Tim Hortons, with its 600 U.S. doughnuts-and-more locations, is now the second-fastest-growing chain in the U.S., according to a report by TheStreet.com.
While Tim Hortons opened its first U.S. location in Buffalo in 1985, recent efforts led by David Clanachan — who was named chief operations officer, U.S. and international, in May 2008 — have helped the chain expand in traditional markets such as western New York, Ohio and Michigan, as well as into Manhattan, on base at Fort Knox in Kentucky and Naval Station Norfolk in Virginia, and throughout various sporting venues in cold-weather cities.
This growth has boosted Tim Hortons’ market cap to nearly $6.6 billion, making it the fourth-largest publicly traded restaurant chain behind Starbucks Corp. ($23 billion), Yum Brands Inc. (also at $23 billion), and McDonalds Corp. ($83 billion), the report stated.
And Tim Hortons is planning continued U.S. expansion. The company intends to add another 300 U.S. locations in the next three years, as well as expand its cafe-based concept stores beyond trial locations in Ohio, and enhance its commercial offerings in grocery stores and online.
Below are excerpts from TheStreet’s recent interview with Clanachan:
Tim Horton’s U.S. expansion plans call for 300 more stores over the next three years, with 70 percent growth in existing markets and 30 percent in “contiguous markets.” How has Tim Horton’s approached those contiguous markets before, and have the Cold Stone Creamery partnership and embrace of nontraditional locations such as hospitals and military bases helped your cause?
Clanachan: “Absolutely. If you look at our plans, we’re firmly entrenched in building those stores over the next three years through that strategic plan. We think that there’s a number of different ways to do it through the non-traditional locations like hospitals, universities, college campuses, sports stadiums, those types of things, as well as traditional stores and being able to do it with or without our Cold Stone partners.
As we go into markets that are adjacent to markets that we’re already in, there already is a bit of a brand presence starting to be established. It’s not as simple, because the whole Designated Marketing Area approach to marketing in the U.S. is somewhat complex compared to the rest of the world, but that brand awareness is there because, in that non-traditional audience, people travel around quite a bit, so it gives you that exposure.”
Your company has already established a sponsor presence in the U.S. through partnerships with the NHL’s Buffalo Sabres, Detroit Red Wings and Columbus Blue Jackets, the NBA’s Detroit Pistons, the NFL’s Buffalo Bills and the University of Michigan football team. How do sports sponsorships factor into expansion plans, and how does recent expansion into traditional, cold-weather hockey markets in Pittsburgh and Long Island benefit a company inherently tied to NHL hockey?
Clanachan: “The whole sports thing plays into our culture of what we’ve done for years through kids sports. More importantly, as we go into new markets and as we develop our brands in the U.S., partnering with local professional sports teams or teams on any level within the community is a big deal.
Read more at: The Street.com