The Canadian Press
Tim Hortons doesn't believe the growing popularity of single-serve coffee makers such as Keurig and Tassimo will hurt sales of its store-brewed beverage, the chairman and interim CEO of Canada's largest restaurant chain said Thursday.
Paul House told CIBC's (TSX:CM) retail conference that the bigger concern for the chain over the next few years is the stagnant growth of coffee demand.
Tim Hortons (TSX:TMI) sells its own brand of coffee that can be brewed at home one cup at a time, but has opted to only sell the so-called K-cups in its thousands of locations instead of grocery stores to ensure that franchise owners profit from consumer demand.
Despite its strong market share in Canada, the ubiquitous chain says it still has room to grow, especially in Quebec, Western Canada, parts of Ontario and in major urban markets.
It plans to add up to 180 locations this year and improve the drive-thru efficiency of about 1,000 stores.
Tim Hortons is also expanding its presence in the United States, where it operates in 11 states, primarily in New York, Ohio and Michigan. The company's strategy is to increase the density of locations in key markets to provide consumers with more choice, derive more bang from its marketing spending and gain efficiencies.
Meanwhile, House said a permanent CEO will be named by summer so he can retire about two years after he returned to the position when then-CEO Don Schroeder abruptly left the company.
As of Dec. 30, Tim Hortons has 4,264 systemwide restaurants, including 3,436 in Canada, 804 in the United States and 24 in the Gulf Co-operation Council.