OAKVILLE, Ont. -- Canadian coffee and doughnut quick-service restaurant chain Tim Hortons Inc. is mounting another expansion push into the United States, this time using self-service kiosks, after disclosing a planned change in its top management and strong quarterly results, reported Nation's Restaurant News.
In reporting an 11.5% rise in net income on a 10.5% rise in revenues for the fourth quarter ended December 27, the one-time Wendy's International Inc. unit said it plans to use the kiosks to "increase its U.S. brand exposure and create another channel of potential growth."
Currently 15 [image-nocss] of the devices, which dispense hot and cold beverages and a selection of doughnuts and pastries, are in place at gas stations and convenience stores. About 140 kiosks currently operate in convenience settings in Ireland and the United Kingdom, said the report.
Hortons said it plans to develop between 90 and 110 new outlets this year within the United States, after opening 68 units last year. It plans to open 120 to 140 new stores in Canada, after adding 130 new stores last year.
For the fourth quarter, Hortons' U.S. branches posted a 4.2% increase in same-store sales, compared with an 8.3% jump for the same period a year earlier. Hortons said its U.S. operations generated a shortfall for the quarter—a loss of about $509,000—which reflected "ongoing investment in developing U.S. markets."
"I see this as a great opportunity for the Tim Hortons chain to grow," president and CEO Paul House said on a conference call, added a Reuters report. "Real estate costs are coming off, hopefully building costs will follow, and there's lots of people around that have been, especially in the U.S., displaced out of jobs, that are looking for franchises."
House has been appointed full-time executive chairman, and Don Schroeder has been appointed president and CEO as his successor, both effective March 1, 2008.
Revenue rose 10.5% to $515.4 million (Canadian) as it promoted such products as chicken fajita wraps, cream of broccoli soup and pumpkin spice smoothies. Quarterly same-store sales grew 3.4% in Canada and 4.2% in the United States.
About 2% of Canadian growth was due to higher prices, compared with less than a 0.5% in the United States. Gains were crimped by heavy snow in key markets and a bigger promotion of its TimCard, a reloadable electronic payment system, rather than Christmas merchandise.
A new breakfast sandwich gave a big lift to year-ago growth of 9.3% in Canada and 8.3% in the United States.
Tim Hortons is the fourth largest publicly-traded quick service restaurant chain in North America based on market capitalization, and the largest in Canada. Its menu includes coffee and donuts, premium coffees, flavored cappuccinos, specialty teas, home-style soups, fresh sandwiches and fresh baked goods. As of Dec. 30, 2007, Tim Hortons had 3,221 restaurants system wide, including 2,823 in Canada and 398 in the United States.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.