EGS Biweekly Global Business Newsletter Issue 83, Tuesday, May 30, 2023
Edited and curated by: William (Bill) Edwards, CFE, CEO of Edwards Global Services, Inc. (EGS)
Introduction: In this issue, solar power investment is set to outstrip spending on oil production this year for the first time. There are new rules for business travel to China. The cost of renting shipping containers falls due to reduced consumer demand. Almost everyone has resumed travel at pre-pandemic levels which is driving up ticket prices.
The mission of this newsletter is to use trusted global and regional information sources to update our 1,400+ readers in 20+ countries on key global and local trends that can impact the success of their businesses at home and abroad.
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First, A Few Words of Wisdom From Others
“Don’t limit yourself. Many people limit themselves to what they think they can do. You can go as far as your mind lets you. What you believe, remember, you can achieve.”, Mary Kay Ash
“There’s no shortage of remarkable ideas, what’s missing is the will to execute them.”, Seth Godin
“The more that you read, the more things you will know. The more that you learn, the more places you’ll go.”, Dr. Seuss
Highlights in issue #83:
- Brand Global News Section: Chargrill Charlies®, Dairy Queen®, Jolibee®, Panera Bread®, Shake Shack®, Tera Wellness®
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Interesting Data and Studies
“What would humans do in a world of super-AI? The road to a general ai—one better than the very best of humanity at everything—could take longer than expected. Nevertheless, the rising possibility of ultra-powerful ai raises the question of what would be left for humans when it arrives. Would they become couch potatoes as in “Wall-E”? Here is a thought experiment, guided by the principles of economics, to provide something of an answer.”, The Economist, May 23, 2023
“Can carbon removal become a trillion-dollar business? Quite possibly—and not before time. The boom in carbon removal, whether from the air or from industrial point sources, cannot come fast enough. The un-backed Intergovernmental Panel on Climate Change assumes that if Earth is to have a chance of warming by less than 2°C above pre-industrial levels, renewables, electric vehicles and other emissions reductions are not enough. Wood Mackenzie, an energy consultancy, reckons various forms of carbon removal account for a fifth of the global emissions reductions needed to emit no net greenhouse gases by 2050. If Wood Mackenzie is right, this would be equivalent to sucking up more than 8bn tonnes of CO2 annually.”, The Economist, May 21, 2023
“How BRICS Became a Real Club and Why Others Want In – The BRICS group of emerging markets — Brazil, Russia, India and China, with South Africa added later — has gone from a slogan dreamed up at an investment bank to a real-world club that also controls a major development bank. It once might have seemed ironic to see Communist Party-ruled China embrace the Wall Street conceit. But now countries of all political stripes, including Iran and Saudi Arabia, are clamoring to join.”, Bloomberg, May 28, 2023
“Can the West win over the rest of the world? The G7 wants to build a broader alliance to resist Chinese and Russian coercion. The g7’s relative economic strength has been declining, and with it the pull of the international order it represents: the club-members’ share of global gdp in nominal terms peaked at nearly 70% in the late 1980s, but dipped to under 45% in 2021. In purchasing-power parity terms, the brics grouping, of Brazil, Russia, India, China and South Africa, has surpassed the g7’s share.”, The Economist, May 16, 2023
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Global Supply Chain, Energy, Commodities, Inflation & Trade Issues
“Solar power investment to exceed oil for first time, says IEA chief – Solar power investment is set to outstrip spending on oil production this year for the first time, the head of the International Energy Agency has said, highlighting a surge in clean energy development that will help curb global emissions if the trend persists. This year $1.7tn is forecast to be spent on clean technologies compared with $1tn on fossil fuels.”, The Financial Times, May 25, 2023
“High inflation remains geographically broad-based, even if it is lower in many parts of Asia. Inflation has started to show signs of easing from the multi-decade highs reached in many countries following Russia’s full-scale invasion of Ukraine. Central banks have reacted with a series of interest rate rises, even though higher borrowing costs could exacerbate the squeeze on real incomes.”, The Financial Times, May 24, 2023
“The Dipping Cost of Shipping – A little over one year ago, congestion at America’s West Coast ports were making headlines, and the global cost of shipping containers had reached record highs. Today, shipping costs have come back down to Earth, with some routes approaching pre-pandemic levels. The Freightos Baltic Index (FBX)—a widely recognized benchmark for global freight rates—has fallen 80% since its peak in late 2021. A recent study from the IMF, which included 143 countries over the past 30 years, found that shipping costs are an important driver of inflation around the world. In fact, when freight rates double, inflation increases by 0.7 of a percentage point.”, Visual Capitalist, January 2023
“It Just Had an Energy Crisis, Now Europe Faces a Food Shock – Food prices continue to rise at a rapid pace, surprising central banks and pressuring debt-laden governments. The continued surge in food prices has caught central bankers off guard and pressured governments that are still reeling from the cost of last year’s emergency support to come to the rescue. And it is pressuring household budgets that are also under strain from rising borrowing costs.”, The Wall Street Journal, May 24, 2023
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Global & Regional Travel Updates
“Most companies have resumed pre-pandemic travel levels – Most companies have resumed pre-pandemic travel levels. Nearly 70% of business travelers who were polled in the American Hotel & Lodging Association’s Hotel Booking Index survey said their employers have resumed or increased pre-pandemic levels of travel. In addition, 49% of respondents said the typical length of business trips is the same as before the pandemic, with 22% reporting that trips are longer now.”, Hotel Business, May 22, 2023
“France has banned short-haul flights, but will it make an impact? In a bid to cut carbon emissions, France has officially banned domestic short-haul flights for journeys where train alternatives are in place. The ban was formally signed into law Tuesday and comes two years after lawmakers voted to end domestic flight routes where a train alternative that takes less than 2 1/2 hours is in operation. Currently, only commercial flights must adhere to the ban, and private jets will reportedly be unaffected by the restrictions.”, The Points Guy, May 24, 2023
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Country & Regional Updates
Canada
“Inflation is changing the way Canadians are spending – Inflation has been eating into Canadians’ buying power for the past two years, causing people to shop more at discount grocery stores, or make the switch to private-label products over name brands. More recently, consumer sentiment has taken a sharper turn down. This week, the Canada Mortgage and Housing Corp. warned that Canada’s household debt has surged to the highest level of any Group of Seven country.”, The Globe and Mail, May 27, 2023
China
“‘Confidence is a big problem’: China’s economic recovery loses steam – Weak property sales, industrial output and consumption sap confidence in rapid bounceback from Covid. Industrial production and profits, property sales and credit growth have all fallen short of analysts’ projections in April and early May, recent data showed, sapping confidence in the growth prospects for the world’s second-largest economy. Consumer spending, which initially jumped after the Covid-19 controls were eased at the beginning of the year, has also fallen back on a gloomy economic outlook.”, The Financial Times, May 28, 2023
“The New Rules for Business Travel to China – From burner phones to inquisitive border agents, the WSJ has consulted experts on the do’s and don’ts in an era of heightened tensions. Security advisers say the risk for foreign executives traveling to China is on the rise, following Beijing’s new anti-espionage law, raids on consulting firms that work with foreign companies and a tightening of the flow of information to the outside world. Despite any concerns, advisers say, they are getting more calls from business travelers looking to return to China for long-delayed visits to clients, suppliers and local offices now that pandemic restrictions have lifted.”, The Wall Street Journal, May 27, 2023
European Union
“Electric cars could be crucial for the EU to meet its climate goals – But only if the charging infrastructure is ramped up much faster. Fully battery-powered cars accounted for 12.1% of cars registered in the European Union (eu) last year, compared with 9.1% for evs in 2021 and just 1.9% in 2019. A wider category, alternatively powered vehicles (apvs), which lumps together pure electric and plug-in and non-plug-in hybrids, made up more than half the eu car market during the last quarter of 2022, with over 1.3m vehicles registered in total. It was the first time that apvs surpassed purely hydrocarbon-powered cars.”, The Economist, May 22, 2023
Germany
“Fall in German GDP increases threat of sustained recession in EU’s largest economy – First-quarter decline, on weak consumer and industrial activity, is second consecutive contraction in output. Economists said the second consecutive quarterly decline in GDP — output contracted by a downwardly revised 0.5 per cent in the final quarter of last year — met the technical definition for Europe’s industrial powerhouse to be in a recession. Most analysts expect Germany to achieve weak growth this year.”, The Financial Times, May 25, 2023
India
“India’s Economy Is Buzzing But Weaker Exports Could Be a Drag – Record tax mop-up, boost in services serve as growth drivers Weakening global demand, rising unemployment sour optimism. India’s economic activity picked up pace in April on record tax collections and a booming services sector though rising unemployment and weaker trade metrics could sap some sentiment.”, Bloomberg, May 23, 2023
“Apple supplier list shows gradual production shift from China to India – Apple’s Supplier List, published in May, represents 98% of the company’s direct spending on materials, manufacturing, and assembly of products for the fiscal year of 2022. The list is extensive, covering almost all manufacturers of note within its supply chain. According to SCMP, the list changes has Apple removing 19 suppliers while adding 18, on a global basis. For China specifically, eight companies were cut from the list, while only five were added.”, Apple Insider, May 29, 2023
Ireland
“Ireland’s Population Tops 5 Million for the First Time Since 1840s – After decades of continuous decline in the Irish population since 1841, it is now 83% higher than its low point in 1961 when the total was 2.8 million. There was an increase of almost 390,000 people living in Ireland between 2016 and 2022, with statisticians saying that this was because of the natural increase – the number of people who died subtracted from the number of people born in Ireland – and net migration – the number of people arriving minus the numbers of people leaving Ireland.”, Bloomberg, May 30, 2023
Russia
“Brands were not treated like partners – The number of new franchises this year may be reduced. Due to the crisis at the end of this year, according to experts, the market will be replenished with only 500 new franchises. This is 16% less than it was a year ago. The reduction of the segment is due to a decrease in the interest of entrepreneurs in such a business development model. Now they are least interested in opening franchises for retailers, vape shops and beauty salons. In 2023, about 500 new franchises will enter the Russian market, which is 16% less year-on-year, follows from the TopFranchise.ru report, which Kommersant has read.”, Kommersant.ru, May 24, 2023. English translation compliments of Paul Jones, Jones & Co., Toronto
Singapore
“Singapore’s Q1 GDP contraction raises recession risk – China revival key. Singapore’s economy contracted in the first quarter, raising the risk of a recession in the city state as the global economic outlook weakens and major trading partner China struggles for a post-COVID lift-off. Singapore, a major financial hub, is reliant on trade flow to keep its economy humming, though external demand has faltered in the wake of rising borrowing costs and still-strong inflationary pressures.”, Reuters, May 24, 2023
“Singapore ranks as most expensive city in Asia to buy or rent, as home prices in Hong Kong return to 2017 levels – In terms of affordability, the median private home price in Singapore was 13.7 times the median household income, according to a new report. Singapore’s median private-sector home price increased more than 8 per cent in the past year, it said, while Hong Kong’s fell 8.7 per cent.”, South China Morning Post, May 30, 2023
United Kingdom
“UK inflation falls to 8.7% in April but food prices still rising – Consumer prices rose at their slowest rate in a year in April but in worrying news for households and the government key measures of prices continued to rise. Worryingly, food price inflation remained close to historic highs at 19.1 per cent in April compared to the same period last year. Surging food prices have hit household budgets and prompted an inquiry from the UK’s competition authority. A closely watched measure of core inflation, which captures the strength of underlying inflationary pressures that excludes energy and food, accelerated from 6.2 per cent to 6.8 per cent, the highest rate in 31 years.”, The Times of London, May 24, 2023
United States
“U.S. holiday air passenger travel tops 2019 pre-COVID levels – The TSA said nearly 9.8 million passengers were screened or passed though security checks over the four-day weekend, about 300,000 more than over the same holiday period in 2019, the agency said on Tuesday. Reuters, May 30, 2023
“What Costco’s Baskets Reveal About Consumer Finances – The upper middle class is feeling the economic squeeze too. The retailer on Thursday said comparable sales excluding fuel in constant currency rose 3.5% in the quarter ended May 7 compared with a year earlier—lower than the 4.2% growth Wall Street analysts expected. It was also the weakest comparable sales growth Costco has seen since 2017. This follows Dollar Tree DLTR 4.24%increase; green up pointing triangle reporting more business from shoppers who earn annual incomes of $80,000 or more in its stores.”, The Wall Street Journal, May 26, 2023
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Brand & Franchising News
Shake Shack Follows McDonald’s and Burger King But In a New Way – Shake Shack is taking competitors ideas and trying to make it better. Shake Shack only just entered the fast-food market in 2004, but already serves roughly 80 different countries with over 360 locations and had $900 million in revenue in 2022. Shake Shack debuted its Veggie Shack after years of testing, and it may have finally found its match.”, The Street, May 27, 2023
“Panera Bread parent announces CEO transition as it prepares for ‘eventual IPO’ – JAB Holding is preparing to take Panera Brands public through an initial public offering by switching up its leadership. Panera Brands CEO Niren Chaudhary will be succeeded by Einstein Bros. Bagels CEO Jose Dueñas, effective July 1. The restaurant company’s revenue surpassed $4.8 billion last year.”, CNBC, May 23, 2023
“From one chicken shop to a private equity buyout – Chargrill Charlie’s co-founders are convinced the chain will one day be a national player, with the deeper pockets of its new private equity owner better able to drive growth beyond its Sydney roots. Chargrill Charlie’s will sit alongside the bigger fast food brands of Red Rooster, Oporto and Chicken Treat already housed in the Craveable Brands stable.”, The Financial Review, May 9, 2023. Compliments of Jason Gehrke, The Franchise Advisory Centre, Brisbane
“Berkshire’s Dairy Queen considers Australian expansion – Dairy Queen chief executive Troy Bader said Australia was a logical market for expansion, but that more work needed to be done on the cost of logistics and consumer tastes. The Financial Review, May 9, 2023. Compliments of Jason Gehrke, The Franchise Advisory Centre, Brisbane
“Shanghai gym chain secures new investment amid unhealthy speculation – Shanghai’s largest gym chain Tera Wellness has announced a new round of financing worth 115 million yuan (US$16.4 million), amid speculation over store operation and refunding woes. The investment, led by Junzhuo Capital Investment, is the biggest fund-raising effort in China’s pandemic-hit gym industry in recent times, and the money will be used to improve its overall store operation and explore business opportunities like metaverse fitting, the gym brand said on its WeChat account on Tuesday afternoon. Tera Wellness, founded in 2001 in Shanghai, has 150 outlets nationwide (many in Shanghai) and 1.3 million members.”, Shine.cn, May 23, 2023. Compliments of Paul Jones, Jones & Co., Toronto
“Jollibee Foods exits Vietnamese restaurant chain Pho24 joint venture – Jollibee Foods Corporation’s subsidiary SuperFoods, which owns Highlands Coffee, has transferred all of its assets of Vietnamese noodles chain Pho24 to East-West Restaurant Concepts. Founded in 2003 by Vietnamese businessman Ly Quy Trung, Pho 24 currently has 14 stores in Vietnam. East-West Restaurant Concepts is wholly owned by Viet Thai International Joint Stock Co and based in Vietnam.”, Inside Retail, May 16, 2023
“Sweetgreen’s Salad Robot Is Almost Ready for Lunch – Automating food prep is harder than it seems. ‘We’ve been trying to be very quiet about it, because it’s not proven out, and we don’t want to promise anything.’ Nathaniel Ru, Sweetgreen’s co-founder and chief brand officer, is standing inside a soon-to-open location of the bougie salad chain. He’s talking about a steel-and-glass contraption the size of a 1960s computer mainframe that’s looming behind the front counter. The device is called the Infinite Kitchen, and its job will be to assemble the hundreds of harvest bowls, kale Caesars and many other permutations of kinda-fancy salads this restaurant will churn out daily.”, BusinessWeek, May 17, 2023
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Our Mission, Information Sources & Who We Are
Our biweekly global business update newsletter focuses on what is happening around the worldthat 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™ on the ground covering 25+ countries provides us with updates about what is actually happening in their specific countries.
William “Bill” Edwards: Global Advisor Is Uniquely Qualified to Steer Sr. Executives Successfully Through the Complex Waters of Going Global.
With four decades of successful international business experience spanning virtually every corner of the world and many business sectors, Bill Edwards understands the global business landscape like no other. He has been a County Master Franchisee in five countries in Asia, Europe and the Middle East; the Senior VP for a franchisor operating in 15 countries and a full-service consultant taking 40 franchisors global.
For a complimentary 30 minute consultation on how to take your business global successfully, contact Bill Edwards at bedwards@edwardsglobal.com or +1 949 224 3896.
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