Weather, outdated contest cool Tims sales, CEO says
ALEKSANDRA SAGAN
Cold weather and an outdated roll-up-the-rim-to-win promotion slowed sales at Canadian Tim Hortons locations in its most recent quarter, said the CEO of the coffee chain’s parent company, prompting Restaurant Brands International Inc. to revamp the contest for next year.
Comparable store sales at Tim Hortons fell 0.6 per cent worldwide, and 0.4 per cent in Canada. The company only breaks out each chain’s home market for comparable sales figures.
“I hate using weather as an excuse,” said CEO Jose Cil, who has just served his first full quarter in the top post, during a conference call with investors Monday.
The company estimates severe winter weather during the quarter, which ended March 31, resulted in a drag of about one per cent on comparable sales. The weather woes started in the back half of January and lasted until the end of February, said Alex Macedo, Tim Hortons president, in an interview following the conference call, and impacted performance across Canada.
A weak roll-up-the-rim campaign also contributed to the negative figure. RBI started to see a decline in the program’s effectiveness last year, said Cil, and decided to expand the number of giveaways for 2019’s contest.
However, the added investment dragged down comparable sales about 0.5 per cent over the quarter. A team is working to reboot the program for next year that will include a seamless digital integration.
Comparable sales at the company’s two other chains were positive. Burger King comparable sales increased 2.2 per cent. Popeyes comparable sales increased 0.6 per cent.
Cil stressed the company does not believe that the negative comparable sales figure for Tim Hortons accurately reflects the underlying strength of the Canadian business and said the company expects its April comparable sales to come in at about 1.5 per cent.
He lauded the benefits of the Winning Together plan for providing the building blocks for longterm growth.
RBI launched the strategy in April 2018 amid negative attention with a group of dissident franchisees who filed lawsuits against the parent company.
An Ontario Superior Court of Justice judge approved Monday a proposed settlement in two class-action lawsuits by Canadian Tims franchisees against RBI.