It’s been a couple of weeks full of change for Canadian mainstay Tim Hortons.
The cafe chain, owned by Restaurant Brands International (RBI), is currently undergoing a transformation after disappointing quarterly results.
Since reporting its financials on Feb. 10, RBI has announced the first of what are likely to be many changes at Tims, including revamping its relatively new rewards program and annual Roll Up the Rim contest.
Despite the recent action, many Canadians have said for years that the chain isn’t nearly as good as it once was.
Falling short of expectations
On Feb. 10, Restaurant Brands International chief executive Jose Cil told investors and analysts that comparable sales for Tim Hortons fell 4.3 per cent last quarter, while RBI’s other brands, Burger King and Popeyes, grew 2.8 per cent and 34.4 per cent respectively.
“We have not performed to expectations and have not properly put the strength of the Tim Hortons brand to work,” Cil said.
Cil attributed Tim Hortons’ shortcomings in 2019 to the company’s focus on innovation and promotional offers. Last year, Tims introduced 60 limited-time offers, which is three times the number of offers from 2018. This included forays into Beyond Meat burgers and breakfast sandwiches, and special edition doughnuts featuring everything from Cadbury Mini Eggs to Nutella.
Tims’ comparable sales figure was also affected by its new loyalty program, which awarded a free beverage or baked good to members after every eighth purchase. If customers used the Tim Hortons app, they could choose to bank the reward to use on a future visit, but if they used their physical card, it would automatically be applied to their purchase. 7.5 million customers signed up for the Tim Rewards program, but it didn’t necessarily translate into new business for the stores.
For years, many Canadians have complained about the quality of Tim Hortons — from the products, to the service, and especially about the coffee. Whether in Yahoo Canada comment threads or on social media, Canadians are vocal about what they think should change about Tims.
Improve the coffee
Get 100% private Canadian ownership
“‘Back to basics?’ Top idea there Tim's. I strongly suggest that you start by making Tim's a CANADIAN Company again by unceremoniously turfing 3G Capital which owns RBI, a Brazilian Company, not a proud CANADIAN COMPANY.” — Hector, Yahoo Finance Canada commenter
Hey @TimHortons your sales didn't decline because of the rewards system, your sales are declining because Canadians are extremely disappointed with the direction of the company after the 3G Capital buyout. Food sucks, coffee sucks, donuts suck. Turned a national icon into a joke.— TCGAddictionCA (@ca_tcg) February 11, 2020
Bake from scratch in stores
“People go to gourmet donut shops now, if Tims is going to stick by its guns and just preheat frozen food it will lose to them too. People don't go to Tim's to pick up supper or lunch, they go for a coffee and a donut/muffin/bagel/cookie...Keep the easy bake ovens for your express locations, but bring back bakers to the bigger ones that will make nice fresh product that beats your opposition!” — Nick A, Yahoo Finance Canada commenter
Reduce the number of items on the menu
Wasn't a founding value of @TimHortons 'made fresh'? How about shrink the menu back to good coffee and fresh donuts. Stop trying to compete and relearn why you USED to be good. pic.twitter.com/0HgmWGN8ls— BluenoserGal (@OGBluenoserGal) February 11, 2020
Provide better support for employees
“I very much enjoy their coffee. Tim Hortons drive through is their focus. It seems that the drive through is monitored closely by management. No matter which Tim Hortons I visit the counter line is slow and it is mostly new people that do not know how to properly sell the products out at the register. The employees are frequently confused as to how to apply a coupon or how to discount an item.” — Gary, Yahoo Finance Canada commenter
What’s next for Tim Hortons
Since the February earnings call, Tim Hortons has revealed two major changes.
First, it will be overhauling its Tims Rewards program. Instead of the previous system, customers will now earn 10 points for each purchase they make (regardless of value). Customers can then redeem points at different value levels for a wider variety of products. Registered customers select a Reward Level they would like to spend their points at, and when they earn enough points for that Reward Level and make a purchase from something at that tier, their points will be automatically redeemed.
The default Reward Level is 70 points, which is enough to get a brewed coffee or tea, keeping the redemption rate the same as the previous Rewards program. Registered customers can select from 14 Reward Levels, including 50 points for a hash brown, doughnut or cookie, or 220 points for a BELT, farmer’s breakfast sandwich, lunch sandwich or chili.
Changes to the Rewards program has caused a delay in the launch of its Roll Up the Rim promotion, which typically starts mid-to-late February, but is launching on March 11 this year. In response to backlash over environmental concerns related to the Roll Up the Rim contest, Tim Hortons will be giving customers who purchase beverages with a reusable cup three chances to “roll up the rim” — but only if they show their registered Rewards card in the app. Customers who purchase a beverage without a reusable cup but show their card will get one “roll up” on the cup and another in the app for the first two weeks, and only in app for the last two weeks of the contest.
Editor’s Note: This story originally said that Restaurant Brands International was a Brazil-based chain. RBI has its headquarters in Toronto, and a 30 per cent stake in the company is owned by 3G Capital, a Brazilian-American investment firm. When RBI was formed in 2014, 3G Capital owned a majority stake, but that has since reduced.