Tim Hortons is increasing its focus on attracting customers in the afternoon and evening, as the chain looks for growth amid a “new normal” in traffic patterns to its restaurants.
Tim Hortons has been adding lunch and dinner items to its menu, such as wraps and bowls, and such items are now included in 10 per cent of its transactions, which helped to drive sales momentum for the chain in the third quarter.
“We’re beginning to see a bit of a new normal as people settle in to flex work, and are establishing schedules on when they go to the office and when they work from home,” said Duncan Fulton, chief corporate officer for Tim Hortons parent company Restaurant Brands International Inc. QSR-T.
Tim Hortons saw visits to its downtown restaurants down by 5 per cent in the third quarter compared to 2019, an improvement from the third quarter of last year when such visits were down more sharply.
Tim Hortons has been working on a turnaround plan for some time, adding menu items such as cold drinks, and improving food and beverage quality.
Even when customers are not doing the morning coffee run on the way to the office, Tim’s wants to be an option for lunch, afternoon snacks or dinner he said, noting the 10-per-cent figure as a signal of the room the company still has to grow during afternoon hours. The chain is planning to add a new savoury baked good category soon as an option for afternoon snacking, Mr. Fulton said, adding that plans for more categories are in the works.
“There are only so many years you can continue comparing yourself to 2019,” he said. “The reality of today is what it is. … our objective is to grow our business based on today’s normal.”
Comparable sales at the coffee chain – an important metric that measures sales growth not accounted for by new store openings – were up 9.8 per cent in the third quarter, including 11.1-per-cent growth in Canada.
Toronto-based Restaurant Brands, which also owns Burger King, Popeyes Louisiana Kitchen and Firehouse Subs, reported on Thursday that net income grew by 61 per cent in the third quarter, to US$530-million or US$1.18 per share, compared to US$329-million or 71 U.S. cents per share in the same period the prior year. Earnings growth included the impact of an income tax benefit this year, as well as growing profits at Tim Hortons and Burger King.
Revenue grew by 15.5 per cent to US$1.73-billion in the three months ended Sept. 30.
Burger King’s same-store sales grew by 10.3 per cent, but growth was slower in the U.S. at 4 per cent, where the chain has been trailing competitors McDonald’s and Wendy’s. In September, the company also announced a two-year, US$400-million plan to improve its U.S. results, boosting advertising spending and renovating outdated locations.
Same-store sales rose by 3.1 per cent at Popeyes, and were flat at Firehouse Subs, which the company acquired last year in a US$1-billion deal.