Have you been to Tim Hortons this week? You may have noticed that Tim Hortons applied a 10- to 20-cent price hike to some of its baked goods, sandwiches and other food items. Coffee is not expected to be affected.
It wasn’t too long ago that Tim Hortons announced a price increase to most of its products in both 2009 and 2011, including its coffee and doughnuts. The Canadian coffee giant introduced the hikes due to higher operational costs (a higher minimum wage) and food prices.
Also citing again higher operational costs and inflation, Tim Hortons introduced higher prices on some of its baked goods and sandwiches this week. Tea biscuits are now 95 cents, muffins have jumped five cents and its sandwiches will be an extra dime. The company has not officially announced or commented on the jump in prices, but a report indicated it would be rolled out throughout the month.
Coffee products and doughnuts are not expected to be affected.
Credit Suisse analyst David Hartley told the Vancouver Sun that Tim Hortons is also scheduled to introduce new square sandwich products and begin to serve its successful panini sandwiches in Canada, which has received rave reviews in testing markets.
“We expect the new products could carry a higher margin [as percentage of sales], but could prove to be cannibalistic to higher-priced products - not so good for royalties,” the analyst noted in the report.
The coffee chain maintains about three-quarters of the baked goods and coffee market in the country. Tim Hortons maintains more than 4,000 restaurants, including 3,315 in Canada, six in the Gulf Cooperation Council and 721 in the United States, with more than 100,000 employees.
More to come...