Tim Hortons 2.0

Timmies is about to get a little Burger King

Andrew Willis 5 June, 2020 | 1:39AM

 

 

Tim Horton’s parent company Restaurant Brands International (QSR) is under pressure to pull off a quick turnaround after its rough start to the year.

Sector strategist R.J. Hottovy says changes are coming after Tim Hortons posted uneven topline results that he attributes to lackluster menu innovation and expensive promotions. But with the brand still intact – in fact now taking up 25% of the entire quick-service restaurant marketplace – Restaurant Brands plans to use learnings from Burger King to help turn things around.

Changes include fewer, yet more impactful menu innovations, like improved coffee products, and more savoury breakfast sandwiches. We think it’s a good idea to come down from the sixty limited-time offers we saw in 2019.

RBI’s operational strategies and financial backing will play out with restaurant modernization efforts and improved outdoor menus to the tune of a hundred million dollars. The brand will also change its loyalty program from a visit-based to point-based system, making better use of technology to acquire and serve customers.

But as the company (and economy) recovers into a recession, we think acquiring customers could be a challenge. With no mentions of new value menu offerings, even with cost-cutting, we’ll see if people want more than coffee and doughnuts.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Restaurant Brands International Inc74.02 CAD-0.28
Restaurant Brands International Inc54.42 USD-0.93

About Author

Andrew Willis

Andrew Willis  Andrew Willis is Content Editor for Morningstar.ca

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