Tim Hortons
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Tim Hortons Inc. Note that the name "Tim Hortons" is officially written without an apostrophe. [link] (TSX: [THI]
Tim Hortons franchise stores are plentiful in many Canadian cities and towns, as the chain has expanded aggressively across Canada. There were 2,625 outlets in Canada, 297 in the United States and 1 outlet in Kandahar, Afghanistan as of July 4, 2006. Tim Hortons has supplanted McDonald's as Canada's largest "fast food" operator; it has nearly twice the number of Canadian outlets, and its revenues surpassed those of McDonald's Canadian operations in 2002. The chain accounted for 22.6% of all fast food industry revenues in Canada in 2005."Wendy's confirms Tim Hortons IPO by March", Ottawa Business Journal, December 1, 2005, [link] Tim Hortons commands 76% of the Canadian market for coffee and baked goods (based on the number of customers served), and holds 62% of the Canadian coffee market (compared to Starbucks, in the number two position, at 7%)."Tim Hortons Raises C$783 Million in Initial Offering", Bloomberg News, March 23, 2006 [link]
History
The first "Tim Horton" (the "s" came later) store opened in 1964 in Hamilton, Ontario. The business was founded by Tim Horton, who played in the National Hockey League from 1949 until his death in a car accident in 1974. Soon after Horton opened the store, he met Ron Joyce, a former Hamilton police constable. In 1965, Joyce's entrepreneurial spirit had come to the fore and he took over the fledgling Tim Horton Donut Shop on Ottawa Street North in Hamilton. By 1967, after he had opened up two more stores, he and Tim Horton became full partners in the business. Upon Horton's death, Joyce bought out the Horton family and took over as sole owner of the existing chain of the forty stores. Joyce expanded the chain quickly and aggressively in geography and in product selection, opening the 500th store in Aylmer, Quebec, in 1991. However, until recently, the chain had relatively few stores in the western part of the country.
Ron Joyce's aggressive expansion of the Tim Horton's business resulted in two major changes in the coffee and doughnut restaurant market: independent doughnut shops in Canada were virtually eliminated and Canada's per-capita ratio of doughnut shops surpassed all other world nations. "The unofficial national sugary snack", Canadian Broadcasting Corporation, September 1, 1994 [link]
In 1995, Tim Hortons' popularity had spilled over to American investors; the chain's original parent company, The TDL Group (originally Tim Donut Ltd., hence "TDL"), was acquired by American fast-food giant Wendy's International, Inc..
Tim Hortons oversees all stores from its head office in Oakville, Ontario, with over $1.48 billion in sales in 2005."Tim Hortons stock jumps in trading debut", CTV News, March 24, 2006 [link] The acquisition by Wendy's facilitated Tim Hortons' expansion in the United States, where it had previously only had outlets in border communities such as Buffalo, New York. After the merger, new stores opened in New York, Ohio, Michigan, West Virginia, Kentucky, and Maine, many being located in former Hardee's and Rax Restaurants, and others being newly built Wendy's/Tim Hortons combination stores, owing to corporate ties (similar connections have been made by multi-restaurant groups). By 2004, the chain had also acquired 42 Bess Eaton coffee and doughnut restaurants situated in Rhode Island, Connecticut and Massachusetts. Not surprisingly, the largest concentration of Tim Hortons in the United States is in the Buffalo area due to its proximity to the Canadian border.
In late 2005, Wendy's announced it would sell between 15 and 18% of the Tim Hortons operations in an initial public offering which was completed on March 24, 2006, and subsequently said it would spin off to shareholders its remaining interest by the end of 2006."Wendy's to spin off all of Tim Hortons by end of 2006", Canadian Broadcasting Corporation, March 3, 2006 [link] Wendy's cited increased competition between the two chains and Tim's increasing self-sufficiency as reasons for its decision, but the company had been under shareholder pressure to make such a move because of the strength and profitability of the Tim Hortons brand."Wendy's International, Inc. Announces Comprehensive Strategic Initiatives to Enhance Shareholder Value", CNW Telbec, July 29, 2005 [link]
Shares of the company began trading on March 24, 2006 with an initial public offering of C$27 per share, raising over $700 million in the first day of trading. It remains majority-owned by Wendy's until such time as it spins off its remaining interest to Wendy's shareholders by the end of 2006.
Recently three self-serve Tim Hortons kiosks have appeared in the UK and five in Ireland, usually within another store such as SPAR.
Tim Hortons has gained enormous popularity among members of the Canadian military. Bowing to the request of Canadian servicemen and women, in March 2006 Tim Hortons announced intentions to open a shop at the Canadian forces base in Kandahar, Afghanistan. The opening of the new Afghan location was welcomed by Canadian troops on June 29, 2006."Tim Hortons comes to Kandahar", CBC.ca, Jun 29, 2006 [link] Its 41 staff members have been drawn from the Canadian Forces Personnel Support Agency and received training on such matters as how to handle a potential nuclear or biological attack before heading for Afghanistan."Tim Hortons Survival Training", Yahoo News, May 5, 2006 [link]. The Tim Horton's outlet consist of a 40 foot trailer on the base.
On April 2, 2006 a flash fire occurred in a branch on Yonge in the Yorkville area of Downtown Toronto. One man was killed, who apparently had brought a gas can into the men's bathroom, triggering the fire. The man's motives were not clear. Another branch was evacuated later that afternoon after a suspicious package was located, but turned out to be nothing. Both events resulted in the closure of substantial amounts of road around the affected areas.
On May 19th 2006, the biggest Tim Hortons in North America was opened in Clifton Hill, Niagara Falls. This state of the art store has two floors and an elevator.
Growth of the Tim Hortons Chain
- Store #1 - Hamilton, Ontario - May 1964
- Store #100 - Thunder Bay, Ontario - December 1978
- Store #200 - Hamilton, Ontario - December 1984
- Store #300 - Calgary, Alberta - February 1987
- Store #400 - Halifax, Nova Scotia - February 1989
- Store #500 - Aylmer, Quebec - January 1991
- Store #700 - Moncton, New Brunswick - October 1993
- Store #1000 - Ancaster, Ontario - August 1995
- Store #1500 - Pickerington, Ohio - March 1997 (this was also Wendy's 5000th store)
- Store #2000 - Toronto, Ontario - December 2000
- Store #2500 - Cayuga, Ontario - September 2003
- 100th U.S. store – Columbus, Ohio - July 31, 1998
Advertising and promotion
Tim Hortons has one of the most successful marketing operations in Canada. With powerful and effective branding, the store has established itself in the top class of fast-food restaurants in Canada and in the heart of Canadian culture. Canadian Business magazine has twice named Tim Hortons as the best-managed brand in Canada (in 2004 and 2005)."Tim Hortons Raises C$783 Million in Initial Offering", Bloomberg News, March 23, 2006 [link]; "Investing in an icon: Why everyone wants a piece of Tim Hortons", Ottawa Citizen, March 19, 2006 [link]; "Timbit Nation", Toronto Star, March 26, 2006 [link]; "Troops in Kandahar to get a Tim Hortons shop", March 7, 2006 [link]
Tim Hortons commercials appear frequently on Canadian television and radio stations, and all six of the Canadian NHL rinks have Tim Hortons ads along their boards. Generally the chain promotes one or two "featured" products every month, such as iced cappuccinos and various sweetened baked goods during the summer, lunch products such as soup or sandwiches during the winter, and its flagship coffee promotion Roll Up The Rim to Win (see below) during the early spring.
Tim Hortons' advertising slogans have included "You've Always Got Time for Tim Hortons" and, more recently, "Always Fresh".
Roll Up the Rim to Win
From March until May of each year, Tim Hortons holds a very large marketing campaign called Roll Up The Rim to Win. Over twenty million prizes are distributed each year, ranging in value from vehicles to televisions, to store products. Customers determine if they have won prizes by unrolling the rim on their paper cup when they have finished their drink, revealing their luck underneath.Advertising for the contest is always very aggressive. The ubiquitous Tim Hortons ads on the dasher boards of Canadian hockey rinks change from the normal "Tim Hortons" signage to a "Rrrroll up the Rim" display; the timing of the promotion also is key because it is during the height of the NHL season, ensuring that viewers across North America will see the ads. Television and other media are inundated with advertisements that repeat the "R-r-roll up the R-r-im to Win" slogan and encourage the recitation of the phrase using rolled R's to match the announcer's delivery.
Prizes are not distributed randomly country-wide; each of the company's distribution regions has its own odds for prize-winning."Not all rims rrroll up equally", Canadian Broadcasting Corporation, March 15, 2006 [link]
In March 2006, two families were fighting over the Toyota RAV4 SUV prize of $32,000 value after their daughters found a winning coffee cup in a garbage bin of an elementary school in Saint-Jérôme, north of Montreal. The younger girl had found an unrolled cup in the garbage bin and could not roll up the rim and so requested the help from an older girl. Once the winning cup was revealed, the older girl's family stated that they deserved the prize. Tim Hortons originally stated that they would not intervene in the dispute. A further complication arose when Quebec lawyer Claude Archambault requested a DNA test be done on the cup. He claimed that his unnamed client had thrown out the cup and was the rightful recipient of the prize. On April 19, 2006, Tim Hortons announced that they had decided to award the prize to the parents of the girl who had initially discovered the cup."Finders, keepers: Tim Hortons puts a lid on cup contest controversy", Canadian Broadcasting Corporation, April 19, 2006 [link]
Community
The store also promotes itself through community support and the "Tim Horton Children's Foundation". Founded by Ron Joyce, the Foundation sponsors many thousands of underprivileged children from Canada and the United States to go to one of six high-class summer camps located in Parry Sound, ON; Tatamagouche, NS; Kananaskis, AB; Quyon, QC; Campbellsville, KY; and St. George, ON.The foundation's highest-profile fundraiser is Camp Day, which is held annually on the Wednesday of the first full week in June. All proceeds from coffee sales at all Tim Hortons locations, as well as proceeds from related activities held that day, are donated to the foundation.
Mr. Joyce's dedication and commitment to the Tim Horton Children's Foundation earned him the Gary Wright Humanitarian Award in 1991, presented periodically in recognition of the outstanding contributions to the betterment of community life throughout Canada. In recognition primarily for his work with the Foundation, he received an appointment to the Order of Canada, with the official presentation taking place on October 21, 1992 in Ottawa.
Tim Hortons stores often locally sponsor young children's sports programs, known as "Timbits" minor sports.
A Canadian cultural fixture
The ubiquity of Tim Hortons, through both effective marketing and the wide expansion of its outlets, makes it a prominent feature of Canadian life. Tim Hortons' prevalence in the coffee and doughnut market has led to its branding as a Canadian cultural icon, and the media routinely refer to its iconic status.See, for example: "Tracing the roots of an icon", Montreal Gazette, March 21, 2006 [link]; "Investing in an icon: Why everyone wants a piece of Tim Hortons", Ottawa Citizen, March 19, 2006 [link]; "Timbit Nation", Toronto Star, March 26, 2006; "Tims holds gains", Globe and Mail, March 24, 2006 [link]; "Bay Street Week Ahead-Tim Hortons serves up hot IPO to go", Reuters News, March 26, 2006 [link]; "But can iconic coffee chain sustain growth, analysts wonder", Winnipeg Free Press, March 20, 2006 [link] A series of Tim's television commercials promotes this idea by showing vignettes of Canadians abroad and their homesickness for Tim Hortons.Noted Canadian author Pierre Berton once wrote: "In so many ways the story of Tim Hortons is the essential Canadian story. It is a story of success and tragedy, of big dreams and small towns, of old-fashioned values and tough-fisted business, of hard work and of hockey.""Investing in an icon: Why everyone wants a piece of Tim Hortons", Ottawa Citizen, March 19, 2006 [link]
Notes and references
External links
- [Tim Hortons official site]
- [Map of Tim Hortons Coffee shops in Canada]
- [Tim Hortons Franchise Information]
- [Wendy's International, Inc. Corporate and Investor site]
- [More on Tim's History]
- ["King of The Cruller", Canadian Business, about Tim's successful branding (Acrobat file)]
- [Royal Canadian Mint: The Poppy Coin]
- [Tim Hortons Official History]
- [Canadian Forces Chief of Defence Staff invites Tim Hortons CEO to visit Kandahar to set up coffee shop]
- [Timbit Nation], Toronto Star article
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