Tim Hortons prioritizes speed of service, simplicity

Marc Caira, the recently named CEO of Tim Hortons, outlined a host of initiatives for the brand during this morning's earnings call. The third quarter yielded a 1.7-percent sales increase in Canada and a 3-percent jump in U.S. stores. Among the company's focus are improvement in speed of service and operations, as well as taking advantage of the menu opportunities that attract Millennial consumers, such as specialty beverages and healthier options.

New reality

Caira said he is particularly pleased with the U.S. business in the face of a sluggish environment and a highly competitive landscape.

"There is a new reality of low-growth and value-conscious consumers who are firmly in control of their choices," he said. To excel in this changing environment, Tim Hortons has to provide the "ultimate in guest service every day, and every moment of transaction."

Across the Canadian system, the company continues to focus on operational enhancements, including speed of service. For this effort, more than 75 percent of the Canadian restaurants with drive-thrus will include either a newly positioned ordering station or double lanes by the end of the year.


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"These are good improvements for both speed and number of cars that go through the drive-thru. We're also confident they're improving the guest experience," Caira said.

Tim Hortons is also rolling out new exterior menu boards across the system, aimed to make it easier for guests and team members to navigate through the menu more quickly and accurately, he said. Interior menu boards have also been simplified with a new layout that displays more images and fewer words. This has led to faster service and more accurate orders, "two key components of providing the ultimate guest experience," Caira said.

And, beverage express restaurants are being tested at select urban locations to benefit guests who come in just for coffee.

"We're encouraged by the comments early on," Caira said.

Pipeline

Caira also touched on the company's menu pipeline during the call, saying the recent introductions of grilled steak and cheese Panini and Extreme Italian sandwich were both well received by guests and helped with Tim Hortons' strategy of growing its lunch daypart share.

During Q3, the company also launched its K-Cup-compatible platform.

"Single-serve coffee is the fastest-growing part of the coffee market and we're taking advantage of the Tim Hortons' brand to capture share," Caira said. The K-Cup platform has been a positive contributor in both the U.S. and Canadian systems early on, and the company anticipates more growth going into the holiday season.

In reference to Tim's dark roast pilot now taking place in the Columbus, Ohio, and London, Ontario, markets, Caira said as a "coffee leader, we have the responsibility to bring consumers innovations they are seeking."

Finally, Caira touched on some pieces of the company's menu strategy to attract new and younger customers, including venturing into milk-based coffees and "coffees with origin."

"(Younger consumers) are looking for different products, things beyond black coffee. They're looking at specialty beverages, milk-based coffees and juice blends. We can do more to keep them engaged," Caira said. "People are much more (health) conscious and as the leaders, we have a responsibility to meet and provide our consumers with information and develop products deemed to be healthier."

Read more about operations management.

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