EGS Biweekly Global Business Newsletter Issue 89, Tuesday, August 22, 2023
Edited and curated by: William (Bill) Edwards, CFE, CEO of Edwards Global Services, Inc. (EGS)
Introduction: In this issue, Barbie on the menu in restaurants? A new McDonald’s® brand, Subway® sold? The world’s 50 most valuable companies, travel to be US$15 trillion by 2035, more flights to China soon, Latin American banks lowering interest rates, inflation remains high in the UK, Germany sees a slowdown while the US heads for 5%+ GDP growth (?).
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
“The best way to predict the future is to create it.”, Abraham Lincoln
“You miss 100% of the shots you don’t take.”, Wayne Gretzky
“If you really look closely, most overnight successes took a long time.”, Steve Jobs
Highlights in issue #89:
- Brand Global News Section: CosMc®, Jollibee®, Marrybrown®, Potato Corner®, Rally’s & Checkers®, Subway®, Wendys®
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Interesting Data and Studies
“The 50 Most Valuable Companies in the World in 2023 – Market capitalization, or market cap, is one measure of a company’s value as determined by the stock market. It is easily calculated by multiplying the company’s outstanding shares by its current share price. In this graphic, we present a treemap chart that visualizes the world’s top 50 publicly-traded companies by market cap, using data as of Aug. 16, 2023. Altogether, the 50 most valuable companies represent over $26.5 trillion in shareholder value. At a sector level, Information Technology is the most represented in the top 50, with $9.3 trillion in combined market cap. The next biggest sectors are Consumer Discretionary ($4.0 trillion) and Health Care ($3.3 trillion).”, Visual Capitalist, August 20, 2023
“The Rise and Fall of WeWork – Despite its recommitment to core business fundamentals in the last few years, WeWork’s management—which saw a shakeup in May 2023 when CEO Sandeep Mathrani departed—is setting off a signal flare about the company’s future. WeWork was founded in 2010 by Adam Neumann and Miguel McKelvey with the primary objective of providing shared workspaces catered to freelancers, startups, and companies seeking ‘flexible office solutions.’ The business model, which rested on renting space from developers long-term, renovating and parceling the property, and subsequently leasing it out to short-term clients, thrived in a decade of low interest rates.”, Visual Capitalist, August 16, 2023
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Global Supply Chain, Energy, Commodities, Inflation & Trade Issues
“U.S. Importers Are Absorbing Higher Shipping Costs This Summer – Container lines have reversed a big drop in freight rates this year, but experts say the price increases may be short-lived. Costs to ship goods from Asia to the U.S. are turning sharply upward, but American importers appear to be absorbing the higher prices after watching freight rates plummet this year from record highs. The average spot rate to ship a 40-foot container from China to the U.S. West Coast rose 61% during the six weeks through Aug. 15 to $2,075….”, The Wall Street Journal, August 16, 2023
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Global & Regional Travel Updates
“Travel Will Represent a $15.5 Trillion Economy by 2033 – Data from the World Travel & Tourism Council points to global tourism’s significant growth in the next decade. That includes the US, where travel will soon be worth $3 trillion. As a whole, the industry will employ up to 430 million people by 2033, compared with 334 million in 2019. That accounts for roughly 1 of every 9 jobs globally. In 2033, China’s travel sector is forecast to contribute $4 trillion and will make up 14.1% of the Chinese economy. By contrast, the US industry is projected to reach $3 trillion and will represent 10.1% of the US economy.”, Bloomberg, August 21, 2023
“Hilton bets on China’s middle class as it eyes about 730 hotels in next 10 years – The operator of Waldorf Astoria and Conrad hotels said its performance received a boost from Chinese travellers this year. Hilton said its properties in Asia-Pacific stood out in the second quarter, with revenue-per-room surging 79 per cent year on year. Hilton, which was previously majority owned by HNA Group until 2019 before the Chinese conglomerate fell into financial difficulties, currently manages 512 hotels in 170 destinations across China. It had closed 60 per cent of its properties across Asia-Pacific at the height of the pandemic that ravaged the industry for three years between 2020 and 2022.?, South China Morning Post, August 20, 2023
“Delta Air Lines to Expand China Flights For Winter Season – Delta Air Lines is gearing up for an extensive flight schedule expansion to China. The airline will introduce 10 weekly China flights to Shanghai-Pudong International Airport from its Seattle-Tacoma International Airport and Detroit Metropolitan Wayne County Airport hubs. These new services will kick off on Oct. 29, featuring daily flights from Seattle-Tacoma International Airport and three weekly flights from Detroit Metropolitan Wayne County Airport. Delta Air Lines is reinstating a four-times-weekly Shanghai Pudong International Airport route from its Los Angeles hub in March next year. In doing that, the company brings back a route that was last operational in February 2020.”, Travel Noire, August 19, 2023
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Country & Regional Updates
China
“New Indicator Shows China’s Consumers Are Spending — on Services. Retail sales of services jumped 20.3% year-on-year in the January to July period compared with 7.3% growth for overall retail sales. Spending on services now accounts for more than 40% of the nationwide per capita consumption expenditure. The surge in retail sales from services this year was fueled by pent-up demand for culture, sports, health care and business services.”, Caixing Global, August 18, 2023
“China’s 40-Year Boom Is Over. What Comes Next? The economic model that took the country from poverty to great-power status seems broken, and everywhere are signs of distress. Economists now believe China is entering an era of much slower growth, made worse by unfavorable demographics and a widening divide with the U.S. and its allies, which is jeopardizing foreign investment and trade. The International Monetary Fund puts China’s GDP growth at below 4% in the coming years, less than half of its tally for most of the past four decades. Capital Economics, a London-based research firm, figures China’s trend growth has slowed to 3% from 5% in 2019, and will fall to around 2% in 2030.”, The Wall Street Journal, August 20, 2023
Germany
“Can Germany fix its economy? Ukraine war, higher rates and sluggish trade aggravate longstanding structural problems in EU powerhouse. The IMF and OECD both expect Germany to be the worst-performing leading economy in the world this year. A big reason is the global downturn in manufacturing, which hits Germany disproportionately hard as the sector contributes a fifth of its overall output — a similar level to Japan, but almost double that of the US, France and the UK.”, The Financial Times, August 20, 2023
Latin America
“Latin American Central Banks Take Lead in Cutting Rates as Inflation Cools – Recalling past hyperinflation, region’s central bankers raised rates before Federal Reserve acted. As inflation eased in Chile, the country became the first major emerging market to reduce interest rates during the current cycle. Latin America’s pivot to trim back high interest rates comes as a region rich in oil, copper and lithium struggles to rebound after posting some of the world’s biggest economic contractions during the pandemic. The easing of monetary policy doesn’t mean Latin American officials are anywhere close to reviving sluggish economies, according to analysts. Instead, they are gradually moving to what economists call neutral interest rates in line with countries’ typical inflation targets….”, The Wall Street Journal, August 17, 2023
Singapore
“Singapore workers are the world’s fastest in adopting AI skills, LinkedIn report says – Workers in Singapore are the world’s fastest when it comes to adopting artificial intelligence skills, according to LinkedIn’s latest Future of Work report.The report, which drew data from 25 countries, found that Singapore has the highest “diffusion rate” — the share of members adding AI skills to their profiles grew 20 times from January 2016. That’s significantly higher than the global average of eight times, LinkedIn told CNBC Make It.”, CNBC Make It, August 20, 2023
Thailand
“Thai economy likely grew 3.1% in Q2 on higher tourist arrivals – On a quarterly basis, gross domestic product (GDP) was forecast to have grown by a seasonally-adjusted 1.2%, a slowdown from the 1.9% growth in the preceding quarter, according to a smaller sample of forecasts in the Aug. 14-17 poll. While the country’s tourism-driven economy is expected to improve gradually, visitor numbers are still well below pre-pandemic levels. Thailand is predicted to receive 29 million tourists this year, down from 40 million visitors in 2019, the last full year before the COVID pandemic.”, Reuters, August 18, 2023
Turkey
“Turkish Inflation Outlook at Its Worst in 21 Years on Weak Lira – Central bank survey puts year-ahead inflation estimate at 42%. Turkey finding it hard to curb prices after cheap money era. The lira is projected to lose more than 20% of its value against the dollar during the same period, fueling price increases, according to forecasts published by the central bank on Friday. The central bank expects inflation to decelerate after peaking in the second quarter of next year, as policymakers continue to gradually increase the cost of money.”, Bloomberg, August 18, 2023
United Kingdom
“UK inflation falls to 6.8% – Inflation fell to 6.8 per cent in the year to July, down from 7.9 per cent in the year to June. The consumer prices index reading from the Office for National Statistics was in line with expectations. It means that UK inflation has fallen to its lowest level since Russia’s invasion of Ukraine. Falling gas and electricity prices were the main reason that price growth fell. Food inflation, while still rising, has moderated, leading to an easing in the annual inflation rate. However, this was offset to some extent by upward pressure from the cost of hotels and air fares. The key measure is now surpassed by wage growth, which is running at a record 7.8 per cent.”, The Times of London, August 16, 2o23
United States
“This Fed GDP forecast has the U.S. growing 5.8% in the third quarter. Higher interest rates have not spawned a much predicted recession. Could the economy be growing even faster despite rising interest rates? Sure seems so. The Atlanta Federal Reserve’s GDPNow forecast for the third quarter was just raised to a heady 5.8% annual rate. The Atlanta Fed’s forecast was lifted from 5% after the government on Wednesday reported an increase in new house construction and industrial production in July. Most Americans who want a job can find one and lots of companies are still hiring. The unemployment rate sits near a 55-year low of 3.6% and wages are rising faster than inflation for the first time in a few years.
That’s kept consumer spending — the main engine of the economy — motoring ahead.”, MarketWatch, August 17, 2023
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Brand & Franchising News
“Buyout firm Roark Capital to buy Subway sandwich chain for US$9.6bn – The secretive private equity group, which specialises in buying restaurants, had been competing for months with Sycamore Partners and TDR, among others, for the fast-food chain. Subway’s board is expected to meet later this week to determine the auction winner, but Roark was the lead candidate as of Monday, said those informed about the talks.”, The Financial Times, August 21, 2022
“Barbie momentum expands beyond the box office and into restaurants – Some concepts that embraced Barbie-themed menu promotions are reporting new customers and double-digit sales lifts. Cold Stone Creamery, for instance, is offering an All That Glitters is Pink flavor, with pink cotton candy ice cream, graham cracker crust, dance party sprinkles and whipped topping, while Pinkberry launched a Barbie Land Berry Pink Swirl, featuring dragon fruit and strawberry flavors and topped with “dream sprinkles.” The Barbie Frappuccino – a secret menu item at Starbucks – proliferated on social media shortly before the movie’s release.”, Nation’s Restaurant News, August 17, 2023
“Beyond Borders — How Successful Franchises Thrive in Diverse Markets. Successful franchises can adapt and deliver their products and services in any corner of the world. Adaptability is Crucial: Whether it’s McDonald’s adjusting its menu to suit local tastes in India, Egypt, or Japan, or understanding regional preferences even within the United States, franchises that succeed globally recognize the importance of tailoring their offerings. The Brand isn’t Just the Product: While products might differ across countries, the underlying brand promise should remain consistent.”, Entrepreneur, August 14, 2023. From a book by Mark Siebert entitled, “The Multiplier Model”.
“Filipino Franchise Brands Aim For Rapid International Growth – Here in the UK, two Filipino franchise brands are starting to make their mark amongst British consumers. In the past few years, both fried chicken chain Jollibee and Potato Corner – famous for its flavoured fries – have established presences in various locations across the UK and have plans to expand further both this side of the pond and into other newly-developed international territories. It’s all part of a significant drive by the Philippine franchising industry to push their home grown brands out across the globe…..At present, around twenty Philippine-based franchises have an international reach, the majority in the fast food sector.”, Forbes, August 19, 2023
“Marrybrown – The Malaysian fast-food giant recently entered the Australian market – Marrybrown is ready to challenge the fast-food market in Australia and it isn’t planning on changing a thing on its menu. In a quick interview with QSR Media, Joshua Liew, CEO of Marrybrown, said that though he believes that localising the menu is very important, they do not currently plan on doing so in Australia. Marrybrown is currently in sixteen markets. Usually, 20% of their menu is localised. Their reason for localising is so that consumers won’t feel that Marrybrown is a foreign brand. However, recent consumer behaviour in some of their markets made them realise that this isn’t true 100% of the time.”, QSR Media AUS, August 3, 2023. Compliments of Jason Gehrke, The Franchise Advisory Centre, Brisbane
“Who on Earth is CosMc? B-list McDonald’s character gets name-checked in spinoff chain. McDonald’s announced during its second-quarter earnings call on Thursday that it will unveil a spinoff restaurant brand in 2024 that goes by the name of CosMc’s. “CosMc’s,” CEO Chris Kempczinski explained, ‘is a small-format concept with all the DNA of McDonald’s, but its own unique personality,’ adding that a ‘small handful of sites” would roll out “in a limited geography beginning early next year.’”, Fast Company, July 27, 2023
“Rally’s and Checkers are using AI chatbots for Spanish-language food orders – The not-yet-reliable automation is designed to cut down on labor costs. Checkers and Rally’s restaurants have launched the first Spanish ordering system that uses AI, Checkers restaurants announced. The system from a company called Hi Auto is already in use at 350 of those restaurants, following two months of beta testing at five locations. The system takes orders via a virtual assistant and detects the customer’s language spoken, automatically switching between English and Spanish.”, August 18, 2023
“Wendy’s to develop 200 restaurants in Australia – A new master franchise agreement for Australia has been announced by The Wendy’s Company and Flynn Restaurant Group, with the aim to open 200 restaurants in Australia by 2034. Flynn Restaurant Group is the largest restaurant franchise operator in the world and will serve as the exclusive master franchisee in Australia. It also operates restaurants for Applebee’s, Taco Bell, Panera, Arby’s and Pizza Hut throughout the US. ‘Wendy’s sees Australia as a high priority, strategic growth market and the collaboration with Flynn Restaurant Group showcases Wendy’s ambition to expand its international footprint using its franchising model,’ explained The Wendy’s Company.”, New Food Magazine, August 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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