As Tim Hortons pulls the plug on its Cold Stone Creamery brand in Canada, the iconic coffee chain announced its plans to launch a loyalty rewards program for CIBC Visa cardholders.
A refreshed vision for Tim Hortons begins to take shape this week as the company releases details on its financial results, and how it plans to remain innovative in the highly-competitive Canadian coffee market. (CP)
The chain’s decision to end ice cream sales in Canada cost Tim Hortons about $19 million in the fourth quarter but will help simplify its menu, which has grown far beyond coffee and doughnuts, and allows franchise owners to focus on their core business.
Its partnership with the American dairy chain Cold Stone Creamery, which began in 2009, will continue in the U.S. Tim Hortons locations.
The announcement came Thursday as Tim Hortons reported it had $898.5 million of revenue during the fourth quarter, up 10.7% from a year earlier, but a smaller profit than analysts were expecting.
Tim Horton’s operating income fell by 1.8% to $147.8 million, in part because of the Cold Stone Creamery de-branding and also by the decision to close some underperforming U.S. restaurants.
The U.S. closures resulted in a $6.6 million charge in the fourth quarter.
“During the fourth quarter, we made important strides to position the company for further success,” Marc Caira, Tim Hortons president and CEO, said in a statement Thursday.
“We have worked to enhance our capital structure, as well as simplify our operations, strengthen our menu and refresh our restaurants, all to provide the ultimate guest experience.”
“I believe the choices we are making today and the strategic roadmap we are developing will set the stage for continued long-term growth and profitability.”
Caira will take the stage at the company’s investor day on Tuesday to further describe the next steps for the company.
The same day Tim Hortons announced its fourth-quarter results, it unveiled a co-branded credit card that allows CIBC clients to accumulate points (“Tim Cash”) for all purchases made with the card. Tim Cash can be redeemed instantly at participating locations.
“At Tim Hortons, we’re fortunate to have very loyal guests, many of whom visit us every day. We feel that an innovative card such as this not only provides guests added convenience, but is a great loyalty rewards solution offering instant redemption for their favourite Tim Hortons menu items,” said Tim Hortons COO David Clanachan, in a release. “This new card complements our strategy to actively purchase further technological innovation that help directly connect our guests with our brand.”
Tim Hortons will launch a national marketing campaign to support the loyalty program, which launches in May.
