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Comparable sales at Tim Hortons fell by more than 40 per cent when the stay-at-home orders started in March. By May, those declines were around 25 per cent. Though they improved to “the negative mid-teens” by the end of July, that forward progress appears to have stalled this fall.
In the third quarter, which ended on Sept. 30, comparable sales were down by 13.7 per cent in Canada, and 12.5 per cent globally.
Bernstein senior research analyst Sara Senatore said in a note to investors on Tuesday that the comparable sales decline at Tim Hortons was in line with consensus expectations.
RBI’s Fulton said the company was “definitely seeing the impact of a very changed morning routine in Canada. Our drive-thru business is up double digits. Our delivery business is exploding. Those are all good things. But the reality is, we still have a large majority of the country that’s not going to work in the morning.”
We’re going to be really well positioned when normal routines return
Duncan Fulton
Despite the trouble at breakfast, Fulton said the back-to-basics strategy was still in full swing, pointing to changes to Tim Hortons’ breakfast sandwiches, which include new English muffins, biscuits and “crispier” bacon.
“We’re going to be really well positioned when normal routines return,” he said.
RBI, which also owns Popeyes Louisiana Kitchen, also announced a plan to upgrade more than 10,000 drive-thrus at Tim Hortons and Burger King locations by 2022.
The drive-thrus have become a major asset for restaurants during the pandemic, and are responsible for up to 90 per cent of sales at some Tim Hortons locations, Fulton said.
Among the planned changes are digitized menu boards that will eventually be able to provide personalized offers to customers enrolled in a particular chain’s loyalty program.
Improving drive-thrus was one of the key tenets of the 2020 back-to-basics plan, after drive-thru response times had been slowed by the onslaught of lunch experiments in previous years.
Fulton noted the chain has toned down its experiments — known as limited time offers — this year to around 25, down from roughly 70 last year.
