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Tim Hortons reopens 90% of locations as sales recover

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Winnipeg; Manitoba / Canada - October 8; 2019: Tim Hortons Store at Dugald Road.
(Getty Images)

Tim Hortons says its sales are gradually recovering as the coffee and doughnut chain reopens nearly all of its locations and customers begin returning to restaurants.

With 90 per cent of Tim Hortons locations now reopened, comparable sales have improved from down in the mid-40s as of mid-March to in the “negative high teens” as of last week, according to a letter released Monday by parent company Restaurant Brands International chief executive Jose Cil. The remaining Tim Hortons restaurants that have not reopened are located in malls, food courts, sporting complexes and other public facilities that remain closed.

However, the recovery at Tim Hortons lags those of the two other brands – Burger King and Popeyes – operated by RBI (QSR). Burger King’s comparable sales are flat compared to the same time last year, up from negative mid-30s as of mid-March. Cil cited strong drive-thru demand as a factor that helped boost Burger King sales. Popeyes, meanwhile, continues to thrive amid the pandemic, with comparable sales in the United States up in the high 20s, compared to being flat in mid-March.

Duncan Fulton, RBI’s chief corporate officer, said the slower pace of recovery at Tim Hortons is due in part to the impact the COVID-19 pandemic has had on breakfast demand, typically an area of strength for the chain.

“Morning routines have been far more disrupted than lunch and dinner time,” Fulton said in an interview.

“There’s been a continued demand for lunch and dinner, whether or not you’re in lockdown or whether you are at the office. But those morning routines – dropping in to get your coffee on the way to work, meeting friends on a Saturday and catching up – those have been completely disrupted.”

While the pandemic continues to disrupt regular routines, Tim Hortons has undertaken several initiatives to try to bring-in customers and revenue while its dining rooms – a driver of 40 per cent of its sales – remained closed.

The company has seen delivery demand across its chain grow as more restaurants signed up with third-party delivery services. Before the pandemic, Tim Hortons had approximately 250 restaurants signed up for delivery with Skip the Dishes. As of late May, approximately 1,100 locations across the country were offering delivery through Skip the Dishes and Uber Eats.

Tim Hortons also said it will open 1,000 patios across the country by early July, with the chain providing some funding to franchise owners to make the investment. Mike Hancock, Tim Hortons’ chief operating officer, said the company saw most demand for patio investments from franchise owners in Ontario.

Meanwhile, Canada’s Privacy Commissioner has launched an investigation into Tim Hortons’ mobile app over the use and collection of geolocation data. A spokesperson for the company said it will “fully cooperate” with the investigation and “we are confident we’ll be able to resolve this matter.”

RBI to address racial diversity

In the letter to shareholders, Cil also addressed racial diversity at RBI, which he said was “insufficient.”

“Starting immediately, I am making a commitment to ensure at least half of all final-round candidates interviewing for roles with our four RBI offices will be from groups that are demonstrably diverse, including race,” Cil wrote.

Fulton said the company will also review “all aspects” of its business when in comes to diversity, including its franchisee base and suppliers.

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