Tim Hortons suffers from higher costs and labor shortages despite increased sales – National
Canada’s leading coffee and donut chain posted a strong spike in sales in its latest quarter, but rising commodity prices and high demand for restaurant workers threaten to slow growth as the economy slows. COVID-19 lockdowns reopened.
Tim Hortons’ parent company said Friday’s profit more than doubled in its second quarter as revenue from its brands, including Popeyes and Burger King, jumped a whopping 37 percent.
But Restaurant Brands International Inc., the fast food holding company behind the three restaurants, said inflationary pressure on goods and wages could challenge recovery from the pandemic.
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“The restaurant industry, like many other industries, is facing rising commodity costs and wage inflation,” Restaurant Brands CEO Jose Cil said during a conference call with analysts.
“Staffing remains a challenge,” he said. “While the situation evolves daily, we work closely with our franchisees to provide tools and share best practices, including recruiting and hiring initiatives, employee retention programs and technologies that simplify the hiring process.”
The company is also planning a national media campaign to help support recruitment efforts in Canada, Cil said.
Restaurant Brands corporate director Duncan Fulton said labor shortages are emerging at the company’s restaurants globally, including in Canada.
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In addition to a national hiring campaign to be launched in the coming weeks, he said the company is working with governments to shed light on the urgent need for more labor, including access to temporary foreign workers.
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“We are seeing a widespread labor shortage in the restaurant industry in general and the owners of Tim Hortons are working on that just like any other restaurant,” Fulton said in an interview.
“A lot of our franchisees are working pretty long shifts in restaurants to work the drive-thrus, help customers and help fill the (scheduling) gaps.”
As for whether the restaurant will raise wages to attract more workers, he said franchisees currently offer competitive wages.
“From a wage rate standpoint, it’s a very competitive market,” Fulton said, noting that the same pool of labor available to Tim Hortons could also work for other restaurants and retailers, keeping wages competitive.
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Meanwhile, when it comes to the rising cost of products like coffee beans, Restaurant Brands has “advanced sourcing and sourcing mechanisms” that help smooth the ups and downs of the commodity market, he said.
“We have a fairly advanced system for obtaining coffee beans,” Fulton said. “As we see future coffee prices go up and down, it gives our team the ability to adjust and smooth out some of the shocks.”
For now, Tim Hortons isn’t planning any sweeping menu price hikes to address cost pressures.
“There is nothing planned on a large scale at the moment,” Fulton said. “There is always a type of market-by-market microadjustment that is in line with our competitors.”
He added: “We are very careful when there is a price adjustment to make sure it is competitive and meets guest expectations.”
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Restaurant Brands, which reports in US dollars, said its net income attributable to shareholders was $ 390 million or 84 cents a share in the second quarter, up from $ 163 million or 35 cents a share a year earlier.
Adjusted earnings reached $ 358 million or 77 cents a share, compared to $ 154 million or 33 cents a share in the second quarter of 2020.
Revenue was $ 1.44 billion, up from $ 1.05 billion in the prior-year quarter, and Tim Hortons’ same-store sales were up 27.6 percent a year after having decreased by 29.3 percent. Total system-wide sales were $ 8.9 billion, compared to $ 6.8 billion.
The company says sales growth across the global system was four percent higher than in 2019, before COVID-19 caused restaurant closures, while 378 net new locations were added in the first half of the year. anus.
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