TIM HORTONS LAUNCHES FIRST KIDS’ MENU.
Trying to lure customers from the competition
Tim Hortons launched its first kids’ menu across Canada on Wednesday, an apparent attempt to claw families away from competitors such as McDonald’s as the coffee behemoth works to rehabilitate its image.
The new menu of grilled cheeses, chicken strips and cream-cheese chicken wraps is part of a series of promised food innovations and comes as the brand starts to recuperate after a protracted battle with discontented franchisees.
“It’s a been a fun ride,” Tim Hortons president Alex Macedo said. “Actually, fun is probably the worst word I could use.”
The ongoing saga between the franchisees and Tim Hortons parent Restaurant Brands International Inc. bubbled up in September, when Tim Hortons locked the leader of the franchisee revolt out of his stores in Alberta, accusing him of breaking an agreement that forbids franchisees from publicly disparaging the brand.
David Hughes, thenpresident of the Great White North Franchisee Association, denied the allegation. An industry source said the franchisee group continues without Hughes, and still with an active membership.
But this week, Macedo said relationships with franchises were on the mend, pointing to his series of meetings across Canada and a plan for improving customer experience that he said took input from store owners. Franchisees, he said, will finish the year more profitable than last year.
“We’re trying to go back to our roots and be the brand that everyone feels really good about in Canada,” he said. “When we drop the ball, people feel it.”
Macedo’s return to the Tim Hortons roots includes a revamped advertising strategy, which most recently saw the coffee chain fly the sole hockey team in Kenya to Canada to scrimmage with NHLers.
In addition to the kids’ menu — which will start in the U.S. later this month — Tim Hortons has recently unveiled all-day breakfast and announced the coming of a replacement to its leaky coffee lid. Macedo also signalled plans to “innovate on coffee” but wouldn’t say what changes he hoped to make or new products he hoped to release.
Robert Carter, an industry adviser in food service with NPD group, said in the $60-billion restaurant industry — with flat annual sales growth of around two per cent — moves like adding a kids meal can be seen as an attempt at siphoning customers away from major competitors like McDonald’s.
“The challenge for restaurants is, how do you create growth greater than 1 or two per cent?” Carter said. “Generally it comes down to literally stealing shares from your competitive set.”
“What (Tim Hortons has) done over the last year is really start to identify, ‘Where do we need to be stealing customers to help drive traffic?’ And I think that’s why you’re seeing things like the kids meals.”
But Macedo wouldn’t talk about the competitors, let alone name them. Instead, he said the kids’ menu was something that emerged from listening to customers and franchisees.
“I was trained so much, people can torture me and I don’t say a word of any competitor.”