EGS Biweekly Global Business Newsletter Issue 86, Tuesday, July 11, 2023

Edited and curated by: William (Bill) Edwards, CFE, CEO of Edwards Global Services, Inc. (EGS)

Introduction: In this issue, United Kingdom ‘leads’ in inflation while EU markets see falling prices, Japan Air eliminates the need to bring clothes to visit, China’s consumers are not spending, McDonald’s cannot afford to use tomatoes in India, European air traffic subject to strikes in the busy summer season, the crude oil market is $2 trillion, Vietnam becomes an alternate to China.

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

“Organization is what you do before you do something, so that when you do it, it’s not all mixed up.”, A.A. Milne, the author of the “Winnie-the-Pooh” series

“It always seems impossible until it’s done.”, Nelson Mandela

“Those who say it cannot be done should not interrupt those doing it.”, Chinese proverb

Highlights in issue #86:

  • (Europe) Air traffic control strike will hit up to 1 in 3 summer flights
  • Brand Global News Section: Buffalo Wild Wings®, Carrefour, Five Guys®, KFC®, Subway®, McDonalds® and Taco Bell®


Interesting Data and Studies

Profit expectations remain positive, and energy and materials respondents report an upsurge in optimism – After three consecutive quarters of rising expectations, the survey suggests that views on profits have steadied. A clear majority (60 percent) of private-sector respondents still believe their companies’ profits will grow, compared with 63 percent in March. By industry, respondents in energy and materials report the biggest jump since last quarter: 71 percent believe profits will increase in the months ahead, up from 45 percent in March. They are also tied with their peers in consumer and retail as the most optimistic about their companies’ potential profits.”, McKinsey & Co., July 7, 2023

U.S. Is Top Investment Destination Despite Falling Inflows – Worldwide foreign direct investment fell less sharply than feared last year but there are few signs of a rebound this year. Globally, new overseas investments by businesses fell 12% from 2021 to $1.3 trillion and are unlikely to rebound strongly this year given that executives are “uncertain and risk averse,” the U.N. said. This made last year the worst for foreign investment since 2009 with the exception of 2020, when the Covid-19 pandemic struck.”, The Wall Street Journal, July 5, 2023

Live music: concerts lift artist income as AI threat looms – Ticketmaster-owner Live Nation is expecting record sales this year. The value of online ticket sales to concerts, festivals and the opera will surge past pre-Covid levels to hit almost $34bn globally this year. Fake tracks generated by artificial intelligence are already penetrating streaming sites, posing a threat to artists’ brands and income. Singers can be easily mimicked by computers online. In person, fans know the real deal.”, The Financial Times, July 7, 2023

Our early-adopters index examines how corporate America is deploying AI – Companies of all stripes are using the technology.  Technology stocks are having a bumper year. Despite a recent wobble, the share price of the Big Five—Alphabet, Amazon, Apple, Meta and Microsoft—has jumped by 60% since January, when measured in an equally weighted basket. The main reason for the surge is the promise of artificial intelligence (ai). Since the launch in November of Chatgpt, an ai-powered chatbot, investors have grown ever more excited about a new wave of technology that can create human-like content, from poems and video footage to lines of code.”, The Economist, June 25, 2023


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

Eurozone producer prices fall into negative territory for first time since 2020House prices decline for two quarters in a row as higher rates weigh on demand.  A key measure of eurozone inflation has fallen into negative territory for the first time in two and a half years, in a further sign that the surge in prices that has plagued businesses and households is now in retreat. The EU’s statistics office, Eurostat, said factory gate prices in the region fell 1.5 per cent in the year to May, the first outright decline since December 2020.”, The Financial Times, July 5, 2023

“GLOBAL ECONOMIC OUTLOOK 2023 – Low Growth Amid Persistent Threats – Despite strong headwinds, mostly related to the ripple effects from the war in Ukraine and high global inflation, the global economy has proven resilient so far in 2023. Despite the brighter outlook, growth of 2.1% this year would still represent a slowdown. We expect global commodity prices to continue easing from their 2022 peaks this year, but to remain well above pre-2021 levels. We expect global inflation to ease slightly, from 9.2% in 2022 to 7.1% in 2023.”, The Economist Intelligence Unit, July 2023

How Big is the Market for Crude Oil? While the global economy relies on many commodities, none come close to the massive scale of the crude oil market. Besides being the primary energy source for transportation, oil is a key raw material for numerous other industries like plastics, fertilizers, cosmetics, and medicine. As a result, the global physical oil market is astronomical in size and has a significant economic and geopolitical influence, with a few countries dominating global oil production.”, Visual Capitalist / Trading Economics / U.S. Geological Survey, June 30, 2023

Investment in Clean Energy Is Booming – China, Europe and the U.S. are leading the way. The International Energy Agency expects $2.8 trillion of investment in energy this year, with roughly 60 percent of that going toward clean energy. In the past two years, clean energy investment has risen 24 percent compared with 15 percent for fossil fuels. Producers of fossil fuels reaped huge profits in 2022, but less than half their cash flow is going toward new supply. Unsurprisingly, Middle Eastern producers lead in terms of spending on new supply.”, Geopolitical Futures, July 7, 2023


Global & Regional Travel Updates

“(Europe) Air traffic control strike will hit up to 1 in 3 summer flights – Up to a third of all European flights are at risk of being delayed or cancelled this summer after air traffic controllers said they would strike. Controllers at Eurocontrol, the European air traffic management body, revealed that they would walk out over the peak summer period after talks over staffing, rosters and pay broke down. An industry source said it could lead to delays or cancellations of up to 12,600 flights across Europe every day. ‘In a full-blown strike, 20 to 30 per cent of flights would be at least delayed,’ the source said. ‘They are big numbers.’”, The Times of London, July 6, 2023

Japan Airlines gives tourists chance to reduce baggage by renting clothes – Carrier embarks on a year-long experiment designed to help reduce CO₂ emissions. Visitors to Japan are being offered the ultimate chance to travel light: pack underwear and a toothbrush but rent all your clothes on arrival and ditch the environmentally unfriendly suitcase. Under a year-long experiment that began on Wednesday, passengers travelling with Japan Airlines (JAL) can rent outfits by season, size, formality and colour scheme. Under the scheme, a prospective visitor to Japan can reserve their clothes up to a month in advance to use for two weeks.”, The Financial Times, July 7, 2023


Country & Regional Updates


Brazil’s tax reform wins approval in lower house of Congress – Senate vote now needed to simplify one of world’s most complicated tax regimes.  Fernando Haddad, finance minister, hailed the successful votes on the legislation to simplify a web of duties and levies. Attempts at tax reform have for years bedevilled lawmakers and officials. It could also boost growth, adding as much as 2.39 per cent to gross domestic product over the next eight years, according to estimates from the Institute for Applied Economic Research.”, The Financial Times, July 6, 2023


Canada posts surprise $3.4-billion trade deficit for goods, largest since 2020 – Led by a decline in energy and agriculture exports, Canada posted a $3.4-billion merchandise trade deficit in May, down from a revised $894-million surplus in April, Statistics Canada reported Thursday. Bay Street forecasters had expected a $1.15-billion surplus that month. Goods exports declined 3.8 per cent due to both falling prices and lower shipments. In volume terms, exports decreased 2.5 per cent. Meanwhile, imports were up 3 per cent overall and 3.5 per cent in volume terms.”, The Globe and Mail, July 7, 2023


China on brink of consumer deflation – Latest signs of economic weakness likely to spur calls for government stimulus measures. China’s economy teetered on the brink of deflation in June, adding to calls for Beijing to launch a stronger stimulus package to sustain the country’s sputtering post-Covid recovery. The consumer price index was flat year on year and declined 0.2 per cent compared with the previous month, while factory gate prices fell at the fastest pace since 2016 as demand for consumer and manufactured products softened.”, The Financial Times, July 10, 2023


McDonald’s Stops Using Tomatoes In India Amid Record Prices—Alters ‘Maharaja Mac’ – McDonald’s restaurants in North and East India have stopped serving tomatoes in its burgers and wraps over what the company claims are quality and supply issues as surging prices of the vegetable in parts of the country have triggered internet jokes, music videos, heists and protests. The American fast-food giant’s Indian franchisee, Connaught Plaza Restaurants Ltd, put up notices across its stores on Friday saying it has not been able to get ‘adequate quantities of tomatoes which pass our stringent quality checks,’ despite its ‘best efforts.’”, Forbes, July 7, 2023


Indonesia Regains Upper-Middle Income Rank on Growth Rebound – Nation’s income per capita increased to $4,580 in 2022 Improved ranking to help nation hit high-income status goals. A strong post-pandemic rebound has pushed Indonesia back into the upper-middle income band of countries, according to the World Bank, putting it back on track to pursue its high-income status goal. Indonesia reclaimed the rank this year as gross national income per capita climbed to $4,580, based on the bank’s latest classifications. It’s an improvement from the previous reading of $4,140, which had kept it in the lower-middle income status for the second straight year in 2022.”, Bloomberg, July 2, 2023

New technology could cement Indonesia’s dominance of vital nickel – Indonesia is already the world’s biggest producer of nickel, a metal that is—among other uses—vital for building high-performance batteries. Demand for those is expected to increase hugely as demand for electric cars ramps up. Helped by new technologies for extracting nickel from the soil, Indonesia is planning big production increases. Macquarie Group, an Australian financial firm, thinks that by 2025 the country could supply 60% of the world’s nickel, up from around half today.”, The Economist, July 5, 2023


Japanese workers are finally seeing their pay rise – Japanese workers have seen their pay go up at a record rate after the government called on companies to help employees facing rising prices. Official figures show that compared to a year earlier wages rose by 1.8% in May, the fastest pace in 28 years. The most recent official reading of Japan’s inflation rate showed that core consumer prices rose by 3.2% in May from a year earlier.”, BBC News, July 7, 2023

Japanese stocks soar to 33-year high – The Topix index has jumped by more than 20% in 2023 to become the world’s best-performing major market. The Nikkei 225, another key index, has climbed by 27% to a 33-year high. The world’s third-largest economy is “basking in a post-pandemic glow”, says Vivek Shankar in The New York Times. Consumption is on the rise and tourists have returned.  While inflation has wreaked havoc in other economies, in Japan price pressures mark a welcome break from decades of grinding deflation. Growth, which hit an annualised rate of 2.7% in the first quarter, is ‘surprisingly solid’.”, Money Week, July 3,2 2023

United Kingdom

Britain is the only G7 country where inflation is still rising – Britain has been singled out as currently the least successful country in the G7 at curbing inflation and one of the three worst in the wider 38-nation Organisation for Economic Co-operation and Development. In its latest snapshot of inflation around the developed world, the organisation said that in the UK it picked up speed from 7.8 per cent in April to 7.9 per cent in May. That compared with an average reduction in inflation from 5.4 per cent to 4.6 per cent in the seven-nation club, which includes the United States, Japan and Germany.”, The Times of London, July 5, 2023

Le Pain Quotidien is closing all but one of its London stores – The brunch and bakery chain has gone into administration. Sarah Rayment, global co-head of restructuring at Kroll, said: ‘Pressures on parts of the hospitality and casual dining sector have been well highlighted. Brunchco UK Limited which is predominantly located in London has suffered from reduced revenues as a result of decreased footfall in the capital, high rents and increased wage costs. Le Pain Quotidien, which is French for ‘the daily bread’, was founded in Brussels in 1990 and has more than 260 locations worldwide.”, Time Out, July 5, 2023

United States

Does America need more unemployment? The labour market remains too hot for comfort. For every unemployed person in America, there are 1.6 jobs available, a ratio that is down a tad since mid-2022, but well in excess of the pre-pandemic norm. Since February 2020—before covid hit America—the economy has added nearly 4m jobs, putting employment above its long-term trend line. There do not appear to be many workers left on the sidelines: some 84% of prime-age workers (aged between 25 and 54) now participate in the labour force, the most since 2002 and just a percentage point off an all-time high.”, The Economist, July 9, 2023

The Northeast is losing out to America’s new economic hotspots – Six fast-growing states in the South now add more to the national GDP than the Northeast, the perennial powerhouse, Bloomberg reports. Americans are spreading out, physically and economically…..Florida, Texas, Georgia, the Carolinas and Tennessee — are in the middle of a “$100 billion wealth migration” as the U.S. economic center of gravity tilts south, Bloomberg notes. The switch happened during peak COVID. There’s no sign it’ll reverse. A flood of transplants helped steer about $100 billion in new income to the Southeast in 2020 and 2021 alone, while the Northeast bled out about $60 billion, Bloomberg writes from IRS data.”, Axios, July 9, 2023


Vietnam becomes vital link in supply chain as business pivots from China – The accelerating shift to countries such as Vietnam is part of a growing ‘China plus one’ strategy to redraw global supply chains. As rivalries grow between China and the US over technology and security, more companies fear curbs on what and where they can manufacture. As a result, many are supplementing production in China, still the world’s biggest manufacturing hub, with expansion to other countries. ‘Koreans, Taiwanese, Chinese — there seems to be an unstoppable transfer or at least relocation from mainland China into other countries,’ said Koen Soenens, Deep C’s sales and marketing director. ‘Foreign companies currently in China, ask them what’s next. [They say] ‘For the Chinese market, we stay in China; to serve our overseas clients, we are looking for a new location’.”, The Financial Times, July 2, 2023


Brand & Franchising News

Buffalo Wild Wings ends its Canadian operations – Buffalo Wild Wings has closed its remaining Canadian restaurants. In a statement, the U.S.-based chicken wing chain thanked its customers for supporting the business ‘throughout the years.’ ‘Buffalo Wild Wings routinely evaluates locations to serve our guests best, and we have made the difficult decision to close our sports bars in Canada,’ a spokesperson for the chain wrote in a statement Wednesday.”, BNN Bloomberg, June 28, 2023

Carrefour Brasil bets on know-how to expand small stores operation – Grupo Carrefour Brasil (CRFB3.SA) launched a franchise model of convenience stores in the Brazilian market on Wednesday, aiming to tap into its know-how from years of experience in Europe, a top executive said. Carrefour Brasil’s convenience executive director Joao Edson Gravata said that the franchise format would put Carrefour in a stronger position to take on competitors. The convenience segment, which is mainly in stores operated by large chains, is relatively new in Brazil, Gravata said. We are part of this context, we have an important presence, and we want to expand it.’”, Reuters, June 29, 2023

Five Guys burger scalpers face online criticism as popular US chain makes South Korean debut – The asking price on a second-hand platform for two cheeseburgers and fries from popular US chain Five Guys was more than double the regular cost. A South Korean customer has come under fire for trying to capitalise on the craze for Five Guys burgers, which this week opened its first outlet in the country, by selling a snack set for 100,000 won (US$76) on an online marketplace. The US fast-food chain’s store in Seoul’s wealthy Gangnam district drew snaking queues as diners braving the wet weather jostled to grab a bite.”, South China Morning Post, June 28, 2023. Compliments of Paul Jones, Jones & Co., Toronto

Inflation hits harder at chicken chain – Chicken chain KFC’s price increases are currently outpacing Australian inflation rates and the price increases of rival fast food franchise McDonald’s, according to a media report. On average, KFC’s prices have increased 14.7% over the last 12 months, while McDonald’s have increased by 8% since August 2022, however KFC’s main menu items still retail at an average 6% discount to McDonald’s equivalents. KFC attributes the price increases to growing costs of inputs such as potatoes, chicken, wheat and oil, and the impact of wage increases across its workforce.”, The Guardian, June 20, 2023. Compliments of Jason Gehrke, Franchise Advisory Centre, Brisbane

McDonald s opened a new restaurant in the Kyiv region – “Construction of the facility was started back in 2021. Due to a full-scale invasion, the project was postponed, and with the resumption of restaurants, it was resumed. With the opening of each restaurant, the company returns favorite dishes and familiar service to Ukrainians, supports local communities and provides more opportunities for employment. Currently, there are 91 McDonald’s restaurants in Ukraine,” the article says.”, (Ukraine) Economic Truth, June 29, 2023. Compliments of Paul Jones, Jones & Co., Toronto

Subway’s CEO led turnarounds at Burger King and Avis. He’s doing it again before the sandwich chain’s $10 billion sale: ‘I have license to try anything and everything’. But between 2015 and 2021, as business cratered, Subway closed 6,000 of its U.S. stores, almost one-quarter of them. The company has now resumed opening new ones. Four years ago, it tapped Chidsey, a turnaround artist who had fixed Burger King some years earlier as CEO, to work his magic again, with owners now eyeing a sale to private equity that reportedly could fetch $10 billion. While sales per restaurant, excluding newly opened or closed ones, are close to where they were in 2012, they’ve risen in each of the last ten quarters.”, Fortune, July 7, 2023

Subway celebrates 15 new master franchise agreements – Subway has announced that it is strategically expanding its international footprint and has celebrated the signing of its 15th new master franchise agreement since 2021. The brand’s latest agreements in Bahrain, Georgia, Mainland China, Uruguay, Costa Rica and Panama will reportedly add more than 4,000 future restaurants across Europe, Middle East and Africa (EMEA), Asia Pacific (APAC), and Latin America and the Caribbean (LAC) within the next 20 years. Since 2021, Subway says that it has signed 15 master franchise agreements or country development agreements across EMEA, LAC and Asia Pacific, totalling more than 9,000 future restaurant commitments.”, New Food Magazine, July 4, 2023

Mexican fast-food brand writes off $37 million – Australia – Mexican food-themed restaurant chain Taco Bell has recorded a $37 million impairment and posted a same-store sales decline of 4.8% for the year, according to a media report. Listed multi-brand franchise operator and local operator of Taco Bell, Collins Foods (CKF), remain confident the brand can succeed in Australia despite its negative impact on the group’s full-year profits. CKF reported revenue of $1.3 billon in the year to April 30, but net profits declined by 76% to $12.7 million due to Taco Bell’s results.”, Brisbane Times, June 27, 2023. Compliments of Jason Gehrke, Franchise Advisory Centre, Brisbane

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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 or +1 949 224 3896.

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