Iconic coffee chain has managed to claw back some business after 40% plunge seen last spring
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Sales at Tim Hortons in 2020 sank by more than US$1.2 billion compared to the previous year, according to a year-end report that shows the full damage wrought by the pandemic.
The coffee chain suffered heavy sales declines for most of the year due to the disappearance of commuting in Canada and rolling regional restrictions that forced dining rooms to close.
System-wide sales were roughly US$5.5 billion globally in 2020, down about 18 per cent from US$6.7 billion in 2019, according to a report on Thursday from Tim Hortons’ parent company Restaurants Brands International Inc.
But Tim Hortons has been gradually clawing back sales for months after taking a major hit at the start of the pandemic.
Same-store sales, a key measurement for year-over-year performance in retail, fell by more than 40 per cent after the stay-at-home orders started last spring, but improved to around negative 25 per cent by May 2020, and about negative 14 per cent by last fall.
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In Tim Hortons’ fourth quarter, ended Dec. 31, same store sales declines were 11 per cent, according to Thursday’s report.
RBI chief executive Jose Cil told investors on Thursday that same-store sales reached the negative single digits in December, which he said were “the strongest result we’ve seen since the onset of the crisis.”
The chain’s annual same-store sales declined by 15.7 per cent globally and by even more in Canada, by 16.7 per cent.
Tim Hortons started 2020 in a difficult spot, even before the pandemic set in. Franchisees were complaining about slumping sales and the extra costs of giveaways associated with the Tims Rewards loyalty program.
Tim Hortons had tried to boost sales with a rapid series of menu experiments, including Beyond Meat burgers. But those only further confused customers, complicated kitchen operations and slowed down average drive-thru times — an important bellwether in the business.
At the start of 2020, Tim Hortons announced it was getting back to basics, looking to turn the business around by improving its core items: coffee, baked goods and breakfast.
In an open letter on Thursday, Cil said Tim Hortons made progress on that front, with new-look breakfast sandwiches that use whole eggs and a reconfigured blend of dark roast coffee. He said the chain is now planning to add new lunch sandwiches and expand its menu of cold beverages.
