December 8, 2023

Today's Topics

Hello! One contestant has beaten out 455 rivals to claim the top prize of $4.56m on Netflix's Squid Game, the biggest cash prize in reality TV history. Today we're exploring:

  • McDomination: The Golden Arches have huge ambitions.
  • Grade inflation: Most students are getting A's at Harvard and Yale.
  • Stubbed out: British American Tobacco just booked a $31.5bn write-off.

Not yet a subscriber? Sign up free below.


McDonald’s is gearing up for its "fastest period of growth" in the Big Mac maker’s history, unveiling plans to open a staggering 10,000 new stores globally by 2027, which would bring its total restaurant tally to 50,000.

If you live in the States, there might be a new McDonald’s coming to your town — with 900 new stores slated for the US — but the primary focus for the expansion is in its developmental markets like China, India, Japan, and Brazil. In these regions, Mickey D's is planning a staggering 7,000 new restaurants, with over half earmarked for China.F

or some perspective: it took 33 years from opening the first modern-day McDonald's to hitting 10,000 stores, and two decades to go from 30,000 to 40,000. At a rate of roughly 2,000 stores per year, these plans will see a new McDonald’s opening somewhere around the world every 4 hours and 23 minutes.

Supersize me

The company isn’t just supersizing its physical presence, though. McDonald’s is also eyeing 250 million members on its loyalty program by 2027 — who typically spend twice as much as non-members — and also recently unveiled a raft of changes to its all-important core menu, with “softer" buns, “meltier” cheese, and extra “special sauce”.

However, stealing the spotlight amidst these plans is an entirely new restaurant concept: CosMc, a McDonald's spin-off brand that will focus on a slimmer, mostly drinks-and-snacks-focused, menu.

Straight A’s

Yale parents must have been particularly proud of their degree-chasing darlings, with a remarkable 79% of grades given to students being an A or A- in the 2022/23 academic year, according to a new study from an econ professor at the college, first published in the student newspaper.

The proportion of Yale students taking home the top grade has risen from ~40% in the 2010 academic year to ~58% just 12 years later, leaving some to question whether “grade inflation” is cheapening the academic achievement. But it’s not just Yalies who have become used to getting straight A's.

Indeed, letter-grade inflation has been haunting the hallowed halls of Harvard almost since the institution introduced the system in the late 19th century, with one college committee worrying that “grades A and B are sometimes given too readily” all the way back in 1894. Indeed, Harvard students’ average GPAs rose to a peak of 3.8 in 2022, causing college staff and students alike to worry about “grade compression”.

The problem colleges face now is how to manage expectations. Giving fewer A's is easy… dealing with a horde of angry students who are entering the workforce with worse grades than they were expecting… that’s a bit trickier.

Not yet a subscriber? Sign up free below.

Stubbed out

Cigarette giant British American Tobacco (BAT) has wiped a whopping $31.5 billion from the value of some of its US brands like Newport, Camel, and Pall Mall, in one of the biggest corporate write-offs in history.

CEO Tadeu Marroco stoically dismissed the writedown as “accounting catching up with reality”, with American smoking rates continuing to plummet, hovering near record lows of 12%, down from 26% just 20 years ago. The move caused shockwaves throughout the industry, sending BAT shares, as well as those of rivals Altria and Philip Morris, down 9%, 3%, and 1%, respectively.

Still unmatched

Big tobacco has been smoldering since the Surgeon General's 1964 report linking smoking to cancer. But, nearly 6 decades on, tobacco is still... big (and profitable). Indeed, relative to what consumers pay, cigarettes remain incredibly cheap to manufacture, with BAT itself reporting a 38% operating profit margin last year. That’s better than what Coca-Cola, Nike, Apple, and even luxury giant LVMH managed.

That margin gives the company a lot of financial firepower in its transition for the future, with BAT aiming to generate up to 50% of its revenue from smoke-free non-combustibles, such as vapes, by 2035. That's the obvious strategy, given that you're much more likely to find students stealthily vaping than lighting up a cigarette these days — CDC data reveals that just 2% of high schoolers admit to smoking cigarettes, a record low.

More Data

Do you want AIs with that? A company that’s created a talking chatbot for fast-food drive-thrus revealed that humans were still needed in >70% of orders to ensure its AI system didn’t mess up.

SpaceX has approached investors about a tender offer that would value the company at ~$175 billion (context: that's more than Disney is worth [$169bn]).

• After being pitted against an entire spectrum, Peach Fuzz, is Pantone's color of the year for 2024 — taking the title from Viva Magenta, a Barbie-pink hue selected for 2023.

• Following a temperature drop in the Atlantic Ocean, 52 “cold-stunned” endangered sea turtles were flown via private jet to Florida for rehabilitation.


• Who travels the most in America?

Off the charts: What platform, which were we charting about below, has announced it is pulling out of South Korea? [Answer below].

Answer here.

Not yet a subscriber? Sign up free below.

Recent newsletters

Analogs and algorithms: The changing shape of the recorded music industry
Amazon’s empire: How the tech giant makes its money
Powering down: Electric vehicle sales lose momentum
We and our partners use cookies and similar technologies (“Cookies”) on our website and in our newsletters for performance, analytical or advertising purposes to ensure you have the best experience on our site and/or interaction with us. To find out more about the use of Cookies, see our Cookie Notice. Please click OK if you consent to our use of Cookies or click Manage my Preferences to manage your Cookie preferences.