Coffee War: Tim Hortons to Add 800 Outlets in Canada, U.S. by 2018

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By Vittorio Hernandez | February 27, 2014 10:23 AM EST

Reuters
Here’s how can reduce your chances of getting Type 2 diabetes: Drink four cups of joe a day. Epidemiologists noticed that people wired on coffee had a 50 percent reduction in adult-onset diabetes, but it wasn’t until a Chinese group released a new study that suggested a molecular mechanism.

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Coffee and doughnut shop Tim Hortons is determined to win the coffee war in Canada and the U.S. by an aggressive expansion progamme it announced on Tuesday.

Under the plan, the Canadian firm would add 800 franchises by 2018. About 300 would be in the U.S. in the next four years despite Tim Hortons's relative difficulty in penetrating the market dominated by Starbucks.

So far, the potential franchises number almost 100, of which 40 are in St Louis, 25 in Youngstown, Ohio, 15 in Fort Wayne, Indiana, and 14 in Minot, North Dakota.

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The rest would be opened across Canada, including 160 stores in 2014. The brand is popular and has loyal followers in Canada.

Outside the North American market, Tim Hortons has plans to expand to the Middle East, particularly in the Persian Gulf where it has 38 locations, said new CEO Marc Caira who assumed his post in July 2013.

Franchise expert Douglas Fisher, however, warned that Tim Hortons has already saturated the Canadian market based on its year-on-year sales that registered increase of only 1.6 per cent, lower than the national inflation rate.

Mr Fisher said that there is currently one Tim Hortons store for every 7,500 people, causing slower business for individual franchisees.

The franchise expert supports Tim Hortons's plan to expand elsewhere outside Canada because "Once you saturate a market, you have to go look for a new market or you're going to die."

As of December 2013, Tim Hortons had 3,588 locations in Canada, 859 in the U.S. and 38 in the Gulf Region.

While its outlets are on an expansionary mode, Tim Hortons's menu could possible shrink to simplify operations, speed up service and further improve customer experience. It would be through focusing on combination product offers and evaluation of size and premium options.

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(Photo: Reuters / Fredy Builes)
Here’s how can reduce your chances of getting Type 2 diabetes: Drink four cups of joe a day. Epidemiologists noticed that people wired on coffee had a 50 percent reduction in adult-onset diabetes, but it wasn’t until a Chinese group released a new study that suggested a molecular mechanism.
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