More than seven million people are using the Tims Rewards loyalty program every month, while the new Beyond Meat breakfast sandwich has also proven a hit with customers, said the chain’s parent company Restaurant Brands International (RBI), in its second quarter earnings call Friday.
Same store sales for Tim Hortons were up slightly in the quarter, growing 0.5% system-wide and 0.7% in Canada. Comparable sales were flat during the same period last year. Total revenue in the quarter grew to $842 million from $823 million a year ago.
The brand continues to execute against the “winning together” plan it introduced last year, said RBI’s chief executive officer, Jose Cil. The program was launched following a spate of negative press and criticism from unhappy franchisees.
The coffee chain is still grappling with some trouble spots however, with Cil noting that it experienced “softness” with its lunch menu, particularly around sandwiches and wraps. The chain’s cold drinks line-up also under-performed in May and June compared to the same period last year, which Cil said was “one of our strongest quarters for cold beverages in recent memory.”
The Oreo Ice Capp, one of a number of LTO cold drinks introduced in May, failed to catch on with consumers, he said. However, the chain has witnessed “positive guest response” to recent cold beverage innovations, including a Jolly Rancher Slushy introduced last month. “We’re excited to continue building on these beverage platforms with new and exciting options for our guests,” said Cil.
The company is working to enhance what Cil called its “coffee leadership” position in Canada, noting that it sells eight of every 10 cups purchased in the country each day. “We know we’re already way in front, but we need to continue to drive that with great consistency,” he said.
Customers are also happy with the chain’s new spill-proof lids—designed by Vancouver’s One Twenty Three West using 100% recyclable materials. “We’ve tested them with millions of guests, and they’re getting overwhelmingly positive reviews,” said Cil.
The introduction of Beyond Meat breakfast sausage sandwich (as well as last month’s first-ever foray into burgers with a Beyond Meat product) is also on-trend and helping Tims attract younger customers, said Cil.
The Tims Rewards program, which gives customers a free coffee, tea or baked good after every seven visits, has also proven popular with customers since its March introduction. Cil said that approximately seven million people using the program each month.
“After just a few short months, we’re really pleased with the level of engagement from our guests, and believe we’re establishing an exciting platform that we can use to drive [an] improved guest experience and sales growth,” he said.
While acknowledging that Tims Rewards’ impact on same store sales has been neutral, Cil said that it is helping drive more customer traffic and that it “continues to really amaze us,” with its long-term potential.
“Our next step is to use the powerful insights we’re gathering from program to offer our guests rewards and promotions tailored to their purchase interests,” he said. “We believe this will provide a solid basis… for driving incremental sales over our large customer base over time.”
Tim Hortons also continues to look to expand internationally, with a plan to open in Thailand, which Cil described as a “thriving coffee market.” Thailand would be the third Asian market for Tims, which recently opened its 14th restaurant in China.
“I”m confident in the team and the plans we have in place to drive the Tim Hortons brand in the second half of the year and beyond, both in Canada and around the world,” said Cil.