Tim Hortons' new Dubai location represents “the first true export of the brand,” CEO Paul House said Tuesday, but even after the outlet opened its doors to crowds of Canadian expatriates, the chain is not rushing toward a global presence.
“It's a historic moment,” Mr. House said of the Dubai “cafe and bake shop” opened Saturday, which generated online buzz among homesick Canadians who waited in long lineups to seek out the trademark double double.
“We have got some smaller self-serve operations in Ireland but this is what I believe is our first true export of the brand.”
“We've had every Canadian there so far,” Mr. House told the Scotiabank Back To School conference in downtown Toronto.
Though the chain has those self-serve kiosks in the U.K., and a temporary location at the Kandahar Airfield for troops in Afghanistan, the Dubai store is its first full-serve restaurant outside of North America.
In addition to a loyal Canadian following, Tims will gain global exposure from its location in the modern Middle Eastern city, which attracts tourists from countries like Russia, where the chain may one day expand, Mr. House said.
The menu is identical to that in Canada, Mr. House said. Although Dubai is a “mature” coffee market, with many Starbucks already scattered throughout the bustling city, Tims sees opportunity in its value-priced food options, which it says are not readily available in the region.
The store in Dubai is the first of a development plan with Dubai-based Apparel Group to build 120 stores in the United Arab Emirates, Qatar, Bahrain, Kuwait and Oman over the next five years.
But the Canadian coffee-and-doughnut chain says it's in no rush to enter another country and isn't committed to a vigorous timetable for international expansion.
“We're promising very little at this point,” Mr. House said.
Instead, the chain plans to keep international efforts focused on the U.S. market, where it says it is making in-roads through non-traditional model stores — kiosks in places like gas stations and universities.
“I think you have to seed the brand internationally beyond North America and that's what we're doing, but we're not setting any vigorous timetable or making some irresponsible statement that we're going to have 2000 stores in five years or something like that.”
The strategy of targeting university students with on-campus kiosks — Tims was one of the first major chains to set up shop on campuses — was effective in creating repeat customers in Canada, and Mr. House hopes it can work in the United States.
“Our success in downtown Toronto in the last few years is directly attributable (to the fact) that every university graduate came out with a Tim Hortons habit,” he said.
The chain previously had only limited success with opening locations in the city's swank financial district. But after opening the university locations, it has a stream of loyal customers, and multiple locations in the area.
South of the border, however, its competitive situation is very different as it tries to claw its way into that hyper-competitive market.
Late last year, Tim Hortons said it would close 54 locations in New England, a money-losing market for the company, where it faces strong competition from locally headquartered Dunkin' Donuts.
Its strategy is to build up stores in core markets — border states like Michigan and New York — rather than expand to new regions
Mr. House said the decision to open more non-traditional locations in the U.S. —inside Wal-Marts, airports and other gathering spots — does not mean growth is slowing for the chain, instead it represents a “whole new market opportunity.”
Mr. House recently took over the CEO role on an interim basis after former head Don Schroeder stepped down abruptly in May. The company is searching for a new permanent chief executive and has already compiled a list of internal candidates, but has yet to identify all potential external candidates.
Since opening its first U.S. store in Buffalo, N.Y., in 1985, Tim Hortons has expanded to over 600 stores in a dozen states —including Michigan, Ohio, Kentucky and West Virginia — and plans to open another 300 locations over the next three years.
Based in Oakville, Ont., Tim Hortons is Canada's biggest restaurant chain and the fourth-biggest in North America with more than 3,700 restaurants on the continent.
Shares in Tims added 2.7 per cent, or $1.25, to $47.25 on the Toronto Stock Exchange in Tuesday afternoon trading.