Why Tim Hortons Struggles In The United States

Why Tim Hortons Struggles In The United States

You know that old joke that there’s a
Starbucks on every corner in the United States. In that Dunkin’ Donuts slogan,
America runs on Dunkin’. Well, there’s a Canadian coffee chain
that makes those look like quaint little neighborhood cafes. Meet Tim Hortons, Canada’s one stop shop
for coffee, breakfast, lunch and doughnuts. In 2018, it supplied over 60 percent
of the revenue of its parent company, Restaurant Brands International; which also
owns Burger King Popeye’s. More importantly, it’s been a
company darling among Canadians. The DNA of the brand is Canadian. It’s hockey. It’s “oh, we’re polite.” It’s all the stereotypes that Canadians,
you know, love that they have. It’s every bit as Canadian and even
more so than Coca-Cola is American. In 2015, the last year that Tim
Hortons made its store count publicly available, there was one Tim Hortons
location for every nine thousand eight hundred Canadians. These are the same figures for Dunkin’
in Starbucks in the United States. But this success is
quickly becoming a problem. They have probably definitely reached a
saturation point with in Canada. The company needs
to expand elsewhere. And the U.S. has long been a
target, but they’ve struggled here for decades. Which raises the question, why can’t this
Canadian icon win over its southern neighbors? The first ever Tim Hortons
opened in 1964 right here. And the first successful
location in the U.S. opened just across this
border 20 years later. A few years earlier, Tim Hortons opened
two locations in these two Florida beach towns, hoping that vacationing
Canadians would both support the business and bring in Americans. But these struggled because of
production issues and because Floridians lacked the brand awareness that Americans
closer to the Canadian border have. Bottom line is this the closer
the geographical proximity of an American city to the Canadian border, the
better off Tim Hortons does. Both of the Florida Tim’s close in 1995
and the brand has stuck close to the border ever since. The company expanded rapidly across these
states using a franchise model in the 1990s and listed on the U.S. stock market in 2006. Tim Horton’s kind of just jumped into
the franchise, opened up a couple hundred stores in the U.S. fairly quickly. Using data from their subsequent public
filings, we can see that 98 percent of Tim’s locations
in the U.S. were in just these eight states. Why did both recognition and recall. The closer you are to the Canadian
border, the theory would would say that you are going to be more likely to
cross the Canadian border for a weekend shopping. There’s a Tim Hortons on
every on every block. It’s not bad stuff. They like it, you
know, go back across the border and if Tim Hortons is there, you know,
the more likely be a consumer. But even these border states couldn’t
cushion Tim Hortons against their biggest problem in the U.S. – market saturation. If you’re the 15th company that’s
entering an American market offering coffee and doughnuts, you’ve you’re so
far back in terms of mindshare. And Tim Hortons does not have huge
dollars in comparison to some of the other competitors or the entrenched regional
players that maybe there or national players like
Starbucks, for example. Anyone can name their near Starbucks
or maybe their nearest Dunkin’ Donuts. So in the U.S., it’s facing a lot of competition. For Canadians, Tim Hortons is a go to
spot for many food items, hot and cold, coffee, drinks, breakfast sandwiches,
lunch wraps and soups, fruit smoothies and, of course, doughnuts. But Americans have
many other options. Dunkin’ and Starbucks, of course, but
also Panera Bread, Jamba Juice, McDonalds or one of the other estimated 58
thousand coffee and snack shops in the U.S.. And these all have far
better brand recognition among Americans. Humans are creatures of habit. If you have an option between a
Starbucks, Dunkin’ Donuts and a Tim Hortons, you’re probably going to go to
Dunkin’ Donuts because you know that product. You know what your
order is; it’s familiar. In 2010, Tim Hortons closed 36
locations throughout New England after their poor performance cost
the business 4.4 million that year. This included a complete retreat from
Connecticut, Rhode Island, and Massachusetts. Burger King bought Tim Hortons in 2014
for 11 billion dollars and the combined company, Restaurant Brands
International established its headquarters in Toronto. Analysts told CNBC as part of the
agreement to locate the company Canada, the Tim Hortons segment promised to
continue expanding in the U.S. They had to prove that they
were going to expand internationally, especially if the U.S. and get their brand to grow further
and not just be concentrated and saturated within Canada. But in 2015, the very next year,
RBI closed 234 locations in the U.S., telling CNBC in an emailed statement
that the closures were part of building a foundation for future
growth in the United States. Starting in 2016, they’ve stopped breaking
out the Tim Hortons growth, specifically in the U.S. as focused just because of the heat
they’ve been getting in terms of performance of Tim Hortons
in the United States. RBI did not respond to CNBC
requests for comments or an interview. So no word on exactly
what their plan is. But analysts point to a few trends or
strategies the brand could use going forward. Like premium coffee and dormant
options or healthier breakfast sandwiches. RBI has been at the forefront of
the plant based meal trend, including Impossible burgers at Burger King and
Beyond Meat sausages at Tim Hortons in 2019. It also struck a deal in July 2019
to test just brand plant based eggs at some Canadian Tim Hortons locations. But some think RBI is waiting too long
to launch these items in the U.S. Something they should consider doing is
launching the products that they launch in Canada. At the
same time in the U.S., because it’s not like they
don’t have the infrastructure. And some wonder whether RBI should
look beyond the U.S. altogether. Outside of the U.S., Tim Hortons is growing
quite popular, right? So they have introduced
stores in Mexico. The thing is, the Philippines, they
just started launching in as well. So anywhere where Starbucks and or
Dunkin’ hasn’t completely taken over, I think might actually be a
better fit for them. I know the U.S. is the big gym
for any company that wants to create an international brand or grow biggest
consumer market in the world. But it’s also the most competitive
and that’s a very tough market.

81 Replies to “Why Tim Hortons Struggles In The United States

  1. HEY TIM



  2. I live in michigan and Timmies is all over here. I have 7 within a 5 mile radius of me. I choose to go there because it's cheaper than most other places near me, and honestly their coffee is just better. Nothing beats a large double double for $2.12 and lines aren't nearly as intense and hectic as they are at Starbucks, and honestly Dunkin is just crap in a paper cup. The only place giving Timmies a run for my dollar is Bigby.

  3. They would never make it in the USA… the food sucks, coffee is mediocre, nothing special at all about it. Reminds me of Culvers…. not worthy .

  4. Canadian don’t care about how things look or sound, they want coffee without the fluff so Tim Horton’s succeeds.

    Americans care too much about how things like look and sound, so they turn coffee into a cup of liquid candy. They want fluff so Starbucks succeeds and Tim Horton’s doesn’t.

    There ya go! Fluff and $$$$ vs. Substance and simplicity

  5. I think the concept is good. A one-stop-shop for coffee, donuts, breakfast items, and a light lunch. In the US you'd have to go to Starbucks, Dunkin Donuts and Mc Donald, to get all of these items. Dunkins also sells coffee, and some breakfast items, but their coffee is crap, and they are still trying to shake off the donuts image people still have of them. People do not think of Dunkins when thinking of breakfast, nor do people think of McDonald's when thinking of a good coffee. So, there is an opportunity there for Tim Hortons. IMO, they should just shorten the name to Hortons. Easier and catchier. You are welcome Tim Hortons😄

  6. we're creatures of habit? Then how come people are flocking like sheep to popeye's chicken sandwiches?
    People seem very easily influenced.

  7. It's funny because I live on the Canadian boarder in Michigan and have family in the Philippines so it feels like Tim Hortons is everywhere.

  8. they should given free food day, that way people will know they exist. That's one reason, I keep my Costco members, to get inexpensive food in their food court. Give food away or discounted food n your have your name recognized.

  9. My Advice, give food away as advertisement in USA.. U could keep giving away free food till people get use to you and have greatful customers. What u do is have people sign up for breakfest memberships deals where every meals discounted for the next 2-3 months, n they'll also have the first 2 or 3 meals free..

  10. My Advice, give food away as advertisement in USA or do something new n different. For example, do breakfest membership deals, where people sign up for membership to HOrtons n you do free delivery to their residence for people who don't want to cook breakfest at home. One think, I'v notice of Hortons over Starbucks or Dunkin is they actually have diner like food. The ones I went to in Canada had soups, even sandwiches if I recall correctly.

  11. Tim Hortons in the Philippines is mostly filled by Filipinos, and their prices are very competitive compared to Starbucks. A drink in Starbucks here is PHP 150-200 ($3-5ish) whereas Tim Hortons has a coffee and sandwich for the same price. This could be a key advantage in a country that's very price sensitive due to how much Filipinos make in a day where minimum wage is $10 (PHP 500)

  12. Tim Horton’s is like a poor mans version of Starbucks. The same as Tudor is a poor mans Rolex… on a real note though their coffee is not of quality at alll

  13. Been to Vancouver BC many times from Portland. Been drinking Starbucks since 1994. I tried Hortons. It feels like I am in a fast food restaurant. Nothing special. Coffee sucks and the people are not friendly. What makes me show up every day for my coffee? Very friendly baristas that ask me about my day and I get to know them. It’s all about the experience. Waiting in line. And talking to the people who hand out there.

  14. I’m a NYC/LA guy and have been to Canada many times. I’ve been to Tim Horton’s and it’s no show stopper. Starbucks carries premium blends and Dunkin is a go to when on the run like Horton’s in Canada. On the real I prefer boutique coffee shops or a small chain like Blue Bottle. Canadians are very polite & nice people I must say.

  15. One of the easiest was to build brand recognition is to switch to Tim Hortons cups for coffee in all Burger Kings.

  16. I had never really given the idea that Tim Hortons struggles much thought, because in certain areas, it seems to do just fine.

  17. everything and I mean everything on the menu at Tim Hortons is disgusting. This place boggles my mind how Canadians think this is good. It's awful in every way possible

  18. So RBI is responsible for Burger King and Popeyes? Now i know who to send my letters to regarding the filth and horrible service to. Every Burger King i have ever seen is filthy.

  19. Off topic, but does anyone notice that both the female spokesperson and the narrator pronounce T as a really strong "glottal stop" in the middle of words ("Horton's") and end of words (ie, "not"), where as the (presumably older) male spokesperson pronounces it more softly? This is a change I have noticed in people's speech in the last fifteen or twenty years. I'm weird. Or old.

  20. Americans can get better coffee and donuts at the same fast food speed elsewhere, Canadians can too but Canadians have an attachment to Tim Hortons. Tim Hortons has zero chance of being successful in the big US cities relatively close (within ~500km/310 mi) the Canadian border (i.e. Buffalo, Detroit, The Twin Cities, Seattle). For Tim Hortons to succeed in the United States, they have to become a higher quality brand and that is too much of an expenditure for their parent company. I think they should just stick to being a Canadian brand for Canadians.

  21. I live in south Florida and we have so many (French) Canadans here from nov-March. For some reason they still think there is snow in the road and create a lot of road rage but I still like new things to eat if it’s worth my time

  22. This is so weird because I live in Columbus Ohio and we barely have Starbucks locations or Dublin donuts. But there is literally a Tim Hortons on every block. Dunkin’ Donuts is not common here

  23. my dad tried the beyond meat sausage at tims and he said it was terrible. also the quality of service at tims in canada is getting worse all the time the regularly mess up orders or take too long. many people would go to a country style over a tims cuz its just better

  24. "But this success is quickly becoming a problem… The company needs to expand elsewhere" Why is it presented as axiomatic that they need to expand? Why not just keep chugging along serving Canadians forever? Why is a large, successful company that is unable to grow bigger yet considered "a problem"?

  25. I think TIm Hortons could succeed if they took a different approach for the US market. Here in the US, we have 2 major Donut brands, several chains serving breakfast, and Starbucks. There is a downside with this strategy. The amount of labor required to run separate donut shops, Starbucks, and a McDonalds collectively exceeds that of a single TH. Tim Hortons could target areas with labor shortages where those companies should have a harder time finding people. If you need less people for what amounts to the same set of products, you're the cheaper brand.

  26. Tim Hortons has been aggressively opening up stores in the Philippines. For the last year, I've seen Tim Hortons in every major business hubs in Manila. Hopefully, they will grow more and more and give Starbucks a run for their money.

    P.S. I love their Hazelnut Latte.

  27. Any US soldier who deployed to Kandahar has probably been to the Tim Hortons at Kandahar Air Field. The Canadians brought over a trailer and we were all instantly hooked. That thing was packed around the clock. I was always looking out for one in the states but I only ever saw one in upstate New York.

  28. They have good food and drink, too bad they only limited themselves around states close to Canada. If they expanded into more states, especially California, they would have been in better shape.

  29. The food is greasy and terrible and the coffee tastes like dirt. I don’t get why Canadians love Tim Hortons, they just don’t know how bad it is.

  30. Stop coming to developing countries. We don't need your crap. You can stay fat alone. We have much better local dishes.

  31. In the Philippines, their iced coffee is trending for hippies and millenials in the business areas. It is because it’s cheaper compared to Starbucks. But for doughnuts, we have Dunkin, Krispy Kreme, and JCO which we all love. Then there’s Jollibee for breakfast :p

  32. Like..stop drinking your calories. Starbucks isn't healthy. Your weight issues are fueled by Starbucks and fast food. America is overweight… disgusting

  33. Crappy coffee and “fresh” frozen baked goods? I’m shocked it’s as popular as it is here in Canada! McCafé all the way!

  34. They’re struggling because they don’t have any stores open in the Seattle area. We get the Canadian Invasion every day when they come down here for gas, groceries, and clothes. Highest sales store would be at the Seattle Premium Outlets in Tulalip. The door would literally never close at that store.

    Also Tim Hortons donuts are delicious as is their cappuccino drink mix. I have driven to Canada just for more cappuccino mix.

  35. The first time I saw a Tim Hortons was when I was a student at University at Albany. Amazing sandwiches and donuts. In my opinion the service is much better too.

Leave a Reply

Your email address will not be published. Required fields are marked *