Tim Hortons: On the Road to Recovery?
| Case Code: BSTR647
Case Length: 16 Pages
Pub Date: 2023
Teaching Note: Available
Organization : Tim Hortons Inc.
Industry : Food & Beverage
Countries : Canada
Themes: Turnaround Strategy, Brand Revival, Crisis Management,Leadership and Change Management
Abstract Case Intro 1 Case Intro 2 Excerpts
In 2011, Tim Hortons entered the Middle East by striking a deal with UAE based Apparel Group . It opened outlets in Abu Dhabi, Dubai, and Fujairah in the UAE. In December 2011, Tim Hortons’ 4000th restaurant opened in Canada. By the end of 2013, there were 4,350 Tim Hortons stores globally (3,500 in Canada, 817 in the US, and 33 in the GCC region ). The brand expanded into Asia by opening two restaurants in the Philippines and a few outlets in the UK and Spain in 2017..
Tim Hortons began to face problems after it was acquired by 3G Capital in 2014. The private equity company was known for its aggressive cost cutting and sharp focus on operational efficiencies..
In fiscal 2019, comparable sales of Tim Hortons declined 1.5% globally and in Canada by 4.3%. Analysts said that the iconic brand was losing ground in its home country while the other two brands owned by RBI, Burger King and Popeyes Louisiana Kitchen, Inc..
In Q2 2021, Tim Hortons reported a strong rebound in sales with overall comparable sales growth of 27.6% globally and 27.4% in Canada, compared to a decline of 29.3% globally and 29.9% in Canada in the corresponding period of the previous year..
In addition to growing competition in the global restaurant space, Tim Hortons was likely to face some challenges going forward such as labor shortage, supply chain issues, and the need to expand globally, given the saturation in the Canadian fast food space..
Exhibit I: Top Fast-food Chains in Canada (March 2020) (Based on no of Store Locations)
Exhibit II: Operating Metrics of RBI (2018 to 2020)
Exhibit III: Income Statement of RBI (2018-2020)
Exhibit IV: Annual Revenue of Brands owned by RBI (2014- 2019)
Exhibit V: Tim Hortons Quarterly Sales (Q1 2016-Q2 2019)
Exhibit VI: Tim Hortons Loyalty/ Reward Program of 2020
Exhibit VII: Tim Hortons Same-Store Sales Growth Rate in Canada (Q1 2020-Q4 2021)
Exhibit VIII: Tim Hortons Annual Sales (2014-2021)
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