New Tim Hortons CEO Marc Caira may not have figured out how to sell enough Canadian-developed coffee in the United States yet. But he sure knows how to peddle interest in what Canada’s brightest native star of the QSR industry might end up doing.
In multiple interviews and an analysts’ meeting this month, Caira—a former Nestle SA executive who came out of retirement in July to run Tim Hortons—has made a few things clear: Growth in Canada depends on more variety in new outlets and better execution everywhere; dinner is an appealing day part; and Tim Hortons must, must, must succeed in the US market despite investor unrest at the brand’s poor performance south of the border so far.
Somewhat curiously, Caira discounted the importance of typical pillars in improving Tim Hortons’ performance. “Future battles are not going to be won, in my view, with who has the best strategy or who has the best innovation,” he said, according to The Canadian Press.[more]
Rather, Caira said, “The companies that will win will be the companies that can execute flawlessly at store level.” And to that end, he said, Tim Hortons is considering measures ranging from simplifying its menu—”Everybody sells smoothies,” he said—to expanding into vending machines and maybe even taking its brand outside its restaurants. The chain already has been trying to speed up the process at its counters with double-lane drive-throughs and other tactics. However, in January it introduced yet another, larger-sized cup.
“I came to this company because I think there is a lot of potential,” he told the Wall Street Journal. “Tim Hortons can evolve. We don’t have to revolutionize anything here.”
While some critics believe the Canadian market already is saturated with nearly 3,500 Tim Hortons, Caira believes moving further into lunch and dinner will help those outlets post better returns. “We’ll get to dinner,” he told the Financial Post. And the brand’s lunch-based panini sandwich platform could be rolled back into breakfast, Caira said.
But Caira’s biggest challenge seems to be figuring out the United States. The oldest Tim Hortons outlets—in border states including Michigan and New York—tend to perform fairly well, but the brand has had trouble penetrating further. That has helped lead to pressure from activist investors, some of whom would like to see Caira withdraw altogether from its US venture.
The new CEO has made it clear that’s not where he’s headed. “The US for me is what I call a must-win battle,” he told the Post, explaining that it’s still Tim Horton’s best hope for growth.
Part of the chain’s approach to the United States, he told the Journal, involves a new “capital-light” strategy in which the company restrains its own capital investments while relying on franchisees and other partners that understand and are established in their particular markets.
“We tried to replicate the success we had in Canada in the US, and the US is a different, unique market,” he told the Journal. “What might have worked in Canada might not work in the US.”
Caira just wants to understand what does.