EGS Biweekly Global Business Newsletter Issue 71, Tuesday, December 13, 2022
Edited and curated by: William (Bill) Edwards, CFE, CEO of Edwards Global Services, Inc. (EGS)
The biggest news in global business for this issue is the very rapid dismantling of ‘zero Covid’ in China. After three years of shutdowns, personal monitoring by the government, constant PCR tests, monitoring apps and little intercity travel, China is rapidly opening back up. Stay tuned to future newsletters to see what happened to mainland China’s economy.
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First, A Few Words of Wisdom From Others
“If you want the rainbow, you have to put up with the rain.”, Dolly Parton
“When creativity melds together with global issues, I believe you can bring the world together.”, Virgil Abloh
“A smooth sea never made a skilled sailor.”, Franklin Roosevelt
Highlights in issue #71:
- Brand Global News Section: Burger King®, Denny’s®, Dine Brands Global, Domino’s Pizza Enterprises (DPE), Empower Brands, McDonalds®, 9Round®, Wendy’s® and Xponential Brands®
NOTE: Bolded headlines in this newsletter are live links where the article is available without a subscription.
Interesting Data and Studies
“Global flows: The ties that bind in an interconnected world – Economic and political turbulence have prompted speculation that the world is already deglobalizing. But the evidence suggests that global integration is here to stay, albeit with nuance. Ours is an interdependent world, connected by global flows of goods, services, capital, people, data, and ideas. Global value chains have been built on these flows, creating a more prosperous world. However, in light of the pandemic, Russia’s invasion of Ukraine, and years of rising tensions between the United States and China, some have speculated that the world is already deglobalizing. New MGI analysis finds a more nuanced reality.”, McKinsey, November 15, 2022
“Around the globe, spiraling debt in low- and middle-income countries is threatening their pursuit of sustainable development. Between 70 percent and 85 percent of developing nations’ debt is in a foreign currency. So far in 2022, around 90 percent of countries have seen their currencies depreciate against the U.S. dollar. Government debt levels as a share of gross domestic product have increased by about $2 trillion.”, Geopolitical Futures, December 9, 2022
“World’s oldest DNA reveals Ice Age ecosystem – Scientists harvested eDNA from sediment thawed from permafrost in northern Greenland. Unlike genetic material from one animal, eDNA is the microscopic spoor of many different species, including plants and micro-organisms. The 2m-year-old ecosystem was home to birch trees, geese, lemmings, reindeer and even mastodons, an extinct elephantine creature.”, The Economist, December 10, 2022
Global Supply Chain, Energy, Commodities, Inflation & Trade Issues
“Globally, Home Prices Climbed a Robust 8.8% in the Third Quarter Despite Rocky Economies – The third-quarter figure is in nominal terms—that is, not adjusted for inflation—and is down from its peak of close to 11% registered during the first quarter of 2022, the brokerage and property consultant said in its analysis of 56 countries and territories around the world. Property markets that are slipping down the table are those that have seen the most significant interest rate hikes, the report said. In the past three months, Canada has moved from 10th to 34th place in the rankings, and Australia from 28th to 47th.”, Barron’s, December 8th.
“Why the price of oil has dropped despite new constraints on Russian supply – Crude settles at lowest level of 2022 after European embargo and G7 price cap take effect. This week marked a pivotal moment in global geopolitics, as a European embargo and G7 price cap on Russian crude came into force. All of this would ordinarily have sent oil prices sharply higher, especially just weeks after the Opec+ cartel surprised the market by announcing deep new supply cuts. Yet on Thursday, the international oil benchmark Brent settled at $76.15 a barrel, a new low for 2022. What is going on? But the G7’s price cap plan aims to take the edge off.”, The Financial Times, December 8, 2022
“How retailers in Europe can navigate rising inflation – With inflation at record highs throughout Europe, retailers are under more pressure than ever. Those that act quickly and follow a holistic playbook can be well positioned to thrive. In this article, we examine the current state of inflation in Europe, take a quick dive into rapidly changing consumer behavior and sentiment, and draw lessons from previous periods of economic volatility. Finally, we describe a holistic approach that can help retailers think about how to simultaneously tackle inflationary challenges and build long-term resilience.”, McKinsey, December 7, 2022
Global & Regional Travel Updates
“Airfares Set for Big Jump Again in Business and Economy in 2023 – Airfares will increase around the world next year, by as much as 12% on Europe-Asia routes and 10% for North America-Asia flights, according to American Express Global Business Travel. Asia, which was slower to lift Covid travel curbs, is set for some of the biggest changes as demand swells, Amex GBT said in its Air Monitor 2023. The region’s relatively strong economic prospects could also push up prices, it said. With Europe also seeing a shortfall of airline capacity versus demand, intra-regional airfares are expected to climb 6% in business and 5.5% in economy next year, Amex GBT said.”, Bloomberg, December 8, 2022
“Delta Will Restart Service to Cuba Next Year — What to Know. Starting April 10, 2023, the airline will fly two daily nonstop flights from Miami International Airport. Delta joins JetBlue and American Airlines, which each received permission to service more flights to Cuba. The new service also comes months after the Biden administration started allowing commercial and charter flights to fly to cities beyond just Havana.”, Travel and Leisure magazine, December 12, 2022
Country & Regional Updates
Asia
Australia
“Soaring coal delivers Chalmers a Christmas miracle – Soaring iron ore, coal and natural gas prices are set to add $58 billion to tax revenue over four years and deliver Treasurer Jim Chalmers a Christmas miracle – a federal budget bottomline temporarily in balance. But while a boon for exporters, high commodity prices are driving domestic inflation, placing huge strain on household budgets, and forcing a major intervention in the energy market by the Albanese government.”, Australian Financial Review, December 4, 2022
China
“Chinese Cities Continue Shift From ‘Zero-Covid’ – Major cities across China including Beijing, Shanghai and Guangzhou, have further eased local Covid-19 restrictions on travel and quarantine after the country announced sweeping changes to its virus control regime. Following the announcement, searches containing the key word “air tickets” surged 160% on ctrip.com. Searches for the tickets on flights departing a few days before next month’s Lunar New Year soared to the highest level in three years on the online travel service platform.”, Caixin Global, December 8th, 2022
“Shanghai Disneyland Reopens as Businesses in China Welcome Covid-Control Easing – Cautious optimism spread among foreign companies over the rollback of some zero-Covid measures, though challenges remain…..Beijing on Wednesday announced the end of many measures, including requirements covering quarantine and testing as well as restrictions on domestic travel…The policies have damaged consumer sentiment, curtailed economic growth and brought heavy disruptions to foreign businesses with large operations in the world’s second-largest economy.”, The Wall Street Journal, December 8, 2022
“China Halts Location Tracking App as Covid Restrictions Fall – Some residents say they have seen a surge in Covid cases even as official daily tallies drop. China is pulling the plug on a nationwide mobile tracking app that collects data on users’ travel movements, dismantling a symbol of one of the world’s sternest and most durable Covid-19 containment regimes even as cases continue to surge across the country. Authorities said Monday that the mobile app, a cornerstone of Beijing’s technocentric approach to throttling the pandemic, would disappear by day’s end, part of China’s swift retreat from the “zero-Covid” approach that it has adhered to for the past three years.”, The Wall Street Journal, December 12, 2022
European Union
“Where next for Europe’s industry? More evidence that factories have weathered the energy crisis well. The impact of the energy crisis on European industry continues to be debated hotly. When I (Martin Sandbu) highlighted in last week’s Free Lunch how well the continent’s manufacturing has held up, the reactions varied from denial to surprised delight. Start with Europe’s impressive ability to adapt to higher natural gas prices. My colleague Shotaro Tani added to the evidence of this, reporting on Monday that European users cut consumption by one-quarter in both October and November, relative to five-year averages. This was largely accounted for by cuts in industry demand for gas.”, The Financial Times, December 8, 2022
India
“India’s Outlook Is Surprisingly Bright – Why investors might want to park their cash in the Asian country. India’s resilient economic growth—despite global weakness—gives India’s central bank leeway to tackle inflation without worrying about a steep slowdown, particularly with Brent oil down about $40 a barrel from its midsummer highs. India’s September quarter growth came in at 6.3%, significantly lower than the previous quarter’s but much better than developed markets and many emerging markets. The RBI expects India to grow 6.8% in the current fiscal year ending in March.”, The Wall Street Journal, December 8, 2022
Mexico
“Mexican state brings back mask mandate as COVID numbers rise – A northern Mexican state reintroduced the obligatory use of face masks in closed public spaces, officials said on Monday, in a bid to reduce rising COVID-19 infections, as well as the spread of other respiratory diseases. The health minister of Nuevo Leon state, home to Mexico’s third-biggest city Monterrey, highlighted the updated guidelines in a news conference, and said that the measure will go into effect immediately.”, Reuters, December 12, 2022
New Zealand
“Air New Zealand raises first half profit outlook on travel demand – The increased profit outlook follows a moderation in fuel prices in recent weeks and assumes that the airline will fly about 75% of its pre-COVID capacity levels across the network in December, according to Air New Zealand.”, Reuters, December 7, 2022
United Kingdom
“UK banking rules in biggest shake-up in more than 30 years – The government has announced what it describes as one of the biggest overhauls of financial regulation for more than three decades. It says the package of more than 30 reforms will “cut red tape” and “turbocharge growth”. Rules that forced banks to legally separate retail banking from riskier investment operations will be reviewed.”, Yahoo News, December 9, 2022
“UK Economy Rebounds – The UK economy returned to growth in October following a 0.6 per cent fall in September, according to the latest data released this morning by the Office for National Statistics. Month-on-month gross domestic product rose 0.5 per cent. City economists had forecast growth of 0.4 per cent. September’s fall was largely attributed to the extra Bank holiday for the Queen’s funeral. In the three months to the end of October the economy contracted 0.3 per cent.”, The Times of London, December 12, 2022
United States
“U.S. third-quarter productivity raised; labor costs still running high – U.S. worker productivity rebounded at a bit faster pace than initially thought in the third quarter, though the trend remained weak, keeping labor costs elevated. Nonfarm productivity, which measures hourly output per worker, rose at a 0.8% annualized rate last quarter. That was revised up from the 0.3% pace reported last month and ended two straight quarterly decreases.”, Reuters, December 7, 2022
“Economists think inflation has peaked. Main Street is preparing for more pain – More players in the stock market and among the ranks of professional economists have come around to the view that inflation has peaked or already is in decline, but small business owners on Main Street don’t expect a reprieve from high prices any time soon, according to a new CNBC poll.An overwhelming majority (78%) of America’s entrepreneurs say they expect inflation to continue to rise, according to the quarterly CNBC|SurveyMonkey Small Business Survey. That is effectively unchanged from last quarter when 77% said they expected inflation to continue to rise.”, CNBC, December 10, 2022
“The Next Career Move For Americans Looking For A Healthier Lifestyle: Working For Themselves – Even with a record number of traditional jobs available, the number of independent workers in the U.S. keep climbing, according to new research. There are now 64.6 million independent workers in the U.S., according to “Happier, Healthier Wealthier: The State of Independence in America,” issued by MBO Partners, a provider of back-office services to independent workers. The report found that the number of full-time independents—those working 15 hours a week or more—is 21.6 million, up from 15.3 million in 2019.”, Forbes, November 30, 2022
Brand & Franchising News
“Applebee’s owner to acquire Fuzzy’s Taco Shop for $80M – Dine Brands Global, which also operates IHOP, will get its long-desired growth concept in the 138-unit fast-casual brand. On Monday, the owner of Applebee’s and IHOP, which has been expressing a desire to acquire a third concept for years, finally pulled the trigger on one, agreeing to acquire Fuzzy’s Taco Shop from NRD Holding Co. for $80 million in cash. Dine believes this will give it a growth chain and its first limited-service concept.”, Restaurant Business, December 5, 2022
“Burger King Has Released A Winter Whopper In Japan – Earlier this year in August, (Wendy’s) Japan released an Icy Whopper with a layer of shaved ice in the burger. Thankfully, this latest edition of the Whopper won’t include any ice, which probably wouldn’t be the top meal choice on a chilly winter day. According to The Street, the Winter Whopper includes gouda cheese and a spicy hot sauce. Burger King Japan’s Twitter account posted a photo that reveals this burger will hit stores on Friday, December 9.”, Mashed.com, December 12, 2022
“Here’s how Denny’s fits into the evolving family-dining breakfast category – Denny’s CEO Kelli Valade discusses brand synergy with new acquisition Keke’s, the future of the 24-hour operations model, and how customers are evolving. Valade spoke about the evolution of family dining— including the brand’s new acquisition of Florida-based Keke’s Breakfast Café, labor challenges, and operations changes — during the last CREATE Live Digital Learning Session of 2022 with NRN Senior Editor Ron Ruggless.”, Nation’s Restaurant News, December 8, 2022
“Listed Australian pizza chain franchisor Domino’s Pizza Enterprises (DPE) is expanding its footprint in Asia and Europe with a completed acquisition and the launch of an equity capital raising, according to a media report. On November 30, Domino’s advised stakeholders that their acquisition of Domino’s Malaysia and Domino’s Singapore was complete. The company’s acquisition of Domino’s Cambodia is expected to be completed in Q1 of 2023, subject to regulatory approvals. Meanwhile, DPE is also seeking to raise a total of $165 million to buy out its business partner in the German market.”, Compliments of Jason Gerhrke, the Franchise Advisory Centre, Brisbane.
“Lynx Franchising and Outdoor Living Brands Rebrand as Empower Brands – The launch of Empower Brands comes following Lynx’s September 2021 acquisition of Outdoor Living Brands. After months of integrating the two organizations, Lynx Franchising and Outdoor Living Brands decided the best way to continue moving these brands forward was to combine forces under one, unified name. Together as Empower Brands, the team can provide more experience and an even stronger commitment to providing franchisees with a winning playbook and the right resources to pursue their long-term goals.”, Franchising.com, December 9, 2022
“9Round Finalizes Deal to Bring Facilities to South India – 9Round Franchising, LLC, has finalized a master franchise agreement to expand into South India. South India’s master franchisees Arun Bharathi, Balaji Jeyakumar and Sharmila Jayakumar will open the country’s first 9Round location in Chennai or Bangalore in early 2023. Balaji is an accomplished professional with more than nine years of experience in operations and supply chain management. Sharmila has experience in supply chain management, product development, and market research, as well as strategic planning.”, Franchising.com, December 9, 2022
“McDonald’s Careful Moves Pay Off – The fast-food leader introduces new store concepts, new menu items, and more. McDonald’s is possibly the most old-fashioned of all the big fast-food chains, rarely making major changes to its classic menu. That’s not to say Mickey D’s doesn’t embrace modernity in its own way, though. Its new test restaurant concept in Fort Worth, Texas, is smaller than its usual locations and introduces the Order Ahead lane, specifically designed for people who placed their orders using the McDonald’s app.”, The Street, December 12, 2022
“Wendy’s Is Now the Most Expensive Fast Food Restaurant in the U.S., New Data Says – Wendy’s earns the notorious title of the most expensive fast food chain this year, beating out last year’s “winner” Burger King. Wendy’s prices increased by an eyebrow-raising 35% this year, representing the largest increase in 2022 among analyzed chains (average price: $6.63).”, Eat This, Not That!, December 9, 2022
“Xponential Fitness Signs Master Franchise Agreement in Japan – The agreement was signed with Wellness X Asia, Xponential’s existing Master Franchise Partner in Japan for Club Pilates and CycleBar. Wellness X Asia (formerly Club Pilates Japan Co. Ltd.) will now be responsible for the country-wide development of Rumble and AKT, in addition to Club Pilates and CycleBar.”, Franchising.com, December 9, 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 25+ countries provides us with updates about what is happening in their specific countries.
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During an extraordinary four-decades in international business, William (Bill) Edwards has played a leadership role in the global growth of more than 40 brands. He is widely recognized as an International Problem Solver, Strategist, Advisor and a specialist on global cultures. His career covers international operations, executive and entrepreneurial experience in the energy, technology, licensing, management consulting and retail sectors. He has been a technical specialist, manager, brand senior executive and country president.
Over the years, Bill has made or seen almost every mistake that companies can make when going global. He understands the global company world like few others. As a Global Advisor, he now shares his experiences and wisdom with senior executives to help them successfully navigate the complex international company growth landscape. For hard learned advice on taking your business global successfully, contact Bill Edwards at bedwards@edwardsglobal.com or +1 949 224 3896.
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