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

File photo
A man walks into a Cargill meat processing factory. THE CANADIAN PRESS/Graham Hughes
Alberta meat plant, site of COVID-19 outbreak last year, to get vaccination clinics

Nearly half of the 2,200 workers at the Cargill facility contracted the novel coronavirus and two employees died last April

Grand Chief Wilton Littlechild, left, Grand Chief Arthur Noskey, centre and Chief Aaron Young during a meeting with First Nations Chiefs and Grand Chiefs in Edmonton. THE CANADIAN PRESS/Jason Franson
Alberta must retract Forest Act before it becomes law: Treaty 8 grand chief

‘We are asking (the government) to pull this back and consult with us,’ says Arthur Noskey of Treaty 8 First Nations

Alberta’s largest school board says it will not use the United Conservative government’s draft elementary school curriculum pilot this fall. (Ben Hohenstatt/Juneau Empire)
Calgary school board says no to United Conservative draft school curriculum

Other school boards including Edmonton Public, Edmonton Catholic, Elk Island Public, Wild Rose, Medicine Hat Public, Medicine Hat Catholic and Lethbridge Public have also rejected it

Alberta reported its highest number of daily COVID-19 cases since December 16 on Friday. (NIAID-RML via AP)
Alberta reports 1,521 additional COVID-19 cases, 674 new variant cases

Daily case total the highest since mid-December

A cross made out of hockey sticks at a makeshift memorial is silhouetted against the setting sun at the intersection of a fatal bus crash near Tisdale, Sask., on Monday, April, 9, 2018. A virtual tribute is planned to mark the third anniversary of the Humboldt Broncos bus crash. THE CANADIAN PRESS/Jonathan Hayward
VIDEO: Humboldt Broncos team to be honoured on third anniversary of fatal bus crash

16 people died and 13 were injured when a semi-trailer ran a stop sign into the path of the hockey team’s bus

Chief Public Health Officer Theresa Tam speaks during a technical briefing on the COVID pandemic in Canada, Friday, January 15, 2021 in Ottawa. THE CANADIAN PRESS/Adrian Wyld
Canada’s ICUs see near-record of COVID-19 patients last week as variant cases double

Last week, Canadian hospitals treated an average of 2,500 patients with COVID-19, daily, up 7% from the previous week

Vancouver’s park board general manager issued a new order Friday restricting tents and other temporary structures from being set up in Strathcona Park after April 30, 2021. THE CANADIAN PRESS/Jonathan Hayward
Vancouver park board issues order to restrict tents in Strathcona Park

The order issued Friday restricted tents and other temporary structures from being set up after April 30

Stettler’s own Renegade Station is kicking off the spring season with a brand new single - to be released April 9th. (Photo submitted)
A brand new single is on the way from Stettler-based band Renegade Station

Free Free Free hits all streaming platforms on April 9th

Foreign Affairs Minister Marc Garneau waits for a virtual meeting to begin with US Secretary of State Antony Blinken in Ottawa, Friday February 26, 2021. THE CANADIAN PRESS/Adrian Wyld
Ottawa mulls exempting more workers from Canada-U.S. border shutdown: Garneau

Canada-U.S. border has been closed to people travelling for vacations and other non-essential visits since March 2020

A worker smooths concrete at a construction site in Toronto on January 16, 2020. THE CANADIAN PRESS/Cole Burston
Economy adds 303,000 jobs in March, unemployment rate falls: Statistics Canada

Figure released this morning outpaced the 259,000 gain seen in February

FILE - This file photo dated July 10, 1947 shows the official photograph of Britain’s Princess Elizabeth and her fiance, Lieut. Philip Mountbatten in London. Buckingham Palace says Prince Philip, husband of Queen Elizabeth II, has died aged 99. (AP Photo/File)
Prince Philip, husband of Queen Elizabeth II, dies at 99

Philip spent a month in hospital earlier this year before being released on March 16

Campbell River city council will continue its 2020 policy of waiving late fees and NSFs. (Mirror File photo)
53% of Canadians teetering the brink of insolvency: survey

A majority of Canadians admit they’re just $200 away from not being able to pay their monthly bills

Alberta Premier Jason Kenney listens as the 2021 budget is delivered in Edmonton Alta, on Thursday, Feb. 25, 2021. THE CANADIAN PRESS/Jason Franson
Kenney faces criticism from doctors, his own caucus, over new COVID-19 health rules

Alberta now has more than 10,000 active cases, about 43 per cent are variants

Most Read