A pedestrian walks previous a Tim Hortons restaurant.
Ben Nelms | Bloomberg | Getty Photos
Tim Hortons is slated to open its first location in Houston this summer season, signaling the Canadian espresso chain’s technique to maneuver additional south for its subsequent part of U.S. enlargement.
The Restaurant Manufacturers Worldwide chain has greater than 600 U.S. areas, making it the third-largest espresso chain within the nation, trailing behind Starbucks and Dunkin’. But it surely’s a distant third place, and the chain has struggled to take maintain with U.S. shoppers regardless of previous makes an attempt, relationship again a long time in the past when it was owned by Wendy’s. Nonetheless, Tims is seeking to erase the hole and overtake Dunkin. In 2021, the chain noticed its strongest new restaurant progress within the U.S. since 2016.
Jose Cil, chief government of mum or dad firm RBI, stated in an interview that the chain’s packaged espresso enterprise is rising “fairly extensively” within the U.S. by direct-to-consumer web site gross sales and in grocery shops.
“It is a good indicator of consciousness, in addition to demand for our merchandise, so there’s numerous markets within the U.S., south of our southermost eating places: locations like Texas, like Florida,” he stated.
Most of Tims’ present U.S. areas are concentrated in states that share a border with Canada: New York, Michigan and Ohio. The subsequent part of U.S. enlargement will concentrate on markets like Texas and Florida, in response to Cil.
“Between snowbirds and those who have moved all the way down to Florida completely, there’s greater than 3.5 million Canadians, so model consciousness is basically sturdy. Demand is powerful. We simply should be there to satisfy it,” Cil stated.
In recent times, the corporate has rethought its enterprise mannequin. It rebuilt a lot of its Ohio areas with smaller sq. footage. Cil stated the brand new format is quicker to construct and has higher unit economics than the previous mannequin. The brand new U.S. eating places are additionally centered on drinks, baked items and sizzling breakfast sandwiches, not like its Canadian shops, which have been pushing into lunch and dinner.
“We’re not a full-blown [quick-service restaurant], we’re centered on what we do finest,” Cil stated.
The U.S. is not the one worldwide market seeing aggressive enlargement from Tims. The chain just lately opened its four-hundredth location in China, lower than three years after opening its first.
In its residence market of Canada, Tims has confronted a fair proportion of struggles. Previous to the pandemic, it was in turnaround mode, upgrading its espresso and meals choices and launching a loyalty program within the face of stagnating gross sales progress. Covid outbreaks put extra stress on its comeback.
Nevertheless, the chain reported Canadian same-store gross sales progress of 11.3% for the fourth quarter, aided by gross sales from loyalty program members and common promotions, like a collaboration with singer Justin Bieber.
Shares of Restaurant Manufacturers have been up greater than 3% in afternoon buying and selling on Tuesday after the corporate reported its fourth-quarter outcomes. Its earnings and income each topped Wall Avenue’s estimates, a rarity this quarter for restaurant firms as they face increased prices.