Biweekly Global Business Newsletter Issue 114, Tuesday, August 6, 2024

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Commentary about the 114th Issue: Vistage CEO Confidence Index took a dip in Q2 2024 while U.S. consumer confidence was up in June. Three of every four employers globally reported difficulty finding the talent they need. The U.S. and Canada lead G7 country wage growth from 2020-2022. Singapore is the safest city in Asia. A Big Mac® costs US$5.69 in the U.S., US$8.17 in the Czech Republic and US$2.39 in Taiwan. U.S. importers are rushing goods in early ahead of shipping disruptions. 7 ways AI is changing business travel. A look at real GDP growth in European countries in 2023. Jamie Diamond says businesspeople need to travel more. The United Kingdom’s consumer inflation falls to 2%. And is Paris ready for Wingstop® restaurants?

Reports in this edition from Australia, Canada, China, Europe, Mexico, Turkey, the United Kingdom and the USA.


Edited and curated by: William (Bill) Edwards, CEO & Global Advisor, Edwards Global Services, Inc. (EGS), Irvine, California, USAContact Bill with any questions, comments and we welcome contributions.

Bedwards@edwardsglobal.com, +1 949 375 1896

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The mission of this newsletter is to use trusted global and regional information sources plus our network of 20+ in-country Associates to update our global readers on key global and local trends that can impact the success of their businesses at home and abroad. We subscribe to about 40 international information sources to keep our readers up to date on the world’s business.  Some of the information sources that we provide links to require a paid subscription for our readers to access.  

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First, A Few Words of Wisdom From Others For These Times

“The battleline between good and evil runs through the heart of every man.”, Alexander Solzhenitsyn

“For the only way in which a durable peace can be created is by worldwide restoration of economic activity and international trade.”, James Forrestal

“You must be the change you wish to see in the world.”, Mahatma Gandhi

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Highlights in issue #114:

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Interesting Data, Articles and Studies

Vistage Q2 2024 CEO Confidence Index Highlights – The Vistage Confidence Index provides a quarterly report on the outlook CEOs of SMB companies have about the economy, hiring, and profitability. CEO confidence takes a dip”, Vistage, August 2024

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2024 Global Talent Shortage – Three of every four employers globally reported difficulty finding the talent they need, with the biggest impacts being felt in Japan. Employers in the Health Care and Life Sciences industry reported the most difficulty. IT & Data skills are the most challenging to find, regardless of industry and geography. Today, 75% of employers report difficultly in filling roles.”, The Manpower Group, July 31, 2024

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Massive appropriation of labor from the Global South enables high consumption in rich countries – The high levels of consumption enjoyed by wealthy countries in the Global North are only possible because of mass appropriation of labor from the population of the Global South….. the Global North imported 906 billion hours of embodied labor from the South while exporting only 80 billion hours in return. In other words, for every hour of labor the Global South imports from the Global North, they must export 11 hours to “pay” for it. The wage value of this net-appropriated labor was equivalent to €16.9 trillion in 2021, in Northern prices. In other words, this is how much the appropriated labor would be worth if it was paid at prevailing Northern wages, with equal wages for equal work.”, Phys.org, July 29, 2024

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WTO (World Trade Organization) Members Signal Progress on Draft E-Commerce Deal – Pact is designed to ban tariffs on fast-growing digital tradeList of participants doesn’t include India and South Africa. About half of the World Trade Organization’s members reached a preliminary deal on e-commerce to permanently ban tariffs on digital transactions that are zipping across borders at twice the growth rate of physical merchandise. Among the 91 participants were the US, China, Japan, the UK and the major economies of the European Union — although Washington also signaled a reluctance to fully endorse it.”, Bloomberg, July 27, 2024

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

Wage Growth In G7 Countries – 2020-2022 – Average wage growth is a key sign of how well a country’s economy is doing.  When wages rise, it typically signals that businesses are thriving and can afford to pay their employees more, which in turn boosts consumer spending and stimulates further economic growth.  On the other hand, stagnant or declining wages can indicate economic challenges, such as high unemployment, low productivity, or weak business performance.  This graph shows the average annual real wage growth for full-time workers of G7 countries from 2000 to 2022. The data comes from the OECD and is updated as of March 2024.  Data is in U.S. dollars and adjusted for purchasing power parity (PPP), which equalizes the purchasing power of different currencies. Wages are adjusted for inflation to reflect 2021 prices.”, Visual Capitalist and OECD, July 15, 2024

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The Price of a Big Mac Across the World – The Big Mac Index, created by The Economist in 1986, started out as a simple tool to make currency theory more digestible. Now, it’s a widely-known measure in popular economics to assess and compare currency valuations. In short, the Big Mac index compares the purchasing power parity (PPP) of currencies using the price of a Big Mac in the U.S. as the benchmark. It shows how much a Big Mac costs in various countries compared to the U.S., but it also works as a way to assess exchange rates. In this graphic, we visualize the price of a McDonald’s Big Mac in U.S. dollars between 13 different countries around the world, the eurozone, and the United States, using the latest January 2024 data from The Economist’s Big Mac Index dataset.”, The Economist, July 22, 2024

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Coal’s Asian Comeback – Southeast Asia’s renewable energy potential is some of the greatest in the world. In bold pursuit of renewable energy, Vietnam is undertaking an unorthodox but promising green hydrogen strategy, Thailand’s Prime Minister has promised to explore the cutting edge of nuclear power, and the Philippines has received broad praise for its commitment to renewables and regional trend-setting. Indonesia and the Philippines, for example, are increasing their dependence on coal. The share of power generated by coal in both the Philippines and Indonesia both recently surpassed China, becoming some of the world’s most coal-dependent countries. According to the London-based think tank Ember, coal generation in the Philippines grew much faster than the rise in electricity demand in 2023 – coal generation grew by about 9.7%, while electricity demand grew by 4.6%. Both Indonesia and the Philippines reached over 61% coal generation.”, Forbes, July 28, 2024

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U.S. Importers Are Rushing Goods in Early Ahead of Shipping Disruptions – The strategy comes as freight rates are rising and new tariffs are set to hit some goods from China. Import containers have been landing at American seaports in far bigger numbers than usual since the late spring, marking an early start to the annual peak shipping season leading into the fall. It also marks a big bet for importers who risk being stuck with excess inventories if consumers don’t pick up their spending.  Paul Bingham, director of transportation consulting at S&P Global Market Intelligence, said U.S. retailers and manufacturers don’t want to risk lost sales, even though they are paying a steep price as shipping disruptions drive up container rates to levels not seen since the Covid pandemic. ‘A natural reaction of supply-chain managers in the face of potential further disruption, even though the rates are higher, has been to advance the shipping times,’ Bingham said. Supply-chain executives see warning signs flashing around the globe, from drought-triggered limitations at the Panama Canal to the threat of a strike by dockworkers at U.S. East Coast and Gulf Coast ports this fall.”,  The Wall Street Journal, July 23, 2024

Editor’s Note: A TEU (twenty-foot equivalent unit) is a measure of volume in units of twenty-foot long shipping containers.

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New Labor Unrest Hits U.S. Ports – The peak shipping season is getting underway with another threat of labor disruption at American ports. The union representing about 45,000 workers at ports from Maine to Texas and the seaport employers are in a standoff with no negotiations on the calendar and the current longshore contract due to expire in a little over two months. German port workers are considering a “final offer” from employers after staging several walkouts in recent weeks. (Maritime Executive). A vote at a Coventory warehouse to force Amazon to recognize a union for the first time in the U.K. fell just short of a majority. (Financial Times).”, The Wall Street Journal, July 2024

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The 10 Busiest Ports in the World, by Cargo Traffic – In 2024, nine of the world’s 10 busiest ports are located in Asia, underscoring the eastward shift in global trade flows. Due to supply chain shifts and deeper integration, intraregional trade within Asia has grown significantly. In the 1990s, over 70% of Asian exports by value went beyond the region, with containers being shipped back mostly empty. By comparison, roughly 60% of exports in Asia are traded within the region today. As we can see, seven out of the 10 busiest ports in the world are located in China, illustrating its central role in global manufacturing and trade. Since 2009, the country has been the largest exporter of goods in the world.”, Visual Capitalist, July 26, 2024

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In the U.S., the AI Revolution Could Create Localized Power Crunches – The growth of U.S. data centers will run into power availability issues and permitting bottlenecks, spurring more technology companies to secure access to electricity directly from renewable power generators, though any systemic risks to electrical grids will likely be localized. The ongoing surge of demand from data centers, as well as from the electrification of many sectors amid the energy transition and intermittent renewable energy sources, will aggravate the challenges for interconnection grids. Facing power availability and permitting bottlenecks risks, technology companies setting up large data centers will be increasingly creative in trying to buy on a long-term basis reliable renewable energy power, even if at a relatively high cost.”, Worldview Rane, July 26, 2024

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Global & Regional Travel & Living

JPMorgan CEO Jamie Dimon says travel is essential for business leaders – Business travel, long a vital part of a CEO’s job, is rebounding to pre-pandemic norms despite the increased use of videoconferencing tools. And for good reason, says JPMorgan CEO Jamie Dimon, who admits he’s constantly on the road because executives must prioritize face-to-face interactions with their employees, customers, and clients. ‘Leaders have to get out. They have to get out all the time. They have to be curious; ask a million questions,’ he recently said on LinkedIn’s This is Working series. Corporate travel, according to Dimon, also allows leaders to identify and learn from competitors about their company’s market position, as well as client needs and criticisms. he CEO said he’s often amazed by how many leaders lack a realistic assessment of what’s going on beyond their limited scope in both the public and private sectors. This leads to the creation of poor policies.”, Fortune, July 29, 2024

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7 Ways AI Is Changing Business Travel – Someday a computer-generated avatar may explain why you can’t fly business class to Dubai. In the meantime, travel management and travel tech companies are testing how to apply Gen AI to various parts of business travel. Travelport, a tech company that provides reservation software for travel agents, this month introduced a feature called the Content Curation Layer (CCL). This feature uses AI to improve travel searches by quickly sorting through billions of options to find the best matches for customers. Business travelers dread filing expense reports. When various tools sync, though, the process can be simpler. Tech integrations can enable suppliers, such as airlines and hotels, to send electronic receipts straight to the expense reports required by companies. Travelers can ideally just click to submit items via travel management software. Skift, July 26, 2024

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This Asian City Was Crowned World’s Safest Destination For Travelers – According to a new Forbes Advisor survey, Singapore is the world’s safest tourist destination, a remarkable feat for the city-state. The comprehensive analysis evaluated 60 international destinations and placed Singapore at the top of the list, cementing its reputation as a secure location for global travelers. The research examined various safety parameters, including crime rates, healthcare quality, infrastructure, and risks related to natural disasters and digital security. It assigned safety rankings ranging from 0 to 100, with the safest cities earning the lowest scores. Singapore achieved a perfect score of 0 points in the study, indicating the lowest possible risk across all categories assessed.”, Travel & Noire, August 2, 2024

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Book Review

Own the AI Revolution” by Neil Sahota and Michael Ashley is a guide for leveraging artificial intelligence to drive business growth and innovation. The book offers practical insights into integrating AI into various industries, emphasizing its potential to transform operations, enhance customer experiences, and create competitive advantages. 

It includes real-world case studies, strategies for AI adoption, and discussions on ethical considerations and future trends. The authors aim to demystify AI, making it accessible for business leaders and entrepreneurs to harness its power effectively and responsibly in their organizations.

Editor’s Note: Neil Sahota was a keynote speaker at the May 23rd, 2024 Orange County World Trade Week conference in Irvine, California. Neil simpllfies AI for the audie

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Country & Regional Updates

Australia

Small business confidence dips amid economic strain – Small businesses in Australia are feeling the pinch, with financial confidence significantly lagging behind their big business counterparts, according to CreditorWatch’s latest Business Sentiment Survey. The survey highlights the unique challenges faced by small businesses in the current economic climate. CreditorWatch’s survey results show that 82 per cent of decision-makers in large businesses feel confident about their financial health, rating it as ‘good’ or ‘very good’. This drops slightly to 76 per cent among medium-sized businesses but plummets to just 45 per cent among small businesses. This gap in financial sentiment highlights just how vulnerable small businesses are to the ups and downs of the economy.”, Australian Business Builders, July 30, 2024

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Canada

American invasion: Why so many U.S. fast food chains are charging into Canada – Here are the chains making a run for the northern border and why they believe Canadians have a growing appetite for fast food. In relatively short order, Canada has become a hotbed for fast foodexpansion from the United States. Shake Shack opened its first Canadian location in Toronto last week, with plans for 34 more restaurants by 2035. Sandwich shops Jimmy John’s and Jersey Mike’s are also among the American chains with sights set on the Canadian market. The Canadian restaurant market is quite different than what Shake Shack is used to in the U.S., said Robert Carter, a food industry analyst with StratonHunter Group, in an interview held before Shake Shack revealed its first Toronto location. ‘They’re coming from a market that’s $800 billion in size to a market that’s $90 to $100 billion in size here in Canada,’ he said. ‘Too many times we’ll have a U.S. brand that’ll come into the market and think just because it’s a smaller market or they’re just close to the U.S., it’s going to be the same strategy or marketing plan, when in fact there’s nuances they’ll have to address.’”, The Financial Post, April 30, 2024

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China

China’s non-financial debt growth slows with firms and households unwilling to leverage up – ‘China’s macro leverage ratio is now higher than other major economies, which is due to years of persistently weak price increase,’ the report published by the Beijing-based National Institute for Finance and Development said on Monday. ‘We need to crank up countercyclical adjustment to bring about inflation to counter the rising leverage trend, boost business confidence and tackle risks’. Growth of debt within China’s non-financial sectors fell to the lowest level in more than two decades in the second quarter as corporations and households remained reluctant to borrow, according to a Beijing-based think tank.”, South China Morning Post, July 23, 2024

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China looks for new ways to boost spending on services, from senior care to tourism – China is pinning more hopes on the services sector to lift demand and breathe new life into the economy, with a raft of new measures to boost spending in areas ranging from tourism to care for the elderly. In a 20-point directive released on the weekend, the State Council, the country’s cabinet, said it would increase support for nursing care, consider extending visa-free policies to more countries, and encourage “low-altitude tourism” to spur spending on services, a sector that is growing faster than goods. In the first half of 2024, 14.64 million overseas visitors entered the country, roughly 2½ times the number for the same period last year, as authorities reinstated the 144-hour free transit visa to cover 54 countries and 37 entry points, according to the most recent official data. In addition, services related to basic home-based needs such as catering, elderly care, childcare and housekeeping should also be expanded, it said.”, South China Morning Post, August 4, 2024

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Europe

Real GDP Growth Rate in European Countries – 2023 – The economic landscape in Europe during 2023 presented a fascinating mix of rapid growth and unexpected downturns, reflecting the continent’s complex and varied economies. In a surprising turn, Montenegro emerged as the fastest-growing economy in Europe in 2023. This small Balkan country’s gross domestic product (GDP) surged by 4.5%, outpacing other nations in the region. Montenegro’s growth was driven by a booming tourism sector, investments in infrastructure, and a strong rebound from the pandemic’s economic impacts. Turkey and Malta also posted impressive growth rates, with Turkey growing at 4% and Malta at 3.8%. Turkey’s economy benefited from robust export performance and a resilient domestic market, while Malta saw gains from its financial services sector and a recovering tourism industry. Estonia experienced the largest negative growth, with its economy shrinking by 2.3%. Germany, Europe’s largest economy, also faced challenges, experiencing slightly negative growth at -0.5%.”, Statista and World Bank,  August 3, 2024

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Mexico

Assessing Mexico’s Post-Election Economic Outlook – Mexican President-elect Claudia Sheinbaum’s pledge to pursue a constitutional reform that would overhaul the country’s judicial and institutional systems could diminish Mexico’s attractiveness as a destination for foreign investment at a time when the country stands to benefit from global supply chain restructuring. In recent weeks, president-elect Sheinbaun has promised to pass a wide-ranging constitutional reform that would affect labor rights, environmental issues, and independent government regulatory bodies, including the National Electoral Institute, among other agencies.  Some of these proposals have heightened domestic and foreign investor concerns about Mexico’s institutional stability and predictability.”,  Worldview Stratfor, August 1, 2024

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Turkey

Corporate Turkey’s patience in economic reboot wanes – While a shift to a more rational strategy has support, the impact of moves to tame inflation are biting. Corporate Turkey is finally feeling the pinch of President Recep Tayyip Erdoğan’s radical departure from years of unconventional economic policies. Not everyone is happy with the new normal. The central bank, which is now run by former US Federal Reserve economist Fatih Karahan, has lifted its main interest rate from 8.5 per cent last June to 50 per cent in March. The mechanism for the transmission of monetary policy to the economy that was severed by the previous unorthodox measures appears now to be more functional, meaning once-easy financial conditions are tightening.”, The Financial Times, July 30, 2024

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United Kingdom

Economist Business Section – Britain’s headline annual rate of inflation stayed at 2% in June, slightly above analysts’ forecasts. Services inflation remained sticky at 5.7%. The figures caused some traders to reduce their bets that the Bank of England will cut interest rates in August.”, The Economist, July 18, 2024

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Growth of UK economy upgraded but falls short of Labour’s target – Bank of England forecasts that GDP will expand by 1.25 per cent this year, while sterling and markets fell in response to the interest rate cut. Downward pressure on the pound was fuelled by the Bank of England’s monetary policy committee voting 5-4 in favour of reducing the UK base rate by 0.25 percentage points to 5 per cent from 5.25 per cent.

Andrew Bailey, the governor of the Bank, hinted that interest rates are unlikely to fall rapidly over the coming months. However, analysts doubted that assumption, intensifying the ­sterling sell-off.”, The Times of London, July 22, 2024

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United States

(US) Consumer Confidence Jumps in June – Consumer confidence increased in June with households feeling more confident in their ability to make ends meet and more confident in the job market, according to the Numerator Consumer Sentiment Tracker. The report also showed an increased comfort with nonessential spending. The June Consumer Confidence Score was 57.1 (+0.3 vs. May), which is an average of how consumers feel about the job market, their household finances, and their spending comfort levels. 40% of consumers think it’s very or somewhat easy to find employment in the current job market. Meanwhile, 27% think it’s somewhat or very difficult. 49% of consumers say their household’s financial situation is currently good or very good. 41% of consumers are very or somewhat comfortable spending money on discretionary purchases right now. Consumers with spare cash say they’re putting it in savings (36.2%) and paying down debts (33.3%). 13.2% of consumers say they do not have any spare cash (-2.9 points vs. May).”, Franchising.com, August 2024

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Brand & Franchising News

Carl’s Jr (Australia) franchisees set to meet with US parent – The parent of US burger chain Carl’s Jr is holding talks about directly licensing its brand to the 25 burger shops still trading in Australia, after the local master licensee and 24 restaurants entered voluntary administration. CJ’s QSR Group, which is the corporate entity that rules Carl’s Jr’s brand in Australia, appointed KPMG as voluntary administrators on Monday. A creditor meeting will be held next week and administrators said they will conduct an immediate sale process of the stores caught up in the administration. The move surprised other franchisees, said BKG Group’s Lindsay Brennan. The BKG Group…….opened Carl Jr’s first Australian store in Bateau Bay in 2016. It still owns two Carl Jr’s stores, Mr Brennan said.”, Australian Financial Review, July 30, 2024

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““Chicken chain Wingstop fires up sale of British operation – The trio of entrepreneurs behind the UK’s fastest-growing restaurant chain have hired Goldman Sachs to explore a sale after six years of rapid growth, Sky News learns. The sale is being launched as Wingstop prepares to launch its 50th outlet in the UK. It is aiming to have 57 sites open by the end of the year, with substantial room for further growth even in a market saturated by competitors. Sources said the company believed it could ultimately reach between 400 and 500 sites in Britain. Wingstop has also become one of the industry’s biggest employers in the UK, with a workforce of about 2,200 people.”, Sky News, August 3, 2024

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““Is Paris ready for Wingstop? – Piggybacking on the Olympics, the fast-casual chicken chain is opening a pop-up restaurant in the French capital, a teaser to what could become 200 restaurants in the country. Dallas-based chicken-wing slinger Wingstop will debut its Maison des Saveurs (that’s “House of Flavor” for the uncultured among us) in the heart of Paris, a pop-up restaurant tied to the opening of the Summer Olympics that also serves as an amuse bouche of sorts for the chain’s planned official entry into Paris later this year.  The fast casual opened its first (and, so far, only) French location in 2019 in Toulon, more than 500 miles south of Paris. At that time, French franchisee Brescia Investissement SAS said it planned to open 75 Wingstops in France by 2029.”, Restaurant Business, July 24, 2024

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““We’re literally going to need a bigger burrito: can Guzman y Gomez crack the crowded US market? – The chain’s much-hyped expansion plan includes selling meatier burritos than in Australia for a lower price, but marketing Mexican-themed food in the Americas is a tough ask. When the Mexican-themed food chain Guzman y Gomez listed on the Australian stock market in June, its share price rocketed by more than one-third in a single day of trading, creating a $3bn company. One factor that won over investors was a pledge to aggressively expand in Australia and push deep into the lucrative US market.

GyG plans to increase the number of its Australian stories from less than 200 to more than 1,000, a figure chosen to rival McDonald’s, and build on its international network, which now includes four outlets in the Chicago area.”,  The Guardian, August 2, 2024

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” “Competition differentiation in the (Mainland China) coffee market different approaches of Starbucks Luckin Coffee and Coodi – Luckin Coffee, Starbucks, and Kudi Coffee are the top three companies in terms of the number of coffee shops in China. Under the fierce market competition, each has chosen a different business path. Luckin Coffee’s revenue still exceeded that of Starbucks China, and Starbucks China’s operating profit margin was higher. While Starbucks cut its prices, Luckin Coffee also fell into the dilemma of price war. Luckin Coffee’s performance in the first quarter of this year turned from profit to loss, with a net loss of 71.42 million yuan, compared with a net profit of 564 million yuan in the same period last year. The drop in product prices did not bring an increase in transaction volume for Starbucks China. The financial report shows that during the reporting period, Starbucks China’s same-store sales fell by 14%. Kudi Coffee is positioned as a store opening platform, and its core lies in the conversion of store business. Kudi Coffee does not charge franchise fees, and the collection of service fees also adopts a gradient model.”, Economic Observor, August 2, 2024. English translation and article provided by Paul Jones, Jones & Company, Toronto

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““Taco Bell set to roll out automated drive-thru ordering at many restaurants – Taco Bell aims to complete its expansion by the end of the year. Taco Bell is set to add AI drive-thrus at many of its restaurants. it already has the system at eateries in 13 states. (Copyright 2019 The Associated Press. All rights reserved) Taco Bell is looking to roll out artificial technology at hundreds of drive-thrus across the country, parent company Yum! Brands announced Wednesday. Yum! Brands, which currently operates voice AI technology in over 100 Taco Bell drive-thrus across 13 states, aims to complete its expansion by the end of the year. The company said the rollout ‘is designed to enhance back-of-house operations for team members and elevate the order experience for consumers.’ The potential benefits, the company says, include easier workdays for employees, improved order accuracy, more consistent, friendly experience, reduced wait times and higher profit growth.”, The Independent, July 31, 2024

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7-Eleven Philippines targets 450 new stores in two regions – 7-Eleven operator PSC (Philippine Seven Corp) is planning to open 450 new stores in Visayas and Mindanao as part of an aggressive expansion in the country. Since its establishment in the Philippines in 1984, the convenience store network has expanded to 3829 branches nationwide. 7-Eleven expects to reach its 4000th store milestone by the end of Q4 this year.”, Inside Retail (Australia), July 23, 2024

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Our biweekly global business update newsletter focuses on what is happening around the worldthat impacts new trends, health, consumer spending, business investment, the franchise sector, 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 business environment. And our GlobalTeam™ on the ground covering 25+ countries provide us with updates about what is actually happening in their specific countries.   We do not get involved in or report on politics!

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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 since 2001 taking 40+ franchisors global.

For a complimentary 30-minute consultation on how to take your business into new countries and make money doing it. For a complimentary call with Bill Edwards click on the QR code or contact Bill at bedwards@edwardsglobal.com and +1 949 375 1896

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