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Canada’s top coffee chain Tim Hortons looks abroad for expansion

Tim Hortons has made inroads in the United States and has a nominal presence in the United Kingdom and Ireland but its farthest-flung venture is in the Arabian Peninsula.

While Tim Hortons rules Canada, in other lands it is merely one coffee shop among others.

But for the chain, founded in 1964, to grow over its next half-century, it needs to expand beyond its homeland.

So far, Tims has made inroads in the United States and has a nominal presence in the United Kingdom and Ireland (mainly self-service kiosks), but its farthest-flung venture is in the Arabian Peninsula.

“In 2011, we entered the Gulf Cooperation Council (GCC) through a master licence agreement with Apparel FZCO,” the company says in it latest annual report.

“By the end of 2012, there were 24 Tim Hortons restaurants operating in the United Arab Emirates and Oman, with plans calling for up to 120 in the region by the end of 2015. The initial performance of our restaurants in the GCC has exceeded our expectations. In addition to supporting our belief in the potential international appeal of our brand, our presence in this region provides an opportunity to validate our international business model and learn from our experience.”

Indeed just last month, workers were putting the finishing touches on a fresh Tims on Jumeirah Beach Road in Dubai.

It has been a tougher grind in the US, which Tims describes as “our primary focus for the next wave of growth”. At the end of fiscal 2012, the company had 804 US outlets, with concentrations in New York, Michigan and Ohio.

Annual sales last year at an average Tims restaurant were C$2.17m in Canada versus C$1.09m in the US. Still, sales growth was slightly stronger in America: up 12.1 per cent since 2008, versus 10.9 per cent to the north.

In 2010, however, Tims beat a retreat from three New England markets; New England is, of course, Dunkin’ Donuts country. Tims closed 34 restaurants and 18 self-serve kiosks in Portland, Maine, Providence, Rhode Island and Hartford, Connecticut.

But being the challenger rather than the champ forces Tims to innovate. The US outlets are meant to be slightly more upscale than the Canadian ones and it was in the US that the chain first offered grilled panini sandwiches – which, when they migrated to Canada last year, instantly ranked as the most expensive item on the menu.

rmckenzie@thenational.ae

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