Noticed longer lineups at Tim Hortons drive-thrus lately? A likely cause for the lengthier wait times is lower gas prices, according to experts.
As seasoned Canadian commuters can attest, a propensity to reside close to fuel stations has encouraged plenty of “quick” trips through a Tim Hortons drive-thru, even when pump prices were well north of a $1/litre.
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With gas nearly 20 per cent lower than a year ago, according to Statistics Canada, those quick trips are apparently becoming more numerous, with the few bucks saved on a fill-up being spent on a coffee or pack of Timbits.
The chain’s parent, Restaurant Brands International, reported on Tuesday a 5.4 per cent jump in sales at established Canadian locations, a solid number given the stiff competition for fast-food dollars in Canada.
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New menu items, like wraps, are helping. But cheap fuel is a major driver, experts say.
“[Tim Hortons] should continue to benefit from lower gas prices,” analysts at CIBC World Markets said in a research note last week.
Having highly trafficked areas densely packed with Tim Hortons locations is part of the recipe that’s made Tim’s so successful in Canada. The chain’s new owners are now looking to replicate that model south of the border, as well as around the world.
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To that end, Restaurant Brands said Tuesday it has signed the first of what it hopes will be many “accelerated development agreements” with a local operator in Cincinnati, Ohio, with the aim of opening as many as 150 Tim’s locations in the city of 2.2 million over the next several years.
“That transaction should serve as a model we hope to replicate in a lot of additional markets and ramp up the pace of growth for us in the U.S.,” Joshua Kozba, head of finance at RBI, said on an earnings call.
“We view it as one of the critical elements to success, [the] need to achieve a certain level of density,” Kozba said. “And we’ve seen that with our Tim Hortons markets in Canada.”
Here’s a slide showing Tim’s locations around the world at present: