Tim Hor­tons takes a close look at Tims TV fol­low­ing con­tro­versy

The Guardian (Charlottetown) - - BUSINESS - THE CANA­DIAN PRESS

Ex­ec­u­tives at Tim Hor­tons are re­con­sid­er­ing whether it’s worth the risk of flavour­ing your cof­fee break with po­ten­tial con­tro­versy.

Af­ter the res­tau­rant chain was dragged into a clash be­tween en­vi­ron­men­tal­ists and oil in­dus­try sup­port­ers last month, Daniel Schwartz, CEO of Tim Hor­tons’ par­ent com­pany Res­tau­rant Brands, said Mon­day the com­pany is re­view­ing its Tims TV in­store dig­i­tal screens.

“We’re now tak­ing a look at the whole Tims TV pro­gram and what makes sense for the brand,’’ said Schwartz in an in­ter­view with The Cana­dian Press.

“As with many things in the res­tau­rant, we ex­plore what’s best from time to time.’’

The re­view comes af­ter Tim Hor­tons was put in the hot seat for giv­ing ad­ver­tise­ment space to pipeline gi­ant En­bridge on its in-store dig­i­tal screens.

The com­mer­cials an­gered en­vi­ron­men­tal­ists who launched an online pe­ti­tion to get them pulled. When Tim Hor­tons yanked the En­bridge ads, some oil sec­tor sup­port­ers called it an in­sult to one of Canada’s big­gest in­dus­tries and launched their own boy­cott.

The con­flict showed the po­ten­tial dan­gers of a brand as rec­og­niz­able as Tim Hor­tons selling ad space to com­pa­nies that could ran­kle its cus­tomers.

The cof­fee and dough­nut chain be­gan ex­per­i­ment­ing with Tims TV last year be­fore rolling out screens at restau­rants across the coun­try. The com­pany de­scribed Tims TV as its own ver­sion of a com­mu­nity space, serv­ing as a home for the latest news, weather, lo­cal events and branded videos.

But the thrust of the con­cept was to pocket rev­enue from what’s es­sen­tially a bill­board in­side the restau­rants. Ad­ver­tis­ers could buy air­time on Tims TV in a loop­ing ro­ta­tion of con­tent.

Cana­dian movie theatre op­er­a­tor Cine­plex Inc. (TSX:CGX) runs Tims TV as part of a mul­ti­year agree­ment with Tim Hor­tons where both com­pa­nies sell advertising time on the screens.

On Mon­day, Res­tau­rant Brands In­ter­na­tional Inc. (TSX:QSR) re­ported a sec­ondquar­ter profit of US$9.6 mil­lion, or five cents per share for the three months ended June 30. That com­pared with a profit of $75.1 mil­lion or 21 cents per share a year ago be­fore the two brands com­bined.

The com­pany be­hind Tim Hor­tons and Burger King said rev­enue to­talled $1.04 bil­lion, up from $261.2 mil­lion in the sec­ond quar­ter of 2014 be­fore Burger King ac­quired Tim Hor­tons late last year.

Same-store sales — sales at out­lets that have been open for at least a year — were up 5.5 per cent at Tim Hor­tons lo­ca­tions, while Burger King had same­store sales growth of 6.7 per cent.

Res­tau­rant Brands said it will pay a quar­terly div­i­dend of 12 cents per share, up from 10 cents per share.

On an ad­justed ba­sis, Res­tau­rant Brands earned $142.7 mil­lion or 30 cents per share in its latest quar­ter. An­a­lysts had ex­pected a profit of 25 cents per share for the quar­ter, ac­cord­ing to Thom­son Reuters.

Tim Hor­tons opened lo­ca­tions at a record pace in the first half of this year with net growth reach­ing a his­tor­i­cal high of 105 new restau­rants, Schwartz said. About 90 of those stores were in Canada.

The chain is also look­ing to make a big­ger splash in the Mid­dle East with its lo­cal op­er­at­ing part­ner Ap­parel Group. Schwartz said he re­cently vis­ited the re­gion along­side chief fi­nan­cial of­fi­cer Josh Kobza with the in­ten­tion of get­ting a bet­ter grasp on how to boost the brand’s pres­ence.

“I’m re­ally ex­cited about the progress that has been made,’’ he said.

“We’ve been fig­ur­ing out the tar­get mar­kets and started speak­ing with part­ners all around the world.’’

CP PHOTO

Freshly-brewed cof­fee sits on a hot plate in a Tim Hor­tons out­let in Oakville, Ont. on Sept.16, 2013.

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