Tim Hortons CEO faults the cold weather for slow quarter
The Canadian winter is to blame for Tim Hortons' recent weak sales according to its CEO.
While most people turn to Tim Hortons for piping hot drinks in the winter, the CEO of the coffee chain’s parent company isn’t happy about Canada’s prolonged cold weather.
Jose Cil, CEO of Restaurant Brands International Inc., blames cold weather and a disappointing roll-up-the-rim promotion for slow sales in its most recent quarter.
Comparable store sales at Tim Hortons fell 0.6 per cent worldwide, and 0.4 per cent in Canada.
Image: A Tim Hortons restaurant in Edmonton, Alta. Wikimedia
Severe winter weather from January to March is what may have attributed to a slug in sales this quarter, the company estimates.
The company says that severe weather dragged down same-store sales by about 1 per cent. Same store sales involve sales at locations that have been open for more than a year.
“I hate using weather as an excuse,” said Cil in an analyst conference call. “But given the nature of our high traffic and frequency business in Canada and the severity of the weather impact we experienced in the first quarter, we felt it was necessary to disclose in order to provide a more accurate picture of our underlying sales performance.”
In its first quarter that ended on March 31., RBI said its overall profit dropped in comparison to a year ago, as Tim Hortons same-store sales dropped.
An outdated ‘roll-up-the-rim’ campaign also added to an overall poor quarter.
According to Cil, the company decided to increase the number of giveaways for 2019’s contest after seeing a decline in engagement with the campaign last year.
The added number of giveaways did not generate the amount of buzz the company anticipated, and instead dragged down comparable sales about 0.5 per cent.
Tim Hortons is looking to reboot the ‘roll-up-the rim’ program next year with a “modern and fresh approach” involving more “seamless digital integration,” added Cil.
While comparable store sales at Tim Hortons fell, other food chains owned by RBI saw a rise in sales.
Burger King’s comparable sales increased by 2.2 per cent, while Popeyes’ rose by 0.6 per cent.