Coronavirus Pandemic Significantly Reduces Tim Hortons Sales While Canadians Stay Home


Tim Hortons struggles in a world without morning commuters, with daily sales during the coronavirus crisis down nearly 40% from the same period last year, according to the company’s first quarter revenue report. mother of the coffee chain, Restaurant Brands International Inc.

The epidemic hit Canada in March as Tim Hortons was in the midst of a company-wide “homecoming” push to end its confusing lunch and dinner experiences. dinner and refocus the chain on coffee, donuts and breakfast. But these routine morning offerings were the hardest hit by the shift to homework, said RBI.

“Everyone was hit hard in this breakfast business,” said RBI chief executive Jose Cil during a conference call with analysts on Friday, adding that Tim Hortons is now seeing more interest in lunch and dinner.

85% of Tim Hortons in Canada are still open, but only for driving and takeout services

As local governments consider easing foreclosure orders, the chain is working on ways to get people back to their old coffee buying habits when they return to work.

“It may take a little longer to fully open, but we will be there every step of the way, trying to bring this behavior back to where it was before COVID-19,” said Cil.

The plan to bring customers back is to make them comfortable by being clear about new store security measures. Tim Hortons has tested a number of new tactics in addition to its current regime of sneeze guards, employee temperature tests and ground markings for social distancing.

“You have to do more than just turn on the lights and say, ‘We’re back,'” said Duncan Fulton, chief executive officer of RBI.

The new measures include a “payment pole” so that driving service employees can pass a credit card machine without touching their hands in front of customers, as well as a new device for putting a lid on a cup of coffee. without the staff touching it.

“Think of an empty hockey puck,” said Fulton. “It’s the right diameter, so he’ll pick up the lid and then use it to push the cup down. “

The pandemic also complicated the already delicate process of reviewing the promotion of the chain’s signature, Roll Up the Rim, in March.

Tim Hortons planned to introduce a digital version of the contest to drive more customers to its mobile app while offering classic roll-up promotion on mugs. But in an effort to prevent the spread of the virus, the chain threw out 81 million cups of Roll Up the Rim brand and made the contest entirely digital.

The March epidemic forced Tim Hortons to close its dining rooms and focus entirely on driving and takeout. Of the 4,002 Tims branches in Canada, 85% are still open.

Veronica Henri / Toronto Sun / Postmedia Network

“Printing 81 million cups is one thing,” said Fulton. “Collecting them all and recycling them sustainably was an additional cost that we had not expected during the quarter. (He refused to say what the cost was.)

RBI said it was difficult to determine the impact of the competition on sales, as it intensified just as the closings began across Canada. The digital-only contest led to 1.5 million new app downloads.

In the first quarter of 2020, which ended March 31, Tim Hortons’ sales in Canada fell to US $ 1.19 billion, a decrease of $ 152 million from the same period a year. latest. Canadian chain posted 10.8% drop in same store sales – a common retail measure that gives a clearer view of year-over-year sales growth by ignoring sales from recently opened stores .

Tims was already struggling with similar sales declines before the crisis, but Cil said the chain started to see improvements in January and February.

The March epidemic forced the chain to shut down its dining rooms and focus entirely on driving and takeout. Of the 4,002 Tims sites in Canada, 85% are still open, Cil said.

To reduce franchise costs, the chain has also put on hold important improvement plans, including continued efforts to modernize brewing and drive-through equipment.

RBI, which also owns Burger King and Popeyes Louisiana Kitchen, said the most difficult part of the crisis seems to be subsiding.

The worst impact seems to have occurred in the last two weeks of March, when comparable daily sales fell “on average by a percentage in the mid-forties,” the company said. The drop in daily sales has since improved, hovering in the “thirties” in late April.

Financial Post

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