Canada markets open in 1 hour 23 minutes

Tim Hortons begins reopening dining rooms as sales recover

"Glace Bay, Nova Scotia Canada - August 2, 2011: A line up of vehicles waiting to be served at a local Tim Hortons coffee shop in Glaced Bay, Nova Scotia, Canada"

Tim Hortons has reopened about 500 dining rooms in Canada, a company executive said Friday, as lockdown restrictions ease in some areas of the country.

The coffee and doughnut chain has also seen comparable sales slightly recover from declines of more than 40 per cent in March to a drop of approximately mid-20 per cent as of May 22, thanks to growing drive-thru and delivery demand.

Duncan Fulton, the chief corporate officer at Tim’s parent company Restaurant Brands International (QSR), said in an interview Friday that the company has reopened approximately 500 sit-down dining rooms in British Columbia, Alberta and New Brunswick over the last week.

The reopenings mark the first incremental step towards a new normal at Tim Hortons dining rooms, which accounted for approximately 40 per cent of the coffee chain’s sales during pre-pandemic times.

Fulton said RBI, which also operates the Burger King and Popeyes chains, has been able to take lessons learned from previous re-openings that have already taken place in China. Physical distancing rules are being enforced for lineups as well as seating, with a reduced number of tabletops open for guests. Tables and chairs are being sanitized after each use. All staff members have temperatures checked before the start of every shift.

“It’s a new routine for customers and it’s going well,” Fulton said.

“Everyone is very understanding of the situation. We want to make sure that our dining rooms are open and welcoming, and that people people safe to be able to sit down and have coffee and breakfast with a friend.”

As some reopenings begin, Tim Hortons is also seeing improvement in sales, although its recovery still lags behind the boosts seen at Burger King and Popeyes.

Speaking to the Bernstein Strategic Decisions Conference on Thursday, RBI’s chief executive Jose Cil said the recovery at Tim Hortons was in part due to rapid growth of delivery demand. Before the pandemic, Tim Horton’s had approximately 250 restaurants signed up for delivery with Skip the Dishes. Today, more than 1,100 locations across the country offer delivery through Skip the Dishes and Uber Eats.

“It’s a really strong move and gives us penetration and coverage for delivery in Canada at numbers greater than almost any other delivery business in the country,” Cil said.

“We're well positioned at Tim's in Canada to be able to not just get back to where we were, but to be able to capture share in the market because of our ubiquity in the market from a penetration standpoint, the different formats that we have available and the different service modes that we have available.”

Fulton said he expects that “a very large majority” of Tim Hortons restaurants will continue offering delivery after dining rooms open.

“I think most owners have recognized that this is entirely incremental. Even with higher fees, they would rather have the order than not,” he said.

Sales at Tim Hortons have been a weak spot amid otherwise stellar results for RBI over the past year. In February, the company had announced a “back to basics” plan that refocused on its coffee, baked goods and breakfast business after a year that saw dozens of promotions and product launches contribute to lagging sales.

According to company disclosures released on Thursday, Burger King’s comparable sales were down in the mid-single digits as of the third full week of May, an improvement from the low-thirties seen in the last two weeks of March. Popeyes, meanwhile, is thriving, with sales up in the low forties in May compared to flat in March.

Download the Yahoo Finance app, available for Apple and Android and sign up for the Yahoo Finance Canada Weekly Brief.