When Restaurant Brands International unveiled its fourth-quarter earnings this month, most of the Canadian headlines focused on the disappointing performance of its Tim Hortons brand. There were plenty of reasons to be disheartened, including a glut of limited-time offers and an overly generous loyalty program that cut into revenue. Comparable sales fell by 4.3% in the fourth quarter, thanks to the chain’s compounding missteps. It was a bad three months at the end of a bad year at the end of a bad decade for the doughnut behemoth. From an ill-fated partnership with Cold Stone Creamery in 2009 to an ill-fated adoption of Beyond Meat products in 2019, it’s been a long time since the chain had a clearheaded strategy.
That said, there was good news in RBI’s results that was largely overlooked because of our national Tim Hortons obsession. The company—which also owns Burger King and Popeyes—reported an 8.3% boost in sales for 2019. While the burger brand added more than 1,000 new locations in the past year, it was Popeyes that truly stood out. The fried chicken operation saw a 34.4% increase in comparable sales in the fourth quarter and 12.1% for the year overall.
What explains this success? A really, really good sandwich. Initially launched in August, the Popeyes chicken sandwich was neither particularly innovative nor fancy. It was a fried filet of white meat on a brioche bun with pickles and sauce (mayo or Cajun). Both versions earned plaudits. No less than The New Yorker’s Helen Rosner raved: “[The] sandwiches stick the landing on the most important element of a fast-food sandwich: the fusion of its distinct components into an ineffable, irresistible gestalt.” Thanks to one menu item, Popeyes’s revenue grew by US$393 million in one quarter. Restaurant Business Online, a trade publication, noted by way of context that the boost was equivalent to the total annual sales of Chuck E. Cheese.
This success provides a reason to be optimistic about Tim Hortons’s fresh battle plan: make better stuff. The chain has already installed new coffee brewers in more than 2,000 locations. “We’ve continued to use decades-old brewing technology while the industry has evolved,” Restaurant Brands CEO José Cil told analysts. In short, Tim’s distinctive glass pots are headed for retirement.
Improving the quality of core products is a monumental task, but RBI will face a second one that’s even bigger—convincing consumers. When relaunching its own coffee, McDonald’s Canada gave away over 100 million cups to woo patrons. That’s the scale of the effort Tims will need to undertake, given a new double-double is unlikely to be a social media darling like that chicken sandwich. Still, old brands can earn new respect from consumers.
James Cowan