A woman passes by a Tim Hortons restaurant in Toronto on March 6, 2020. Restaurant Brands International Inc. reported its fourth-quarter profit and revenue fell compared with a year ago. THE CANADIAN PRESS/Cole Burston

A woman passes by a Tim Hortons restaurant in Toronto on March 6, 2020. Restaurant Brands International Inc. reported its fourth-quarter profit and revenue fell compared with a year ago. THE CANADIAN PRESS/Cole Burston

In bid to win market share, Tim Hortons modernizing drive-thrus, upgrading menu items

Company has invested heavily in upgrading core offerings at Tim Hortons as part of its ‘back to basics’ plan

Tim Hortons is modernizing its drive-thru experience and improving its core menu items in a bid to win over customers as the economy starts to reopen, executives with the restaurant’s parent company say.

The focus on positioning the coffee chain to grow during the post-pandemic recovery comes as the ongoing disruption to daily routines caused by COVID-19 restrictions continues to hurt sales.

Restaurant Brands International Inc., which operates Tim Hortons, Burger King and Popeyes, reported weaker fourth-quarter profits and revenues compared with a year ago, with sales across the three brands down 8.6 per cent.

Tim Hortons saw same-store sales slip even further, down 11 per cent, as everyday habits like stopping for a coffee and bagel before work or a hot chocolate after hockey practice continued to be curtailed by lockdowns and curfews.

“Routines remain on hold for many of our guests,” Restaurant Brands CEO Jose Cil told analysts during a conference call. “Breakfast remains significantly impacted at Tims Canada.”

But the company has invested heavily in upgrading the core offerings at Tim Hortons as part of its “back to basics” plan.

The coffee chain has introduced fresh coffee brewers, new water filters, a new dark roast coffee, fresh eggs, new lunch sandwiches and dairy alternatives.

READ MORE: Canadians launch petition urging Tim Hortons to remove freshly cracked eggs from breakfast sandwiches

Restaurant Brands is also rolling out more digital drive-thru menu boards, currently installed in about half the Tim Hortons locations in Canada that have a drive-thru.

“We can’t control the virus and we can’t control the lockdown but we certainly can control the experience that our franchisees or teams and our guests are having in the business every day,” Cil said.

“We feel that we’re well positioned when things begin to open up to be able to capture more share and continue to grow the business in Canada for the long term.”

The digital menu boards open up new ways the coffee chain can improve customer service as they use customer information to determine what to display, Restaurant Brands chief corporate officer Duncan Fulton said.

The menus can integrate the chain’s loyalty program and add payment capabilities, which make drive-thru service more personalized and faster, he said.

“It’s giving us a really powerful marketing tool to be able to better tailor offers for our guests,” Fulton said in an interview, noting that one-third of adult Canadians use the Tim Hortons loyalty program.

“We’ve also learned a lot in terms of how we can simplify those digital menu boards to really target and tailor the messages that you see based on your previous shopping habits.”

Restaurant Brands chief operating officer Josh Kobza told analysts that digital sales at Tim Hortons represented 23 per cent of total sales in Canada during the quarter – more than double what it was a year ago.

In addition, Tim Hortons delivery sales are up about 14 times, he said.

“This continued momentum reinforces our belief that the wave of digital adoption we’ve seen in the wake of the pandemic has represented a step change in terms of how our guests interact with our brands and how we serve them going forward,” he said during the call.

Indeed, the coffee chain is banking on its modernized drive-thru menus and improvements to its classic food and beverage items to help it win market share once the economy reopens.

“We know that billions of dollars will move back to the restaurant sector as all the stay at home orders lift and as we get into vaccination,” Fulton said.

“We strongly believe that there is no restaurant in the country that is better positioned to come out of COVID than Tim Hortons.”

Yet even as sales declined in the three months that ended Dec. 31, Cil said there were early signs of recovery.

“Our December exit rate was high single-digit negative, which is the best performance we’ve seen since the onset of COVID,” he told analysts.

“Obviously we’re not doing cartwheels on that but we are encouraged by the performance and the improvements.”

The coffee chain’s drive-thru business has also performed better throughout the quarter, he said, with sales roughly flat compared to the same quarter last year.

RBI raised its quarterly dividend by a penny to 53 cents US per share.

The increased payment to shareholders came as Restaurant Brands, which keeps its books in U.S. dollars, reported net income attributable to common shareholders and non-controlling interests of US$138 million or 30 cents per diluted share for the quarter ended Dec. 31.

The result compared with a profit of US$255 million or 54 cents per share a year earlier.

Revenue totalled US$1.36 billion, down from US$1.48 billion.

On an adjusted basis, Restaurant Brands said it earned U$247 million or 53 cents per share for the quarter, down from an adjusted profit of US$351 million or 75 cents per share a year earlier.

Brett Bundale, The Canadian Press


Like us on Facebook and follow us on Twitter.

Want to support local journalism during the pandemic? Make a donation here.

Tim Hortons

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A dose of COVID-19 vaccine is prepared at a vaccination clinic in Montreal’s Olympic Stadium on Tuesday, Feb. 23, 2021. THE CANADIAN PRESS/Paul Chiasson
39 new cases of COVID-19 in Interior Health region

The total number of cases in the region since the pandemic began is now at 7,334

Arrow Lakes Caribou Society said the new caribou pen near the Nakusp Hotsprings is close to completion. (Submitted)
Maternity caribou pen near Nakusp inches closer to fruition

While Nakusp recently approved the project’s lease, caribou captures are delayed due to COVID-19

The Skinny Genes Foundation is raising awareness and funds for a rare genetic disorder that claimed both his father and uncle.
NHL players, local businesses help Kootenay man raise funds and awareness for rare genetic disease

Signed NHL jerseys and local business donations up for auction in Skinny Genes Foundation fundraiser

Remi Drolet
Rossland skier competes at World Nordic ski championship

Remi Drolet was selected to Team Canada and will race at the 2021 FIS World Nordic Ski Championships

Sylvain Fabi, Canada’s chief negotiator for the Columbia River Treaty, joined a number of government and Indigenous government stakeholders for a virtual town hall on Feb. 24, 2021, to update the state of the Columbia River Treaty negotiations. Trevor Crawley photo/Zoom screenshot
Indigenous input key to Columbia River Treaty negotiations

Ecosystem function included in negotiations along with flood management and power generation priorities

Dr. Bonnie Henry leaves the podium after talking about the next steps in B.C.’s COVID-19 Immunization Plan during a press conference at Legislature in Victoria, B.C., on Friday, January 22, 2021. THE CANADIAN PRESS/Chad Hipolito
COVID: 589 new cases in B.C., and 7 new deaths

No new outbreaks being reported Feb. 26

Staff from the Marine Mammal Rescue Centre, passersby, RCMP and Nanaimo Fire Rescue carried a sick 300-kilogram steller sea lion up the steep bluff at Invermere Beach in north Nanaimo in an attempt to save the animal’s life Thursday. (Photo courtesy Marine Mammal Rescue Centre)
300-kilogram sea lion muscled up from B.C. beach in rescue attempt

Animal dies despite efforts of Nanaimo marine mammal rescue team, emergency personnel and bystanders

Gina Adams as she works on her latest piece titled ‘Undying Love’. (Submitted photo)
‘Toothless’ the kitty inspires B.C. wood carver to break out the chainsaw

Inspired by plight of a toothless cat, Gina Adams offers proceeds from her artwork to help animals

B.C. Finance Minister Selina Robinson presents bill to delay B.C.’s budget as late as April 30, and allow further spending before that, B.C. legislature, Dec. 8, 2020. (Hansard TV)
How big is B.C.’s COVID-19 deficit? We’ll find out April 20

More borrowing expected as pandemic enters second year

The first of 11 Dash 8 Q400 aircraft's have arrived in Abbotsford. Conair Group Inc. will soon transform them into firefighting airtankers. (Submitted)
Abbotsford’s Conair begins airtanker transformation

Aerial firefighting company creating Q400AT airtanker in advance of local forest fire season

The Canada Revenue Agency says there were 32 tax fraud convictions across the country between April 2019 and March 2020. (Pixabay)
Vancouver man sentenced to 29 months, fined $645K for tax evasion, forgery

Michael Sholz reportedly forged documents to support ineligible tax credits linked to homeownership

Then-Liberal leader Andrew Wilkinson looks on as MLA Shirley Bond answers questions during a press conference at Legislature in Victoria. (Chad Hipolito / THE CANADIAN PRESS)
B.C. Liberal party to choose next leader in February 2022

Candidates have until Nov. 30 to declare whether they are running

After nearly 10 months of investigations, Mounties have made an arrest in the tripping of an elderly woman in Burnaby this past April. (RCMP handout)
VIDEO: Mounties charge suspect for tripping elderly woman near Metrotown in April

32-year-old Hayun Song is accused of causing bodily harm to an 84-year-old using her walker

British Columbia provincial health officer Dr. Bonnie Henry arrives to view the Murals of Gratitude exhibition in Vancouver, on Friday, July 3, 2020. THE CANADIAN PRESS/Darryl Dyck
Death threats mount against Dr. Bonnie Henry, sparking condemnation from Horgan, Dix

Henry has become a staple on televisions in homes across British Columbia since January 2020

Most Read