The Canadian coffee chain is seeking to lift afternoon sales with food and cold beverages amid falling revenues and further store closures in North America
Tim Hortons is seeking to boost afternoon sales with new food and cold beverages ranges | Photo credit: Tim Hortons
Tims Hortons will focus on boosting afternoon trade with extended food and cold beverage menus after posting lower quarter-on-quarter sales and continued store closures in North America.
Parent company Restaurant Brands International (RBI) said Tim Hortons achieved 7.8% year-on-year system-wide sales growth across North America in the three months ending 31 March 2024 to reach $1.7bn.
However, the coffee chain’s first quarter sales across Canada and the US were 7% lower than the previous quarter when they exceeded $1.8bn. Adjusted operating income also fell 3% quarter-on-quarter from $231m to $224m.
Additionally, Tim Hortons closed net 20 stores in North America during the quarter to operate 4,505 outlets, marking an eighth consecutive quarter of store closures for the coffee chain in Canada.
RBI no longer issues individual financial reports for Canada and the US and now consolidates the markets as a single North America segment. Tim Hortons operated 3,894 stores in Canada and 631 sites in the US in the final quarter of 2023 and in February 2024 outlined a goal of reaching 1,000 stores across the US by 2028.
During an earnings call with investors, CEO Joshua Kobza said Tim Hortons was currently seeking to boost afternoon sales by introducing new food items, including flatbread pizzas and savoury pastries. The coffee chain has also widened its cold coffee and soft beverage range and reported its cold category achieved 12% year-on-year sales growth during the quarter.
RBI expects to grow Tim Hortons’ market share in the afternoon daypart to double digits within the next year.
Tim Hortons is typically one of RBI’s strongest performers and is the group’s second largest brand by sales and outlets in North America behind Burger King – which ended the first quarter with $2.7bn sales and 7,139 restaurants.
RBI, which also operates the Popeyes and Firehouse Subs fast-food chains, achieved 8% group sales growth during the quarter to reach $10.5bn. It is seeking to scale its foodservice portfolio from 31,113 outlets to 40,000 and generate $60bn in group sales by 2029.