Canada’s recent surge in population growth is providing an opportunity for Tim Hortons to expand, with the company gearing up to open more locations in Western Canada starting next year.
Joshua Kobza, chief executive of Tim Hortons’ parent company Restaurant Brands International (QSR.TO)(QSR), said on a conference call with analysts on Tuesday that the company plans to open new locations, particularly in the western provinces, to serve Canada’s growing population.
“There’s been a lot of population growth in Canada, which means there’s opportunity for more Tims, and there are particular pockets that the team has been going after,” he said on Tuesday.
“I think you’ll start to see some benefit from that next year, in places like Western Canada, where we just have lower density of units than we have in places like Ontario. We’ll start to see some of those units get opened as we get into 2025.”
With Tim Hortons set to open new locations, the coffee and doughnut chain continues to be a bright spot for RBI, which saw sales slump and fall below analyst expectations in the third quarter amid what Kobza calls “difficult macro and competitive environments.”
While demand waned at the three other chains RBI operates – Burger King, Popeyes, and Firehouse Subs – Tim Hortons saw traffic growth drive higher sales. Comparable sales, a key metric in the retail industry that excludes recently opened locations, increased 2.3 per cent at Tim Hortons in the third quarter. RBI’s overall comparable sales were up 0.3 per cent, thanks largely to Tim Hortons. Meanwhile, Burger King saw comparable sales drop 0.7 per cent, while Popeyes and Firehouse Subs fell four per cent and 4.8 per cent, respectively.
Kobza says Tim Hortons “remains the No. 1 value-for-money in Canada and is one of the only major (quick service restaurant) brands in the market with positive traffic growth in year-to-date.”
“Tims’ No. 1 restaurant brand-love and No. 1 value positioning allow us to maintain our leading market share in coffee, baked goods and breakfast sandwiches and wraps,” Kobza said, noting that an offer for $3 breakfast sandwich with any size coffee purchase helped boost traffic and gross profits at restaurants. He also says the company continues to improve in the P.M. food category, a key focus for Tims recently, thanks largely to the launch of its flatbread pizzas.
“Flatbread pizzas are giving Canadians another reason to visit their local Tims, boosting restaurant traffic during historically slower day-parts and driving higher average checks,” Kobza said.