A few holes in Timmies’ China plan

There’s less than meets the eye to Tim Hortons’ flashy expansion plans in China, announced last week by the chain’s owner, Restaurant Brands International Ltd.

Tim Hortons will be a latecomer with its scheme to open 1,500 stores in China over the next decade. Starbucks Corp. and Whitbread’s Costa Coffee chain have already arrived in strength. And local players in China’s “café society” phenomenon — who know their customers better than interlopers — will also put up fierce competition.

It’s likely that RBI, all starry-eyed about high-spending Chinese millennials, isn’t aware that about 400 million Chinese still live in poverty.

Meanwhile, Tims’ core Canadian business has suffered declines in samestore sales growth — a key measure of success in retailing — in each of the past three years under Brazilian ownership. Last year, Tims’ same-store sales actually dropped by 0.1 per cent. That’s a five-alarm fire in retailing, but not for RBI.

Tim Hortons has had several owners since its founding in 1964. But one constant is the chain’s continued failure to make its U.S. stores — about onethird of the total — as successful as its Canadian outlets. RBI now proposes to replicate Tims’ Canadian success in Guangdong and Shanghai, having failed to do so in Michigan or New England.

Genuine success for Tims requires improvement in North American franchisee relations, enticing menu items and scouting for better store locations (especially in the U.S.).

But the Brazilian private-equity owners of Tims prefer the Hail Mary pass — a costly move that boosts sales immediately but not sustainably — over the everyday “blocking and tackling” of generating more revenue from existing operations.

Gambits like this one remind us the iconic Canadian brand is in the hands of financiers, not businesspeople who build to last. The Murdoch empire’s twilight hours

Larger-than-life media mogul Rupert Murdoch finally is trimming his sails with his blockbuster $95-billion sale of Hollywood studio 21st Century Fox to Walt Disney Co.

Yet while obviously making Disney even more of a power to be reckoned with, Murdoch, who will end up with the biggest equity stake in Disney, is not surrendering all his influence. And the 87-year-old Murdoch retains a collection of assets, including Fox News, the Fox broadcast network, the Wall Street Journal, the tabloid New York Post, and the U.K.’s the Times and the Sunday Times.

Of greatest interest now is the fates of the Murdoch progeny. For now, the plan is for right-of-centre Murdoch and eldest son, Lachlan, to continue running Fox News and Murdoch’s proBrexit U.K. papers and pro-Donald Trump U.S. journals.

But Murdoch’s left-of-centre progeny, Elisabeth and James (all three are children of Murdoch’s second marriage) are also accomplished business successes.

Indeed, Elisabeth, as an entrepreneur, is more like her father than the boys. It’s possible, of course, that Lachlan will buy out his siblings and become sole heir to what remains of the Murdoch media empire.

But it’s just as likely that Elisabeth and James will pool their ownership stakes in parent News Corp. to strike a deal with Lachlan in which they take ownership of selected Murdoch family assets.

Apart from the mainstream television operations, these are not mere com- mercial properties but opinion platforms — media outlets that shape the national conversations in Britain and the U.S.

A change in ownership of those properties, and certainly one that has Elisabeth and James calling the shots, would mark a seismic shift in the tone of politics in those countries. Don’t bank on Poloz’s help with auto tariffs

In the course of announcing another increase in the key borrowing rate last week, to 1.5 per cent — the fourth rate hike over the past 12 months — Bank of Canada Governor Stephen Poloz said the central bank won’t be rushing to comfort Canadians hit by anticipated U.S. tariffs on Canadian autos and auto parts. Poloz has accomplished two important things here. He has signalled to the world that Canada has an iron will in controlling inflation. That’s a reassurance to global investors that Canada will remain an oasis of price and cost stability, and it also puts a floor under the loonie as a currency that will hold its value.

And Poloz has told Ottawa that comforting Canadians and Canadian communities hit in the solar plexus by a U.S. attack on our auto sector is Ottawa’s job, not his.

A less hawkish central banker would react to that calamity by returning to the easy money central bank policy of the Great Recession years.

But Poloz won’t be doing that and is telling the Trudeau government that it will have to use its fiscal policy instruments to comfort the afflicted.

The prime minister and Bill Morneau, his finance minister, have been mum about whatever measures they have in mind for protecting Canadians in an auto sector that accounts for fully 1 per cent of Canadian GDP.

But if they hadn’t put their minds to it by last week, Morneau and Justin Trudeau are now on notice that tax breaks, subsidies and other fiscal assistance for workers, communities and companies in distress will be the only tools available to cushion the blow and not relief from rising interest rates.

Poloz has signalled to the world that Canada has an iron will in controlling inflation. That’s a reassurance to global investors