In recent months, Tim Hortons has stepped up its advertising to lure in customers with products such as dark roast coffee and cold fruit juices. But its next big marketing push is designed to attract people on the other side of the counter: In August, the coffee-and-doughnuts chain will be launching a national campaign in Canada making the case for why people should consider working there.
Like many in the restaurant and retail industries, Tims is seeing wage inflation amid stiff competition for new hires. After months of lockdowns that shuttered stores and restaurants, many are scrambling to hire staff to serve customers who are venturing out more.
“The velocity of hiring is such that you’ve got demand outstripping supply at the moment,” Duncan Fulton, chief operating officer of Tim Hortons parent company Restaurant Brands International Inc ., said in an interview. “Everyone is feeling it, and has to be highly competitive.”
Sales have been rebounding at Tim Hortons, as the chain has benefited from a “back to basics” strategy designed to improve food quality and focus on strategic growth areas such as lunch and cold beverages. New product launches, as well as improvements to menu items such as sandwiches, have helped to boost customer traffic and increased both breakfast and lunch sales.
Toronto-based RBI, which also owns the Burger King and Popeyes Louisiana Kitchen chains, reported that its second-quarter revenues grew by 37 per cent to US$1.4-billion, compared with a period last year when COVID-19 severely affected the industry.
Tim Hortons, the company’s biggest source of revenue, reported comparable sales growth of 27.6 per cent in the three months ended June 30. (Comparable sales is an important metric that tracks sales growth at locations open for more than a year.) Burger King’s comparable sales grew by 18.2 per cent, while the same metric at Popeyes fell very slightly, by 0.3 per cent.
RBI reported that its net income grew significantly in the second quarter, to US$391-million or 84 cents a share, compared with US$164-million, or 35 cents, in the prior year. RBI’s share price increased by 5.4 per cent to $85.12 after the news on Friday.
A significant increase in working from home has affected many restaurants that cater to morning commuters, including Tim Hortons. Mobility trends are beginning to improve as lockdowns ease in Canada, though they still remain lower than prepandemic levels and lag the U.S., RBI chief executive officer Jose Cil said on a conference call to discuss the company’s earnings on Friday. He added that rising commodity costs are also being felt in the restaurant industry.
“We’re optimistic that with the continuing evolution of our menu and all the marketing firepower we have, we can capture new routines as people do go back” to work, Mr. Fulton said.
In March, RBI announced it would spend an additional $80-million on advertising for Tims this year. More than half of that has yet to be spent, meaning that the company’s advertising presence is about to step up significantly.
The company is also opening new restaurants at a faster clip, after COVID-19 slowed the pace of expansion: RBI opened 378 new restaurants across all three of its fast food banners in the first half of the year. Tims plans to expand with roughly 200 new stores in China by the end of the year.
In Canada, in addition to an advertising push, the company is also looking at ways to simplify the recruiting process. For example, some franchisees have been experimenting with allowing people to send job applications by text message, which in the test phase has led to higher numbers of applicants and more hires.
The labour market has received a shot in the arm as COVID-19 restrictions have lifted. The Canadian economy added 230,700 jobs in June, according to Statistics Canada, with all of the growth attributed to part-time positions. That was before Ontario, the largest province, moved to the latest phase of its reopening plan, allowing for a return to indoor dining, gyms, movie theatres and other activities.
“There are labour shortages across Canada in restaurants, in retail, in every jurisdiction,” Mr. Fulton said, adding that some franchisees have been filling in on late-night shifts and manning drive-throughs themselves because they are short on staff.
RBI is having conversations with all levels of government in Canada about how they can improve companies’ access to labour, he said.
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Susan Krashinsky Robertson