Burger King, Tim Hortons bring home the bacon in second quarter sales
Burger King and Tim Hortons both had a strong second quarter, according to their parent company Restaurant Brands International. Burger King had a 6.7 percent increase in global same-store sales, while Tim Hortons had 5.5 percent increase.
This Aug. 25, 2014, file photo, shows signs for Burger King and Tim Hortons locations in Ottawa, Ontario. The parent company of Burger King and Tim Hortons, reported a better-than-expected quarterly profit after global sales climbed at established locations for both fast-food chains.
Sean Kilpatrick/The Canadian Press/AP/File
Restaurant Brands International (RBI) reported Q2 sales so strong that it invites the question of when its $17 billion Burger King and $6 billion Tim Hortons brands will begin to cannibalize each other.
“Strength” was a word repeatedly used by RBI CEO Daniel Schwartz, and with good reason. Burger King’s 6.7% increase in global same-store sales was its best showing in nearly 10 years. That included a 7.9% rise in the U.S./Canada and a 5.1% jump in Europe/Middle East. RBI did not disclose how much of its same-store-sales growth was from price/check and how much from traffic gains. Schwartz pointed to the success of the A.1. Hearty Mozzarella Bacon Cheeseburger—noting that the A.1. Sauce was the only new ingredient in that build—Extra Long Pulled Pork Sandwich and Chicken Fries in explaining the sales gain.
Tim Hortons’ quarter was almost as impressive, with a 5.5% systemwide increase in same-store sales. Its U.S. stores performed better (+7%) than its Canadian unit (+5.4%). A new Dark Roast coffee and dessert items such as the Creamy Chocolate Chill were strong performers. But Tim also improved its lunch menu with items such as a beefy Philly Steak Panini.
And that’s where the potential for sibling conflict arises. The more Tim Horton expands in the U.S., the more it competes with Burger King for breakfast, lunch, dinner and snack dollars. RBI can happily concede the Canadian market to Tim Hortons, which has 3,819 stores there while Burger King has less than 300. But in the U.S., there are 892 Tim Hortons and RBI wants more. It recently opened its first store in St. Louis, so it’s no longer just hugging the U.S./Canadian border. The more it expands, the more customers will be asked to choose between a Whopper and a panini. For now, however, RBI and its shareholders are enjoying having two strong brands.