| China

Tims China credits rising customer loyalty for record first quarter sales

The operator of Tim Hortons in China is seeking to accelerate the development of its franchise network following a surge in registered loyalty members and strong first quarter revenue growth

A Tims China store in Shaoxing City, Zhejiang Province | Photo credit: Tims China


Tims China has carried strong 2022 sales and outlet growth into the first quarter of 2023 and highlighted rising consumer demand for the Tim Hortons brand across China. 

The coffee shop operator said revenues rose 50% year-on-year to RMB 336.5m ($47.5m) during the three months ended 31 March 2023.  

However, the operator’s net loss widened to RMB 174.5m ($24.6m) compared to RMB 151.3m ($21.3m) for the same quarter of 2022, with Chief Financial Officer Dong Li citing improved profitability at both the store- and corporate-level and operating cash flow breakeven as key near-term financial priorities. 

Tims China opened 31 net new stores in the quarter to reach 648 outlets nationwide, 551 of which are company-owned and operated. 

However, the coffee shop operator will accelerate the development of its franchise network as it pursues further outlet growth in its second quarter. All but four of the new stores added in the first quarter are franchise outlets. 

Tims China CEO Yongchen Lu said the strong quarterly performance highlighted the expansion of its partnership with convenience store giant Easy Joy to roll-out the smaller-format Tims Express concept. 

Tims China expects to surpass 1,000 stores by the end of 2023 and 2,750 outlets by 2026. 

The coffee shop operator also highlighted sustained growth for its loyalty scheme, which registered 1.1 million new members in the three months to reach 12.4 million. Registered loyalty club members are now 10% higher than the end of 2022 and 79% higher than the first quarter of last year. 

“We are pleased to have set a new record for quarterly revenues while achieving positive adjusted store EBITDA in the first quarter of 2023. Despite the difficult circumstances brought by the high number of Covid-19 infection cases across the country in January, our team’s diligence, continuous innovation and creative marketing contributed to our strong recovery with customer demand returning after the Chinese New Year, as evidenced by 17.1% and 19.4% same-store sales growth for company owned and operated stores in February and March, respectively,” said Lu. 

Formed by Cartesian Capital Group and Restaurant Brands International in 2018, Tim Hortons opened its first Chinese store in 2019 in Shanghai. 

In February 2023, Tims China added quick-service fried chicken chain Popeyes to its platform. 

Lu said Tims China and Popeyes have ‘complementary product offerings and exponential growth potential’ and the agreement will bring ‘significant operational and development synergies’. Among these he cited greater scale, a stronger financial model and new restaurant development opportunities. 

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