Tim Hortons poised for major expansion
Coffee chain planning more locations, menu revamp
There’s room in the market for 700 more Tim Hortons locations in Canada and increased sales at existing stores with new menu items like panini sandwiches, the chain’s CEO told investors on Tuesday.
“You might think that with our strong market share, there might be limited opportunity for growth in Canada. That is simply not the case,” said Paul House, CEO and president.
House was speaking at the Raymond James Annual Institutional Investors Conference in Orlando, Fla.
“We believe that there is an opportunity for 4,000 locations in Canada.”
Tim Hortons currently has 3,295 locations in Canada, 714 across 10 U.S. states in the northeast and Midwest, and five locations in the United Arab Emirates.
Last year, Tim Hortons Inc. stock went into a tailspin and the company was criticized for expanding too quickly after the sudden departure of Donald Schroeder as president and CEO.
But at the conference, House said Tim Hortons plans to open between155-175 new locations in Canada and 80-100 full-serve restaurants in the U.S. in 2012. At the same time it wants to increase samestore sales by 3 per cent to 5 per cent in Canada and by 4 to 6 per cent in the U.S.
Another 15 locations are planned in countries belonging to the Gulf Cooperation Council, which includes Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates (UAE). The company hopes to open 120 in the region within five years. “We believe there is long-term potential to take the Tim Hortons brand to other parts of the world, but we are learning from our marketing entry into the GCC first,” said House. He did not specify where the restaurants would open, but said the restaurant chain is most popular in Canada’s Atlantic provinces, where there is one restaurant for about every 7,000 residents. In Ontario the figure is one restaurant per 8,000 residents, and in Quebec and Western Canada, meaning there’s room for development in those areas. House said recent menu innovations, like espressos and lattes, beef lasagna casserole, fruit smoothies and specialty bagels helped increase the average cheque at stores in 2012. He hinted that panini sandwiches, which were test-marketed in the U.S. last year with great early success, may make Canadian menus.
The made-to-order panini sandwiches test-marked in Ohio and New York state restaurants last year included a grilled cheese, Tuscan chicken, pesto chicken, chipotle turkey, smoked ham and cheese and bacon, tomato and cheese. They were priced between $3.29 and $4.29 (U.S.)
In the U.S., Tim Hortons is positioned as a café and bake shop, and the panini sandwiches were aimed competing with bakery-cafe leader Panera Bread Co., according to U.S. business reports.