Tim Hortons sales improve as cold drinks like matcha attract younger customers
Tim Hortons is attracting younger Canadians to its restaurants with matcha and other cold drinks, helping grow sales at the coffee-and-doughnut chain despite a tough consumer environment.
The café chain’s owner, Restaurant Brands International Inc., said Thursday that same-store sales at Tim Hortons in Canada rose 1.8% in the third quarter, improving from the previous quarter but slowing from 4.2% growth a year earlier.
Josh Kobza, chief executive of Restaurant Brands, said Tim Hortons is finding new demand beyond its traditional morning coffee business.
"We're bringing in new guests that generally are younger, they skew more female, they come in the afternoon more often, and it's a little bit (of a) higher cheque," he said during an earnings call.
Kobza also said there was an unexpected pattern with sales of matcha drinks, which were introduced in July.
"Interesting thing we've realized with matcha, it peaks on the weekends, so it's a pretty different behavioural profile from our traditional hot-brewed coffee in the morning."
Cold beverage sales at Tim Hortons in Canada climbed nearly five% in the quarter, Restaurant Brands said.
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However, the coffee chain also faced pressure from cost-of-living concerns, with higher gasoline prices affecting some customer behaviour.
"We see a little bit of an impact from that ... in some of our drive-through and especially more rural markets," Kobza said. "If you think of the places where people have longer drive times, they're being mindful about the kilometres they're driving."
Restaurant Brands reported its third-quarter profit rose compared with a year ago, helped by strength at Burger King and Tim Hortons.
The company, which keeps its books in U.S. dollars, said it earned US$542 million in net income attributable to common shareholders for the quarter ended Sept. 30, up from US$315 million in the same quarter last year.
The profit amounted to US$1.54 per diluted share for the quarter, up from 96 cents US per diluted share a year earlier.
On an adjusted basis, Restaurant Brands said it earned US$1.10 per diluted share in its latest quarter, up from an adjusted profit of US$1.03 per diluted share in the same quarter last year.
Revenue for the company totalled US$2.53 billion, up from $2.45 billion a year ago, while system-wide sales totalled US$12.97 billion, up from US$12.28 billion a year earlier.
Comparable sales for the quarter were up 3.8%
