(Toronto) Long associated with morning coffee runs and lunch, coffee chain Tim Hortons now wants to extend its dominance to the second half of the day.
“We are very excited about the opportunities available in the afternoon meals sector, which allows us to serve more Canadians for lunch, afternoon and dinner,” said Friday the president of Tim Hortons Canada and United States, Axel Schwan, during an interview.
“It’s a big priority for us. »
The restaurant brand owned by parent company Restaurant Brands International has, until now, focused on strengthening its end-of-day business by expanding its food offerings beyond lunch sandwiches, coffee and donuts.
Tim Hortons only started selling all-day breakfast items a few years ago, but now offers rice, chicken and vegetable bowls, and has dabbled in burgers and pizza.
The chain recently introduced twists, a flaky, buttery pastry, and “dream cookies,” which are topped with ingredients like pecans, marshmallows, Reese’s and M&M’s.
“(These pastries) have been a big hit with our (customers),” Schwan observed.
“We’ve been serving millions of these cookies every month since June when we launched them. »
Tim Hortons reported that sales at its stores open at least a year increased 6.8% in the third quarter, compared to 9.8% a year earlier.
But becoming an afternoon heavyweight in the fast-food industry comes with its challenges. Competitors such as McDonald’s and Wendy’s have gained huge shares of dinner and afternoon snack sales, and these times of day also face competition from table service restaurants, not to mention people who eat at home.
At the same time, several economists and retailers have reported that consumers are more cost-conscious and increasingly bargain-hunting, as inflation, particularly in the food sector, remains high.
RBI’s head of corporate services, Duncan Fulton, sees these conditions as part of the very nature of the fast food industry.
“There will always be market dynamics that change,” he argued during the same interview as Mr. Schwan.
“And because we work in 100 countries around the world, we see many different, sometimes even opposing, dynamics in different parts of the world. »
Mr. Fulton’s remarks come the same day that RBI, which also owns Burger King, Popeyes Louisiana Kitchen and Firehouse Subs, warned of rising costs for raw materials, labor and Energy.
RBI highlighted that the war in Ukraine and the COVID-19 pandemic had triggered accelerating inflation, volatility in foreign exchange rates and rising interest rates, all of which could now be exacerbated by the conflict in the Middle East.
The company warned that geopolitical tensions could also adversely impact its business if the company and its franchisees are unable to adjust their prices sufficiently without harming consumer demand.
In a conference call with analysts Friday, RBI executives said they have yet to see any major changes in consumer behavior in Canada.
RBI executive chairman Patrick Doyle suspects the company’s channels will fare better than others because of its focus on value.
“They are not immune to the recession, but they are resilient to it,” he said.
Profits down, but revenues up
RBI on Friday posted a third-quarter profit of US$364 million, down from US$530 million in the third quarter of last year.
The decrease observed in the quarter ended September 30 was mainly attributable to tax expenses and an increase in equity compensation, non-cash incentive compensation expenses and interest expenses, the company explained.
Restaurant Brands also noted that its revenues increased to US$1.84 billion from US$1.73 billion a year earlier.
RBI shares lost $2.30, or 2.4%, on Friday to close at $92.68 on the Toronto Stock Exchange.
In recent months, RBI has worked to accelerate sales growth and improve profitability for Burger King’s U.S. franchisees. It will spend more than 400 million US dollars on advertising, renovations, restaurant technology and kitchen equipment.
At Popeyes, the focus has been on simplifying kitchens to speed up order fulfillment and drive employee retention.