BUSINESS

Tim Hortons CEO: Company Must Succeed In U.S. As Growth In Canada Stays Slow

09/17/2013 01:30 EDT
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Marc Caira, president and chief executive officer of Tim Hortons Inc., stands for a photograph after an interview at a Tim Horton's restaurant in Oakville, Ontario, Canada, on Monday, Sept. 16, 2013. Caira said Canadas largest coffee and doughnuts chain must succeed in the U.S. as competition brings slower growth at home. Photographer: Brent Lewin/Bloomberg via Getty Images

A little more than two months on the job and the CEO of Tim Hortons is already asking dangerous questions.

Marc Caira, who took over former CEO Paul House in July, told Bloomberg his chain can extract more revenue from slapping its brand on consumer products sold in stores and malls.

"Why can’t you have Tim Hortons in vending machines?” he asked.

Such tactics could yield incremental revenue increases, he said, as the company continues its battle for coffee supremacy in Canada.

But Caira says the company's real war for the wild west of donuts and coffee is in the U.S., since competition in Canada has led to "lower growth" and "more competitive intensity."

"I have said that I’m not happy with our performance in the U.S. We tried to replicate the success we had in Canada in the U.S., and the U.S. is a different, unique market," Caira told the Wall Street Journal.

To tackle this unique market, Caira says the company is sticking to its "capital light" strategy, a plan criticized for its lack of significant returns on the $664 million the company has invested in the U.S. in the last 10 years, according to Bloomberg. The plan involves financial investments that are smaller and more targeted towards partners and franchisees with connections to specific communities, media and real estate.

"The important thing for me is aligning with the right partners," he said.

But in Canada, brewing competition from McDonald's and Starbucks means the company must do more to hold its territory, not just revenue-wise, but physically as the competition continues to sprawl across the country.

Caira told the Globe and Mail that while the chain is still "best in class," it could offer more stand-out products, cater to younger customers, and up its branding and marketing to stay competitive.

Speed helps, too.

“Our lineups are too long,” Caira said. “As a result, our people are much busier in the back. When our people are much busier, sometimes the order accuracy is not what it should be.”

He also hinted at the chain entering the dinner market, but didn't elaborate on what the menu might include.

Still, while Caira says there is plenty that can be done to stay competitive in Canada, he maintains that “there’s nothing here that really needs to be fixed."

"Tim Hortons can evolve. We don’t have to revolutionize anything here."

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