Top Global Risks in 2019: Coming Soon to Your Community!

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Whenever I visit a chain grocery store like Safeway, Albertsons, or Publix, I experience sameness. Same layout, same products, same experience – regardless which location I’m shopping. But Wegmans, an east-coast grocery chain based in Rochester, New York, is different.

The store I visited last week is in Gainesville, Virginia. Just 37 miles west of the US capitol, Gainesville has lost its rural chops. Today, it’s a DC suburb, connected by a perennially-choked highway called I-66.

At Wegmans, you can peruse around 70,000 items in 140,000 square feet of retail space. Almost ten Trader Joe’s stores would fit inside the Gainesville store alone. The building’s exterior is faux European schlock. Pink brick and white stucco Tudor façade with clock tower, surrounded by acres of asphalt. The front of Wegmans is expansive. Imagine what that looks like. Now, think even wider. You’re still not close. If there were an award for ugly architecture, this would be my top pick.

At the Gainesville store, the MAGA hat crowd mingles with Bernie2020 millennials, reflecting Virginia’s emergent purpleness. Out here, cars rule, serving as transportation, and to communicate the driver’s fervent sentiments. Throughout the parking lot, you’ll read bumper stickers reflecting a microcosm of the country’s divided politics. Pro-life, Pro-God, Pro-gun on the back window of an F-150 pickup parked alongside Coexist and Obama-Biden 2012 on a Prius.

Despite the store’s overwhelming bigness, the customer experience at Wegmans is remarkably fun. “We have never tried this brand of harissa,” my wife says. I glance at the price, wince, and say nothing. Into the cart tumbles the jar of harissa, joining 31 other items, including several I selected. At Wegmans, I’m used to this. Enter the store with a short grocery list, leave with overflowing bags of impulsivity – a testament to the power of retail psychology, cleverly applied. Final tally this visit: $157.11. If there are monuments to consumption, Wegmans is the colossus.

For me, seeing such precise operational choreography sparks a question: what could go wrong? Quite a bit. From Afghanistan to Zimbabwe, worldwide risks mean local impact.

According to Control Risks, an international consultancy, there are five major global risks for 2019:

US China trade confrontation. This development foretells a “new global order,” and it’s impossible to predict how it will play out. “This antagonistic relationship will complicate life not only for businesses in China and the US. Companies in a wide orbit around this stand-off will feel the political and economic impact.”

Three domains of data influencing (controlling?) large populations. In China, the government’s policy is total control of data. In the European Union, the policy skews toward consumer protection, with the recent passage of the GDPR. And in the US, despite rumblings about the perils of data monetization, our resolve to mitigate problems is tepid, at best. “Brace for the challenge of collecting, storing and transferring data within and between these three domains against a backdrop of inconsistent enforcement and escalating cyber security threats.”

Divisive American legislative gridlock. This year’s government shutdown provides a glimpse for what’s to come – or not, if positive change is what you’re after. “Democrats in the House of Representatives will seek to pin the President under an investigative lens. Pushback from a Republican Senate and White House will erase any hopes of consistency for business. Trade policy will remain unchanged; the pace of deregulation will slow. Foreign policy will remain unsettled and ambivalent in a global environment that requires clarity and resolve.”

Weather disruptions. “Extreme weather and all it brings have never been more significant as a business risk,” according to Control Risks. The Economist magazine spelled out the problem similarly in an article, Hot, Unbothered (February 23, 2019). “Corporations need to rethink how they approach climate risk. . . Two things have changed. First, supply chains have grown complex and global. As links have multiplied so, too, have points of possible failure. Many sit in the tropics, more given to weather extremes than the temperate West.” Yes, we have no bananas!

Nationless companies. The ubiquity and embeddedness of information technology, the distributed manufacturing of consumer goods and industrial products, and global data storage centers defy our ability to know a company’s country of origin, or to figure out where, exactly, it operates. But as “globalized companies enter 2019, they risk – ironically – becoming nationless as nationalist politics continue to advance across the world. Formal and informal barriers are rising. Frictionless trade is beginning to rub, supply chains are starting to drag. Business leaders must re-calibrate and adapt to this new reality or global players will end up being played by a world in uncertain transition.”

I’ve never visited Wegmans headquarters, but I bet these and other risks are scrawled in red across whiteboards in more than one department.

The Washington, DC regional economy depends on the prosperity of thousands of Federal workers and government contractors. What would a protracted government shutdown mean to Wegmans in Gainesville? Just ten years ago, this wasn’t a question, let alone a thought. Now, we’ve painfully felt the impact. What will ongoing turmoil in the Middle East or drought in North Africa mean for our delivery logistics and food supply chains? Will I be able to buy harissa when my jar is finally depleted in 2024? If not, what will replace it? Five years from now, will my choice of condiment be limited to Heinz Ketchup? And if there’s no more Heinz, then what?

2019 portends to be revenue risk roller coaster. Hold on tight.

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