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Tim Hortons restaurants are getting smaller

Tim Hortons
In Canada, more than one-third of Tim Hortons' fourth-quarter sales were digital.
  • Tim Hortons' US restaurants are getting smaller, the CEO of its parent company said Tuesday.
  • José Cil said new US restaurants have a "smaller footprint, faster build times, and an optimized menu."
  • In Canada, more than one-third of Tim Hortons' fourth-quarter sales were made digitally.

Tim Hortons' US restaurants are getting smaller.

José Cil, CEO of Tim Hortons parent company Restaurant Brands International, said in an earnings call Tuesday that new Tim Hortons restaurants in the US "leverage a smaller footprint" and "faster build times."

The new restaurants also have an "optimized menu" that focuses on "beverages, baked goods, and hot breakfast sandwiches, all leading to more compelling unit economics," Cil said, adding: "We're seeing encouraging results from these formats."

Other chains including Wingstop, Smashburger, and Burger King have been redesigning their restaurants as more customers order digitally, get their food delivered or to-go, and look for convenience and speed. Some restaurants are scrapping dining rooms altogether, focusing on drive-thrus, and pushing customers to order without speaking to staff.

Joshua Kobza, COO of RBI, said in the earnings call Tuesday that Tim Hortons was adding more order and pickup channels to its restaurant types in 2022, such as walk-up order windows, dedicated curbside pickup areas, and drive-thru conveyor systems.

More than a third of the Canadian doughnut and coffee chain's fourth-quarter sales in Canada came from digital channels, Cil said.

In total, Tim Hortons opened 342 net new restaurants in 2021, bringing its store count to 5,291. This was the highest level of unit growth since RBI acquired the brand in 2014, Cil said.

The chain also reported its highest US restaurant growth since 2016 and is expanding into new markets. It's opening its first store in Houston this summer, Cil said.

Tim Hortons' annual revenue grew 19% in 2021 compared with 2020, to $3.3 billion.

Burger King, another RBI company, is also rolling out a new restaurant design that it calls "the restaurant of tomorrow," with triple drive-thru lanes, food lockers to keep advance orders warm, and conveyor belts that deliver food to customers' cars.

Nearly 30% of Burger King restaurants in the US have now been updated with the new technology as well as the refreshed branding the chain unveiled last year, Tom Curtis, Burger King US and Canada President, said on Tuesday's earnings call.

"The path toward a fully modernized fleet of restaurants is a key part of our longer-term plan, and we're committed to doing what we need to, including making investments in both the brand and its physical assets, to get there," Curtis said.

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