 involved in deals last year, compared with 268 in total in 2014-20.”, The Economist, July 21, 2022
Australia
“Australia’s near-record low unemployment stokes staffing crisis – Labor government discusses work visas with Pacific Island leaders to alleviate worker shortage. The unemployment rate dropped to 3.5 per cent in June, lower than the 3.8 per cent predicted by economists. In 1974, the jobless rate fell to 2.7 per cent. Data released on Thursday revealed that 88,000 more people were employed in June from the previous month and that the workforce participation rate hit an all-time high of 66.8 per cent.”, The Financial Times, July 13, 2022
“Gig economy: Workers and customers are exiting the sector. How can we make it better? The gig economy is in trouble. Rideshare drivers are cancelling in droves. Wait times for food delivery are ballooning out and driver shortages are leading to food waste.”, Smart Company Australia, July 14, 2022
China
“Foreign enterprises in China a decade of opportunities and transformation – In January 1999, Starbucks entered the Chinese mainland market by opening its first store in the China World Trade Center, Beijing’s most popular commercial center. But with a latte priced at around 20 yuan (about $2.4 back then) and the average monthly salary of Beijing residents just surpassing 1,000 yuan, coffee was a niche market at that time. It took several years for the U.S. coffee chain to get traction in the Chinese market. Since 2010, China has risen to become the largest overseas market for Starbucks. Over the past decade, the number of Starbucks stores jumped by about 9 times to over 5,700 across the country.”, Beijing Review, July 22, 2022. This important analysis was provided by Paul Jones, Jones & Co., Toronto
“China’s population expected to start to shrink before 2025 – China is battling to reverse a rapid shrinkage in natural population growth as many young people opt not to have children due to factors including the high cost and work pressure. A change in China’s laws last year to allow women to have three children has not helped, with many women saying the change comes too late and they have insufficient job security and gender equality.”, Reuters, July 24, 2022
Egypt
“Egypt’s booming startup scene is becoming the gateway to MENA – In the last few years, Egypt’s startup ecosystem has become one of the most vibrant on the continent, presenting rapid growth potential for the near future. According to a recent report by Startup Genome, Cairo, the country’s bustling capital, marked an overall increase of 60% in VC funding rounds over the past five years, and in 2021, saw a 156% increase in total VC funding rounds compared to 2020.”, The Next Web, July 25, 2022
Japan
“Japan Leaves Weak Yen Alone Despite Above-Target Inflation – Central bank sees core prices rising 2.3% this fiscal year as Japanese currency stands near 24-year low. The BOJ’s low interest rates have fueled the yen’s fall against the dollar. Last week, a dollar bought more than ¥139, the weakest level for the Japanese currency since 1998. On Thursday afternoon, the dollar was changing hands at ¥138.55.”, The Wall Street Journal, July 21, 2022
Ukraine
“First Ukraine Black Sea grain shipments could move in days – The agreement aims to allow safe passage for grain shipments in and out of Ukrainian ports, blockaded by Russia since its Feb. 24 invasion. Russia has blamed Ukraine for stalling shipments by mining the port waters. Russia and Ukraine are major global wheat suppliers, and Moscow’s invasion sent food prices soaring, stoking a global food crisis the World Food Programme says has pushed some 47 million people into ‘acute hunger’.”, Reuters, July 25, 2022
United Kingdom
“Aldi Staff Get Another Pay Rise as Brits Shift to Discounters – Aldi is giving its UK staff a pay rise for the second time this year as the German discount supermarket attracts more shoppers seeking to cope with the higher cost of living.”, Bloomberg, July 25, 2022
“Five Guys (UK) franchisee launches on-demand pay – Five Guys franchisee Life’s Food has introduced on-demand pay for its more than 200 employees, based across 23 locations in North Carolina, South Carolina and Tennessee. Through a partnership with on-demand salary provider DailyPay, Five Guys staff in Life’s Food-run locations have been given the option to access their pay immediately after finishing a shift, in a bid to provide greater flexibility and help staff manage their finances.”, Employee Benefits UK, July 22, 2022
“Starbucks explores UK business sale – Starbucks has been in the UK since 1998 and has about 1,000 outlets, of which about 70% are franchises while the remainder are owned by the firm. The company is also facing increased competition in the UK from rival coffee chains including Costa, Pret A Manger and Tim Hortons., The BBC, July 18, 2022
United States
“Survey Finds Majority of Companies Plan to Continue Hiring Despite Recession Worries – With the possibility of a recession on the horizon, 57% of American companies said they still plan to forge ahead with hiring, according to a new survey from The Harris Poll……more than half (51%) of U.S. companies think the next recession will happen within the next year. If a recession were to occur soon, more than 2 in 5 businesses (44%) feel their company won’t survive much longer. Nevertheless, companies don’t appear poised to pump the brakes on hiring like in previous recessions. 30% will continue hiring but cut back on the volume of workers, while 27% anticipate extending offers as planned.”, Franchising.com. July 22, 2022
“U.S. Trade Gap Narrowed in May as Imports of Goods Slowed – American companies, meanwhile, exported more oil and natural gas as the Ukraine crisis deepened. The U.S. trade deficit narrowed for the second consecutive month in May as imports were held down by lower goods spending by American households and exports jumped on energy shipments. The trade gap in goods and services shrank 1.3% in May from the previous month to $85.5 billion, the Commerce Department said Thursday, down from April’s revised $86.7 billion.”, Wall Street Journal, July 7, 2022
“The Top U.S. Exports by State – The U.S. exported over $1.3 trillion in goods in 2020, the second-highest amount worldwide. While refined petroleum was the top export overall at $58.4 billion, aircraft exports were actually the highest across 14 states—more than any other form of export. This infographic from OnDeck shows America’s top exports by state, using January 2022 data from the U.S. Census Bureau.” Visual Capitalist, July 19, 2022
Brand News
“The Habit Burger’s 2,000-Unit Journey Takes Shape – On the fifth page of its franchise brochure, The Habit Burger Grill quickly lets prospective operators know what type of track it’s on—more than 2,000 locations in the U.S. As it stands now, the fast casual has 330-unit restaurants in more than a dozen states. The long-term growth objective is steep, but John Phillips, chief global brand partnerships officer, has little doubt in The Habit Burger’s aims.”, QSR Magazine, July 18, 2022
“Subway is Ready to Crack its International Growth Potential – Among three biggest restaurant players in the U.S. in terms of footprint—Subway, McDonald’s, and Starbucks—the sandwich chain is the only one with a bigger domestic footprint than international. The brand believes there’s potential to double its international footprint. Subway has more than 37,000 stores worldwide, including roughly 21,000 in the U.S.”, QSR Magazine, July 15, 2022
“Tim Hortons first drive-thru-only stores will open later this summer! The unit will be just 900 square feet and will feature a mobile pickup shelf along with mobile order parking spots. This is a great model for the brand as they aim to maximize efficiency’s and cut costs while not compromising the guest experience.” LinkedIn, June 2022
Articles & Studies For Today And Tomorrow
“A Lifetime’s Consumption of Fossil Fuels, Visualized – From burning natural gas to heat our homes to the petroleum-based materials found in everyday products like pharmaceuticals and plastics, we all consume fossil fuels in one form or another. In 2021, the world consumed nearly 490 exajoules of fossil fuels, an unfathomable figure of epic proportions. To put fossil fuel consumption into perspective on a more individual basis, this graphic visualizes the average person’s fossil fuel use over a lifetime of 80 years using data from the National Mining Association and Worldometer.”, Visual Capitalist, July 22, 2022
“13 Styles Of Fried Chicken Around The Globe – Across the globe, unique styles of fried chicken can be found in street corner stalls, fast food takeaways, and family dinner tables. Thankfully, there are home cooks, expat chefs, and even entire restaurant franchises devoted to the crispy poultry sharing both traditional and modern styles of the beloved dish across regions and borders. With so many ways to marinate and season, each country’s signature style of fried chicken has evolved to reflect its distinct history, culture, and tastes.”, Tasting Table, July 25, 2022
“The 12 Covenants of Success – True success is developed and built in a multimodal fashion. There is never one sure path to any goal, or one sure path to any climb up the mountain. Success, however, can be built upon following certain covenants or formulas that have been passed down throughout history for us to utilize in our own unique ways. If you follow these covenants, success is sure to follow.”, Entrepreneur, May 19, 2022
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Our Mission, Information Sources & Who We Are
Our biweekly global business update newsletter focuses on what is happening around the world that impacts new trends, health, consumer spending, business investment, economic development and travel. We daily monitor 30+ countries, 40+ international information sources and six business sectors to keep up with what is going on in this ever-changing environment. Our GlobalTeam™ covering 43 countries provides us with updates about what is happening in their specific countries.
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William (Bill) Edwards has a four-decade career successfully accelerating the international growth of more than 40 brands. He has directed projects on-site in Alaska, Asia, Europe and the Middle and Near East and has lived in China, the Czech Republic, Hong Kong, Indonesia, Iran and Turkey. Edwards Global Services, Inc. (EGS) provides a complete International solution for companies Going Global. From initial global market research and country prioritization, to developing new international markets, providing in-country operations support and problem solving around the world. EGS has twice received the U.S. President’s Award for Export Excellence. For advice on doing business successfully across 40+ countries, contact Bill Edwards at bedwards@edwardsglobal.com or +1 949 224 3896.
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