EGS Biweekly Global Business Newsletter Issue 87, Tuesday, July 25, 2023
Edited and curated by: William (Bill) Edwards, CFE, CEO of Edwards Global Services, Inc. (EGS)
Introduction: In this issue, Japan’s inflation rate is higher than in the USA, what is the difference between types of AI, the pandemic’s impact on commercial real estate, China’s growth turns down, globalization remains high, New Zealand ranks #1 in the world in work-life balance, McDonalds® sees global growth and Americans will need a visa to go to Europe soon.
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
“Communication is the key for any global business.”, Anita Roddick
“It is not the strongest or the most intelligent who will survive, but those who can best manage change.”. Leon C. Megginson
“Mistakes are the growing pains of wisdom.”, William George Jordan
Highlights in issue #87:
- The State of Globalization in 2023
- New Zealand ranked best in world for work/life balance
- Will China ever get rich? A new era of much slower growth dawns
- The Difference Between Generative AI And Traditional AI: An Easy Explanation For Anyone
- Meet a Company Pioneering Work-Life Balance
- Brand Global News Section: Anytime Fitness®, Applebee’s®, Chipotle®, Firehouse Subs®, IHOP®, McDonalds® and Sizzler®
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Interesting Data and Studies
“The Difference Between Generative AI And Traditional AI: An Easy Explanation For Anyone – Artificial Intelligence (AI) has been a buzzword across sectors for the last decade, leading to significant advancements in technology and operational efficiencies. However, as we delve deeper into the AI landscape, we must acknowledge and understand its distinct forms. Among the emerging trends, generative AI, a subset of AI, has shown immense potential in reshaping industries. But how does it differ from traditional AI? Let’s unpack this question in the spirit of Bernard Marr’s distinctive, reader-friendly style.”, Forbes, July 24,2023
“The State of Globalization in 2023 – Global (Trade) flow have mostly returned to above pre-pandemic levels. The latest DHL Global Connectedness Index shows how the international flows of trade, capital and information were already above pre-pandemic levels by 2021. In 2022, the recovery of international people flows accelerated.”, Harvard Business Review, July 11, 2023
“McKinsey Releases Report on the Pandemic’s Lasting Impact on Real Estate – Hybrid work is here to stay. As a result, office attendance has stabilized at 30% below prepandemic norms. The ripple effects of hybrid work are substantial. Untethered from their offices, residents have left urban cores and shifted their shopping elsewhere. Demand for office and retail space in superstar cities will remain below prepandemic levels.”, Franchising.com, July 23, 2023
“Britons spend less time in the office than the rest of Europe – Only Canada scores higher for remote hours, study of 34 countries finds. The research, which surveyed 42,400 full-time employees in 34 countries, found that those in France spent less than half as many hours at home as Britons, at only 0.6 days a week. Those in Italy are at home only 0.7 days a week while in Spain the number is 0.9. Britons also show up to the office significantly less than workers in east Asia. However, Britain’s working practices are more similar to other English-speaking nations. In America, workers spend 1.4 days a week at home, while in Australia the number is 1.3. In Canada, the home-working capital of the world, office staff spend 1.7 days a week working remotely.”, The Sunday Times of London, July 18, 2023
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Global Supply Chain, Energy, Commodities, Inflation & Trade Issues
“UK signs Comprehensive and Progressive Agreement for Trans-Pacific Partnership – The new agreement will simplify import and export process between the UK and Chile, improving the business environment between the two countries as members of the bloc. Being part of CPTPP will mean that more than 99 per cent of current UK goods exports to CPTPP countries will be eligible for zero tariffs.”, GOV.UK, July 17, 2023
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Global & Regional Travel Updates
“Americans Will Need a ‘Visa’ to Visit Europe in 2024—Here’s What to Know – The new program requires an online application and a minor fee, and is required for all travelers regardless of their age. The new regulations are called the European Travel Information and Authorization System (ETIAS). When the system launches in early 2024, it will require all visitors who currently travel to Europe visa-free, such as citizens from the US, Canada, Australia, and New Zealand, to apply for travel authorization and receive approval prior to their departure.”, Conde Nast Traveler, July 19, 2023
“Singapore Passport Is World’s Most Powerful, Replacing Japan – Singapore has replaced Japan for having the world’s most powerful passport, allowing visa-free entry to 192 global destinations, according to the latest Henley Passport Index. The US, which once topped the ranking nearly a decade ago, slid two places to eighth place. The UK, after a Brexit-induced slump, jumped two places to fourth, a position it last held in 2017.”, Bloomberg, July 18, 2023
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Country & Regional Updates
Canada
“Mid-Year Canadian Dollar Outlook – 2023 – The loonie is lifting off. – Fiscal support, stabilising financial conditions, and a historic surge in immigration are helping the Canadian economy – and the loonie – defy bearish expectations. Continued labour market tightness, rebounding housing markets, and high levels of consumer consumption have combined to deliver remarkably-robust growth rates. Yield differentials might narrow – or even flip. But household consumption looks fragile.”, MAPLE Business Council, July 21, 2023
“Waiting for the factory building boom in Canada – The amount spent on the construction of manufacturing facilities in the United States in May jumped 73 per cent to a record US$15.6-billion from the year before, according to the U.S. Census Bureau. Canada’s federal budget this spring aimed to be Ottawa’s response to Washington’s economic activism, with $12-billion in tax credits and incentives for cleantech manufacturing, among other measures. But new data on factory construction investment from Statistics Canada this week shows just how far manufacturers in this country have to go to catch up.”, The Globe & Mail, July 20, 2023
China
“Chinese Consumers Pinch Pennies on Staples as Pandemic Habits Linger – Chinese consumers are being frugal when buying everyday items from toothbrushes to shampoo, a worrisome trend for a country that is trying to shake off the effects of the coronavirus pandemic. A broader retail sales recovery in China this year has masked some of the penny-pinching, which economists say points to underlying weakness in consumer confidence.”, The Wall Street Journal, July 22, 2023
“Will China ever get rich? A new era of much slower growth dawns – China is entering an era of much slower economic growth, raising a daunting prospect: it may never get rich. ‘It is unlikely that the Chinese economy will surpass that of the United States within the next decade or two,’ said Desmond Lachman, a senior fellow at the American Enterprise Institute. And China’s workforce and consumer base are shrinking while the cohort of retirees is expanding.”, Reuters, July 17, 2023
European Union
“High hopes despite high prices: An update on European consumer sentiment – Consumer confidence has grown dramatically across the continent—but geopolitical concerns and price increases continue to affect how consumers intend to spend. A sunnier outlook emerges in Europe. German consumers report the highest increase in net confidence, at 13 percentage points (up from –34 in September 2022), as well as the highest level of optimism—31 percent of respondents say they expect their country’s economy to rebound within two to three months and grow just as strong or stronger than it was before the conflict in Ukraine began.”, McKinsey & Co., July 14, 2023
Latin America
“What could a new era mean for Latin America? The pandemic hit Latin America hard, inflation has raised pressure on the continent’s low-income groups, and polarizing political tensions have been escalating. In Latin America, as in the rest of the world, these are volatile and uncertain times. Increasing trade with China and the rest of the world has shifted the balance away from the United States.”, McKinsey & Co., July 20, 2023
Japan
“Meet a Company Pioneering Work-Life Balance – Japanese trading houses like Itochu Corp., Mitsui & Co., Mitsubishi Corp. and Sumitomo Corp. have underpinned our country’s postwar economic miracle. But they also embody our corporate culture, characterized by male dominance, long working hours and pressure to join drinking parties with bosses and clients after work. So when Masahiro Okafuji became chief executive officer of Itochu in 2010, he made improving productivity a top priority to compete against rivals in Japan and made drastic changes to its employees working hours, his approach was counterintuitive. he banned working in the office after 8 p.m. with rare exceptions and had security guards and human resources staff scout Itochu’s office building in Tokyo, telling people to go home. Those clinging to their desks were told to come in early the next day to get their work done — and get paid extra. A decade later, the company — whose businesses range from the FamilyMart convenience store chain to metals trading — reported a change that even surprised management. The fertility rate among full-time employees had doubled in the years since Okafuji became CEO, reaching almost two children per female in the fiscal year ended March 2022. That far exceeds Japan’s current national rate of about 1.3.”, Bloomberg, July 17, 2023
“Japan’s inflation outpaces US price rises for first time in 8 years – Asia’s most advanced economy is no longer an outlier in inflation. Japan remains the world’s only central bank with negative interest rates, and any reversal of this strategy would have massive implications for global financial markets. Annual inflation of the consumer price index and core CPI, which excludes fresh food, rose from 3.2 per cent in May to 3.3 per cent in June, according to data released on Friday.”, The Financial Times, July 20, 2023
Malaysia
“Nasdaq ranks Malaysia best place in Asia to retire ahead of Vietnam, Indonesia – Malaysia was the safest place to retire in Asia, based on its peace score and average monthly cost of living, according to US-based financial services corporation Nasdaq. Malaysia ranks first in a list of the 10 safest places to retire in Asia, according to US-based financial services corporation Nasdaq. “Malaysia takes the number one spot with a cost of living index of 22.9 and a GDP of US$481.9 trillion. With average monthly expenses at just over US$1,000, it’s an excellent place for retirees to consider,” it said. Runner-up in the list is Kuwait, with a global peace index of 1.739 and an average monthly cost of living of US$1,741.”, South China Morning Post, July 16, 2023
New Zealand
“New Zealand ranked best in world for work/life balance – The global index study by Remote, a global payroll, tax, HR and compliance supplier for distributed teams, assesses the quality of life-work balance in the world’s top 60 GDP countries, ranking each nation out of 100. The overall score is determined through factors including minimum wage, sick leave, maternity leave, healthcare availability, public happiness, average working hours, and LGBTQ+ inclusivity. The top 5 places on the list were filled by New Zealand, Spain, France, Australia and Denmark. The United States is ranked a lowly 53rd in the index owing to a lack of statutory annual leave or sick pay, and the absence of a universal healthcare system.”, Franchise New Zealand, June 29, 2023
United Kingdom
“UK banks lead global rivals in passing on interest rate benefits to savers – US and European lenders come under pressure to share more of their haul with customers. UK banks have handed more of the benefits of interest rate rises to savers than their counterparts in Europe or the US, as politicians, regulators and clients push for a greater share of the haul. Global banks are coming under pressure to pass on the benefits of higher interest rates to their customers — but lenders in less competitive markets have proved far less generous than others, according to an analysis by rating agency S&P.”, The Financial Times, July 23, 2023
“British inflation may not be as sticky as thought – Inflation figures covering the year to June showed that the rate of price growth is not proving as stubborn as it had previously appeared. The headline rate of inflation fell from 8.7% in May to 7.9% in June, a bigger drop than the fall to 8.2% that economists had been expecting.”, The Economist, July 19, 2023
United States
“Vistage CEO Confidence Index Report Q2 – Using ITR Economics rate-of-change methodology, analysis has revealed that the Vistage CEO Confidence Index is a leading indicator of the U.S. Industrial Production Index 9 months in advance. This report captures CEO economic sentiment and strategic intent for the next 12 months. Vistage July 2023
“Americans in Their Prime Are Flooding Into the Job Market – Share of people between 25 and 54 working or seeking jobs rose this year to highest level since 2002. The resurgence of midcareer workers is driven by women taking jobs. The labor-force participation rate for prime-age women was the highest on record, 77.8% in June. (US) Men, however, tend to be employed at higher rates. The overall prime-age participation rate rose in June to 83.5%, the highest since 2002.”, The Wall Street Journal, July 22, 2023
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Brand & Franchising News
“Applebee’s and IHOP head to Japan—virtually – The brands will also make their debuts in France, Belgium and the Netherlands through a partnership with Franklin Junction, which matches brands with “host kitchens” that sell their food for delivery only. Dine’s first virtual location with Franklin Junction is scheduled to open in Japan in the fourth quarter. It will add to a growing international footprint at both brands: At the end of last year, Applebee’s had 109 non-U.S. units, up from 102 the prior year, and IHOP had 104 compared to 94 in 2021.”, Restaurant Business, July 19, 2023
“Chipotle: First International Agreement Intriguing but Unlikely to Move the Financial Needle – We don’t expect wide-moat Chipotle Mexican Grill’s CMG first international development agreement to prove financially material, and we continue to view the shares as pricey. Nevertheless, we appreciate the strategic rationale behind the deal with Alshaya Group and will keep a close eye on its success; reasonable uptake in the Middle East and Africa could augur well for a deeper foray into larger and more strategically important markets in Western Europe while increasing the chances of entry into markets like China that global restaurant peers have traditionally approached through franchise agreements.”, Morningstar, July 18, 2023
“Firehouse Subs Starts Global Expansion With New Swiss Location – Restaurant Brands International (RBI), the parent company of Firehouse Subs, confirmed that the Swiss restaurant opening is the beginning of the brand’s journey to expand internationally across a number of territories, next stop being Mexico where a deal has already been signed. It appears as if the Zurich location is a company-owned one, with RBI confirming that it will be used to as a showcase for future international developments and will be harnessing technology such as self order kiosks and mobile ordering as well as offering click-and-collect and table service options.”, Forbes, July 24, 2023
“McDonald’s to Spend Over A$1 Billion on Australian Stores – McDonald’s Corp. plans to spend more than A$1 billion ($673 million) on opening and renovating stores in the company’s biggest expansion plans for Australia since the 1990s, according the Australian Business Review. The fast food giant plans to spend about A$600 million on 100 new stores in the country over the next three years, and about A$450 million refurbishing over half of its current network, the paper said, citing Australian CEO Antoni Martinez.”, Bloomberg, July 22, 2023
“McDonald’s Franchisee Surges 50% in 3 Months – (The world’s largest independent McDonald’s franchisee) Arcos Dorados stock climbed as much as 56% off its April 6 low this month amid a growing Latin American appetite for QSR food. Growth drivers include a rising adoption of digital ordering platforms, the expansion of its footprint and the introduction of new menu items. Also the largest restaurant chain in Latin America, Arcos Dorados’ growth story goes beyond technological advancement. Adding more restaurants and drive-thrus to the footprint is also a big focus. This month, the company opened its 223rd McDonald’s location in Argentina. It also launched a Japanese-themed McDonald’s in Brazil to recognize the growing Japanese community there.”, Market Beat, July 20, 2023
“Minor International acquires Sizzler for $23.38m – The group will gain control of over 64 restaurants in Thailand and 10 in Japan. As a 31-year franchisee of Sizzler, MINT has established a fruitful partnership with the seller, Collins Foods Limited (Collins Foods) and played a pivotal role in Sizzler’s success, contributing to its growth and reputation in western casual dining in Asia. MINT is one of Asia’s largest restaurant companies with over 2,500 outlets system-wide in 24 countries under The Pizza Company, The Coffee Club, Riverside, Benihana, Thai Express, Bonchon, Swensen’s, Sizzler, Dairy Queen, Burger King, Coffee Journey and GAGA brands.”, QSR Media, July 1, 2023. Compliments of Jason Gehrke, The Franchise Advisory Centre, Birsbane
“Self Esteem Brands Signs Anytime Fitness Master Franchisee in France – With France, Self Esteem Brands will now have Anytime Fitness clubs operating in 41 countries and territories around the globe. Anytime France is owned by Benoit Hanssen and Matt Burgess, who operate Anytime Fitness clubs across Italy. Under the agreement, they will open and operate Anytime Fitness clubs across Paris, Ile-de-France, Auvergne, Rhone-Alpes, Provence-Alpes, and Cote d’Azur.”, Franchising.com, July 19, 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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