Tim Hortons says it will revamp its iconic Roll Up the Rim contest after the company reported weak sales in the first quarter of the year.
Jose Cil, chief executive of Tim Hortons’ parent company Restaurant Brands International, said on a conference call with analysts on Monday that a weak Roll Up the Rim campaign contributed to a comparable sales decline of 0.6 per cent at the coffee chain in the first three months ending March 31.
“We still believe the 33-year-old Roll Up the Rim program is a valuable and iconic platform for Tims. It has very high awareness,” Cil said.
“However, it’s become clear to us that it needs a modern and fresh approach to engage our guests in a stronger way going forward. The Tims team is working on new plans to drive a successful reboot of the program next year, including seamless digital integration.”
The company had initially expanded the Roll Up the Rim program after seeing a “decline in effectiveness” last year, adding more prizes in the hopes of ramping up excitement about the contest. But the plan didn’t manage to bring in more customers.
“Unfortunately, this additional investment did not drive the incremental engagement we expected,” Cil said, adding that the additional giveaways resulted in a drag on comparable sales of half a point in the first quarter of 2019.
While Cil did not provide details about exactly how the “reboot” of the program would look, he said there is “opportunity to integrate this with digital.”
This year, the Roll Up the Rim contest had faced some backlash after three young Canadians launched a petition asking Tim Hortons to invest in compostable or recyclable paper cups.
Cil also said that severe weather across the country weighed on results at Tim Hortons in the first quarter, dragging down comparable sales by approximately 1 per cent.
“I hate using weather as an excuse,” Cil told analysts. “But given the nature of our high traffic and frequency business in Canada, the severity of the weather impacting the experience in the first quarter, we felt it was necessary to disclose.”
At the same time, the coffee chain has seen early success in the loyalty program space. Cil said 20 per cent of the Canadian population has used the loyalty program in the first five weeks since it launched, with almost half of daily transactions now using the loyalty card.
System-wide sales at Tim Hortons, which reports its financial results in U.S. dollars, fell $61 million to $1.55 billion when compared to the same quarter last year. Net income at RBI, which also includes fast-food chains Burger King and Popeyes, was $246 million, a decrease from $279 million the same time last year.