Tim Hortons sales in Canada surpass pre-pandemic levels for the first time

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Tim Hortons Canada sales exceeded pre-pandemic levels for the first time since the onset of COVID-19, parent company Restaurant Brands International Inc. reported Thursday, as the easing of pandemic restrictions paved the way when customers return to the iconic chain.

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Globally, Tim Hortons saw comparable sales increase 16.3% in the second quarter, including 14.2% growth in Canada. Its total revenue was $968 million, up from $831 million in the same period last year.

“It’s clear that the groundwork we laid during the first phase of our ‘Back to Basics’ plan is paying off with customers returning to Tim’s following the easing of restrictions at the end of the first quarter.” , Stephen Lichtner, head of investor relations at Restaurant Brands International, said during Thursday’s earnings call.

In an interview, RBI CEO Duncan Fulton described Tim Hortons’ pan-Canadian sales growth as “quite exceptional” and said the company has seen an increase in mobility in the day-to-day operations of its restaurants.

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“There’s no doubt that people returning to some form of pre-pandemic routine are definitely part of that growth,” Fulton said, adding that this return traffic, combined with the brand’s deliberate decision to increase its market share in espresso and cold drinks, led the growth.

Executives said they still expect a surge in traffic growth as many cities in Canada have yet to see workers return to the office full-time.

“More offices reopened in the second quarter…but downtown Toronto is just getting back to work,” they told analysts on the earnings call. “Mobility in our downtown neighborhoods is still ongoing and that gives us confidence that if it returns to pre-pandemic levels, there will need to be a tailwind in the business as well.”

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Hybrid work arrangements, in which Canadians come to the office on some days and work from home on other days, “certainly affect” the morning part of the business, Fulton said. The COO noted that this is also why the company made significant menu changes to lunch and dinner entrees, which were a source of their growth in the quarter.

The results for the three-month period ended June 30 come amid an investigation by Canadian privacy agencies that found Tim Hortons breached privacy laws using its mobile app to collect “very personal” information about its customers without their consent.

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The watchdog findings, released in early June, called on Tim Hortons for a “massive invasion” of privacy. The Tim Hortons mobile app survey was launched in 2020 following a report by the Financial Post.

Last week, Tim Hortons said it reached a proposed settlement in several class action lawsuits related to data collection. The settlement would see the restaurant offer a free coffee and donut to affected users.

Fulton said the results did not appear to have a negative impact on the business and the app remains “extremely popular” for Canadians, with millions of people a month using it when ordering.

“About a third of all our sales in Canada were made through a digital channel,” he said.

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Tim Hortons said it no longer uses the location-based technology in question and is complying with investigators’ requests to delete all offending data and create a plan to ensure its app complies with privacy laws at the coming.

Restaurant Brands International, which also includes Burger King, Popeyes Louisiana Kitchen and Firehouse Sub, saw global sales increase 14% in the second quarter, up nearly $1 billion year-on-year to more than $10 billion .

Overall, the company reported net income of US$346 million in the quarter, compared to US$391 million a year ago.

Diluted earnings were US$0.76 per share compared to US$0.84 in the prior year quarter.

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