EGS Biweekly Global Business Newsletter Issue 76, Tuesday, February 21, 2023

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First, A Few Words of Wisdom From Others

“There are no such things as limits to growth, because there are no limits on the human capacity for intelligence, imagination, and wonder.”, U.S. President Ronald Reagan

“The only place where success comes before work is in the dictionary.”, Vidal Sassoon

“Many of life’s failures are people who did not realize how close they were to success when they gave up.”,  Thomas Edison

Highlights in issue #76:

• Which Countries Have the Lowest Inflation?

• Air travel to surpass pre-Covid level demand this year

• The Safest Airlines In 2023

• Combustion Going Bust: Global Phase-Outs Of Gasoline Cars

• Rekindling US productivity for a new era

• Brand Global News Section:  Boost Juice®, Denny’s®, Dominos®, Taco Bell®, Texas Roadhouse®, Tim Horton’s, YUM® China

NOTE: Bolded headlines in this newsletter are live links where the article is available without a paid subscription.

Interesting Data and Studies

“Which Countries Have the Lowest Inflation? As price pressures rattle global markets, the above infographic maps inflation rates globally using data from Trading Economics, focusing in on the countries with the lowest inflation levels. Many of the lowest inflation rates around the world are located in Asia, including Macau, China, Hong Kong, and Taiwan. In this region, widespread lockdowns strained growth and consumer spending, lessening inflationary pressures. Last year, Chinese consumers saved $2.2 trillion in bank deposits during these restrictions which were lifted earlier this year.”, Visual Capitalist / Trading Economics, February 16, 2023

“The return to the office could be the real reason for the slump in productivity. Here’s the data to prove it. U.S. productivity jumped in the second quarter of 2020 as offices closed, and stayed at a heightened level through 2021. Then, when companies started mandating a return to the office in early 2022, productivity dropped sharply in Q1 and Q2 of that year. Productivity recovered slightly in Q3 and Q4 as the productivity loss associated with the return to office mandate was absorbed by companies–but it never got back to the period when remote-capable employees worked from home.”, Fortune, February 16, 2023

Global Supply Chain, Energy, Commodities, Inflation & Trade Issues

Data explorer: consumer price inflation – Annual % change in consumer price index

“Global inflation tracker – 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. The latest figures for most of the world’s largest economies still make for worrying reading, with price pressures remaining high as the war in Ukraine continues to keep energy and food prices elevated. But in some countries pressures have eased and energy and food wholesale prices have declined. Economist and investors also expect inflationary levels to stabilise in the next few years. The Financial Times, February 15, 2023

“European natural gas prices fall to 18-month low as energy crisis ebbs – Mild weather boosts confidence that Europe will avoid shortages this winter and next. The benchmark gas price on Friday fell below €50 per megawatt hour for the first time in almost 18 months, down to €48.90/MWh, as traders report growing confidence that European countries will avoid shortages this winter and next. The gas benchmark peaked at more than €300/MWh in August 2022.”, The Financial Times, February 17, 2023

“Global Gold Demand Soars in 2022 Amid Search for Safe Havens – Global gold demand surged to an 11-year high in 2022, lifted by record buying by central banks and vigorous retail investment, sparked largely by a search for safe-haven assets during a year plagued by geopolitical shocks and rampant inflation. Annual demand for bullion — excluding over-the-counter trading — soared 18% year-on-year to 4,741 tons last year, hitting its highest level since 2011, according to a World Gold Council (WGC) report published Jan. 31.”, Caixin Global, February 9, 2023

“Combustion Going Bust: Global Phase-Outs Of Gasoline Cars – When the European Union on Tuesday approved a law that will ban the sale of combustion engine cars in its member states from 2035, a whole list of countries received a deadline for how long new gasoline car will still be available from dealerships. California was the first state back in August to set a phase-out date for new combustion engine car sales, also for 2035. While there are 17 states that have tied their vehicle standards to California’s under the Federal Clean Air Act, several of them now want out as a full phase-out date has been set.”, Forbes, February 16, 2023

“The world won’t decarbonise fast enough unless renewables make real money – Governments must accept that green power is pricey. Last year global capital spending on wind and solar assets was greater than investment in new and existing oil and gas wells for the first time. Governments in America and Europe are spending billions on subsidies for clean tech over the next decade; China is offering juicy incentives, too.”, The Economist, February 16, 2023

Global & Regional Travel Updates

Air travel to surpass pre-Covid level demand this year – Air passenger demand in 2023 will rapidly recover to pre-pandemic levels on most routes by the first quarter and growth of around 3% on 2019 figures will be achieved by year end, according to the International Civil Aviation Organization (ICAO). ‘Assuring the safe, secure, and sustainable recovery of air services will be key to restoring aviation’s ability to act as a catalyst for sustainable development at the local, national and global levels, and will consequently be vital to countries’ recovery from the broader impacts of the Covid-19 pandemic, said ICAO Council President Salvatore Sciacchitano.”, Trade Arabia, February 16, 2023

“Travel Giant TUI Sees Summer Bookings Ahead of 2019 Levels – TUI AG said recent bookings for the upcoming summer are running ahead of pre-pandemic levels, the latest sign the travel sector is booming despite high inflation sapping consumer spending power. The world’s biggest tour operator said booking volumes since the start of the year exceeded 2019 levels, led by demand from travelers in the UK and Germany. Prices are also higher than pre-pandemic levels, the company said.”, Bloomberg, February 15, 2023

“The Safest Airlines In 2023 – Every airline offers something different—but aside from comfort, catering and service, safety has to be one of the most most important criteria for judging whether one is better than another. AirlineRatings.com have just announced the top 20 airlines for safety in 2023 after taking into consideration the following factors for all 385 airlines that it monitors: the number of crashes over the past five years; the number of serious incidents over the past two years, the audits from aviation’s governing bodies and lead associations, the age of the airline’s fleet, expert analysis of pilot training and Covid protocols.”, Forbes, February 8, 2023

Country & Regional Updates

Brazil

“Brazil’s economic activity rises 2.9% in 2022 – Brazil’s economic activity increased by 2.9% in 2022, according to a central bank index released on Thursday, boosted by the services sector and defying earlier predictions of mild growth, but with recent months’ performance showing loss of momentum. After starting the previous year with a forecast of a 0.3% expansion for the Brazilian economy in 2022, private economists surveyed weekly by the central bank now project 3% growth, on the back of resilient services activity and a stronger labor market.”, Reuters, February 16, 2023

Canada

“Canadian firms plan to increase salaries, hire while hedging against recession, surveys show – Canadian employers are looking to ramp up hiring as well as employee compensation through the first half of the year, while simultaneously taking measures to protect against a sudden change to the economic landscape.

With unemployment near a record low, the Canadian labour market remains historically competitive, despite widespread layoffs in the tech sector, inflation challenges, rising interest rates and fears of a looming recession. In response, businesses plan to increase spending on compensation to compete for talent in the first half of the year but are also leaving themselves some room to manoeuvre should economic circumstances change over the coming months.

A recent survey of 440 Canadian employers by HR consulting firm Normandin Beaudry found that half plan to increase their 2023 salary budgets for non-unionized workers by an average of 4.7 per cent.” The Globe and Mail, February 20, 2023

China

“Shanghai Must Lift Foreign Confidence After Covid – Foreign investment into China weak in 2022 as economy slowed China’s government is trying to attract more investment now. China should eliminate barriers to investment faced by foreign firms, as well as promote the yuan’s internationalization and strengthen financial support for smaller companies, the European Chamber of Commerce’s Shanghai chapter wrote in its biannual report published Tuesday.”, Bloomberg, February 13, 2023

“From Apple to VW, CEOs Gradually Returning to China After Its Reopening – Despite growing geopolitical tensions, companies pursue business opportunities. For many senior executives, it will be their first visit to the country since the Covid-19 pandemic began, after China—a top manufacturing hub and consumer market for many of the world’s largest companies—deepened its isolation for three years by slamming the door to international travel. As its economy struggles, Beijing is counting on such visits to attract investments from multinationals.”, The Wall Street Journal

Egypt

“Egypt Launches Privatization Drive as Economy Reels From Inflation – Government plans to sell stakes in 32 state companies, including three major banks and the country’s largest insurer. The country plans to sell the shares in the coming year either directly to investors or via the Egyptian Stock Exchange, Egyptian Prime Minister Mostafa Madbouly said Wednesday. Egypt’s economy has long been dominated by the state and increasingly by the military, creating less space for private firms to thrive.”, The Wall Street Journal, February 9, 2023

Eurozone & European Union Countries

“Europe’s Biggest Sources of Electricity by Country – Energy and electricity supply have become vital for nearly every European nation over the past year, as the region shifts away from its dependence on Russian fuel imports. This graphic maps out European countries by their top source of electricity generation using data from Electricity Maps and the IEA, along with a breakdown of the EU’s overall electricity generation by source in 2021.”, Visual Capitalist, February 10, 2023

India

“Goldman Growth Fund Boosts Bets on India as China Interest Cools – Half of Goldman’s growth capital invested in Asia since 2003. Goldman Sachs Group Inc. is ramping up investing its clients money in India and developed markets in Asia-Pacific as interest in China cools amid political and economic friction. The New York-based bank is targeting to invest a quarter of its newly-raised $5.2 billion growth fund in the region, people familiar with the matter said, who asked not to be named discussing internal information.”, Bloomberg, February 15, 2023

Indonesia

“Indonesia Holds Key Rate as Inflation, Rupiah Pressures Subside – The central bank left its seven-day reverse repurchase rate unchanged at 5.75% on Thursday, as seen by 26 of 28 economists in a Bloomberg survey. It’s the central bank’s first hold since July, before it embarked on a 225 basis-points of rate hikes to get a grip on surging food and fuel prices. The outlook for Southeast Asia’s biggest economy has changed significantly since. Inflation dipped to a five-month low in January, aided by lower transport costs and an extensive government push to distribute food supplies across markets and villages.”, Bloomberg, February 15, 2023

Israel

“Israel economy grew 6.5% in 2022, seen near 3% in 2023 – On a per capita basis, Israel’s economy – which produced some $500 billion last year – grew 4.4% versus an OECD average of 2.6%.  On a per capita basis, Israel’s economy – which produced some $500 billion last year – grew 4.4% versus an OECD average of 2.6%. Helped by a surge in immigration from former Soviet states and a decline in mortality, Israel’s population rose 2.2% last year and now stands at 9.66 million.”, Reuters, February 16, 2023

Japan

“Japan’s Economy Grows Slightly in Fourth Quarter – Revival in tourism helps GDP expand annualized 0.6% but inflation looms. The world’s third-largest economy after the U.S. and China grew 0.2% in the three months to December from the previous quarter and 0.6% on an annualized basis. For all of 2022, real growth was 1.1%, but the economy was still slightly smaller than it had been in the pre-Covid-19 years of 2017 through 2019 because of a big drop in 2020 caused by the pandemic.”, The Wall Street Journal, February 13, 2023

Mexico

“Border-Town Warehouses Are Booming as More Manufacturing Moves to Mexico – Real-estate investors add properties in cities like Tijuana, Mexico, and Laredo and El Paso, Texas. American and some foreign companies are shifting production and equipment to Mexico in pursuit of a manufacturing hub closer to the U.S. Many are relocating from Asia after a series of disruptions related to China during the pandemic, part of a burgeoning “nearshoring” trend.”, The Wall Street Journal, February 7, 2023

Thailand

“Thailand’s Fourth-Quarter GDP Growth Slowed to 1.4% – Thailand’s economic growth slowed in the final quarter of 2022 as private consumption moderated and exports of goods fell despite a continued recovery in tourism. Gross domestic product rose 1.4% from a year earlier, compared with 4.6% growth in the third quarter, the Office of the National Economic and Social Development Council said Friday. The quarterly growth figure fell short of the median forecast of 3.5% expansion in The Wall Street Journal’s poll of seven economists.”, The Wall Street Journal, February 16, 2023

United Kingdom

“Students Seeking Jobs Drive Record Net Increase in UK Workforce – Economic inactivity falls as students return to jobs market Figures ease concerns about labor shortage pushing up wages. Students are riding to the rescue of staff-starved British businesses by driving a record net increase in the number of people coming back into the workforce. The number of adults sitting on the sidelines of the jobs market — classed as economically inactive because they’re out of work and not looking for jobs fell by 113,000 in the three months to December, the Office for National Statistics said Tuesday.”, Bloomberg, February 14, 2023

“Heathrow sees busiest January since start of Covid – Heathrow Airport has recorded its busiest January since the start of the pandemic, with 5.4 million passengers travelling through it last month. The latest figures are still below the six million people that passed through in January 2020, but Heathrow boss John Holland-Kaye said it showed the airport was ‘back to its best’.”, BBC, February 13, 2023

“A view from London – Milder, and shorter it may be, but a recession is still on the cards.

For the first time in more than a year we are raising our forecast for UK growth. A recession is still on the cards, but a shorter, milder recession than had seemed likely. Better news on energy supply, inflation and the outlook for the economies of China, the US and the EU lie behind our upgrade.”, Deloitte, February 13, 2023

United States

“Rekindling US productivity for a new era – Regaining historical rates of productivity growth would add $10 trillion to US GDP—a boost needed to confront workforce shortages, debt, inflation, and the energy transition. Achieving and equalizing productivity gains will require concerted action. Priorities include unlocking the power of existing technology, investing in intangibles, improving workforce reskilling and labor mobility, and implementing place-based approaches tuned to specific geographies.”, McKinsey, February 16, 2023

“Nearly 90% Of (U.S.) Small Businesses Are Labor Hoarding, New Study Finds – An Insight Global study reported that 77% of the American workforce planned to stay in their current jobs. And in a recent Skynova survey a whopping majority of 1,010 business owners (21% large, 22% medium and 57% small businesses) say they are labor hoarding. That means they are pumping up their investments in employees to keep the status quo and avoid a labor shortage.”, Forbes, February 11, 2023

Brand & Franchising News

“Adamantem to swoop on Boost Juice, Betty’s Burgers owner – Adamantem Capital has snapped up a majority stake in the Boost Juice and Betty’s Burgers chains in a deal valuing parent company Retail Zoo at around $350 million, becoming the third private owner in a decade. CEO Nishad Alani will remain running the business, which also owns Boost Juice. The firm has bought an estimated 70 per cent stake from Bain Capital. Other owners include Boost Juice founders Janine Allis and her husband Jeff, who are believed to have sold part of their stake to Adamantem.”, Australian Financial Review, February 6, 2023. Compliments of Jason Gehrke, The Franchise Advisory Centre,  Brisbane

“Denny’s embraces new ways of broadening its customer base – The diner chain is trying a number of initiatives to keep its core business fresh and growing. Meanwhile, its parent is getting ready to expand Keke’s. With the installation of new kitchen equipment nearly done, Denny’s intends to stud its next core menu with more draws for diversifying its customer base, executives told investors Monday. They declined to specify what those products might be, but indicated the items were beyond the capabilities of the diner chain’s previous equipment array.   Management has indicated before that the back-of-house revamp, now completed by about 98% of domestic units, will be particularly useful in appealing to a broader array of customers at dinner.”, Restaurant Business, February 14, 2023

“Domino’s (Australia) opened the most stores in 2022 – Domino’s opened 34 stores in 2022 increasing its network to 754 stores, the brand with the most opened stores amongst fast food and QSR brands in Australia, a report by cloud-based data intelligence platform GapMaps revealed. The focus of Domino’s growth has been within growth areas of major cities, as well as in cities with less than 20,000 residents.”, QSR Media Australia, February 3, 2023. Compliments of Jason Gehrke, The Franchise Advisory Centre,  Brisbane

“Taco Bell opens first Cantina in Hollywood with digital tech and DJ parties – The first Taco Bell Cantina in Los Angeles will replace menu boards with five kiosks and will have event capabilities. The latest Cantina store is just one small step in Taco Bell’s larger growth journey. Last quarter, Taco Bell opened 253 gross new units, and it’s part of a wider strategy to expand Taco Bell’s footprint to be on-par with McDonald’s, Taco Bell CEO Mark King said during Yum Brands’ investor day in December.”, Nation’s Restaurant News, February 16, 2023

“A Newly Opened Texas Roadhouse Is Reportedly The Largest On Earth – Lubbock, Texas has had a Texas Roadhouse for more than two decades, but they’ve never had one like the location that just opened at 6101 Slide Road. Why? According to Everything Lubbock, it’s enormous, and at 12,000 square feet, is thought to be the biggest restaurant the steakhouse chain has ever operated. “It’s bigger than the one we had before, it’s frankly the largest Texas Roadhouse in the world right now,” noted Mike Smith, managing partner at Texas Roadhouse Lubbock, per Everything Lubbock.”, The Tasting Table, February 11, 2023

“Tim Hortons parent Restaurant Brands International replacing CEO – Toronto-based Restaurant Brands International Inc., which also owns Burger King, Popeyes Louisiana Kitchen and Firehouse Subs, announced Tuesday that chief operating officer Joshua Kobza will replace CEO Jose Cil, effective March 1. Mr. Cil will remain with the company as an adviser for one year. RBI’s board has made the change just a few months after it hired Patrick Doyle, who is known for leading a turnaround at Domino’s Pizza Inc., as its new executive chair.”, The Globe and Mail, February 14, 2023

“Yum China’s net profit in the fourth quarter of 2022 will drop by 90 percent – Executives say they will focus on boosting sales in 2023. For the full year of 2022, Yum China’s total revenue will be US$9.57 billion (approximately RMB 64.926 billion), a year-on-year decrease of 3%; net profit will be US$442 million (approximately RMB 2.999 billion), a year-on-year decrease of 55%. Same-store sales are an important indicator for chain restaurants. In the fourth quarter of 2022, Yum China’s same-store sales fell by 4% year-on-year, of which KFC and Pizza Hut fell by 3% and 8% respectively.”, Caixin, February 8, 2023. Compliments of Paul Jones, Jones & Co., Toronto

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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. 

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Over 4 decades William (Bill) Edwards has steered more than 40 brands successfully through the complexities of Going Global. Problem-solver, strategist, visionary and trusted Global Advisor, Bill Edwards sees what others don’t. Now he’s sharing this unmatched experience and wisdom with select senior executives traversing the complex international growth landscape.

For a free 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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