Tim Hortons To Enter China As Part Of New Strategy To Boost Profits, Perception
Canadian coffee-and-donut chain Tim Hortons will open 1,500 outlets in China over the next decade, capitalising on a growing café culture in the world's second-largest economy, the chain's parent Restaurant Brands International Inc has announced.
The move is part of a two-pronged strategy by Tim Hortons' new President Alex Macedo, who is trying to cope with mounting competition in the fast-food industry at home while also fixing the chain's reputation, bruised after some franchise operators alleged that Tim Hortons mismanaged its franchise operations and bullied some restaurant owners.
"One is improving and increasing our leadership in Canada, and the second is taking a little bit of Canada to the world," Macedo told Reuters in an interview at the parent company's Oakville, Ontario, headquarters.
Tim Hortons will keep its beverage offerings the same in China but will customize its food menu for the local market, Macedo told Reuters. The move into China adds to the chain's global footprint, after last year's entry into the Philippines, Britain, Spain and Mexico.
Tim Hortons has operated in the United States since 1984 and the United Arab Emirates since 2011. It lists 4,256 locations across Canada, 725 in the United States, 125 in the Middle East and between five and 20 in the countries it entered last year.
Macedo, who took charge in December, is seeking to stem profit declines and sweeten customer sentiment. A bitter and public feud with a group of unhappy franchisees in Canada and the United States pushed public perception of the chain to 50th place in a January survey from fourth a year earlier.
China's coffee and tea consumption is expected to climb to 750,218 metric tons by 2020, from 693,748 in 2015, according to market and consumer data provider Statista. Shanghai alone has an estimated 6,500 coffee houses, with small chains, independent stores and bakeries battling for a slice of a market that research firm Mintel says could grow to 79 billion yuan ($11.84 billion) by 2022 from 60 billion yuan last year.
Starbucks Corp has about 3,000 outlets in China now and aims to have 10,000 there within a decade, which would make China a bigger market for the company than the United States.