OAKVILLE, Canada - In what is set to be its biggest expansion outside of its core Canadian market, the country’s coffee-and-donut chain Tim Hortons has announced plans to enter China.
The fast-food company, Restaurant Brands International, which continues to battle a slump in popularity and sales at home, has announced that it is planning to open 1,500 outlets of Tim Hortons in China over the next decade.
The move is said to be part of the company’s plans to capitalize on a growing cafe culture in the world’s second-largest economy and comes as part of new President Alex Macedo’s two-pronged strategy.
Macedo’s strategy is aimed at battling intense competition in the fast-food industry at home and to fix the company’s bruised reputation.
Unveiling the plan at Restaurant Brands International’s Oakville, Ontario headquarters, Macedo discussed the strategy and said, “One is improving and increasing our leadership in Canada, and the second is taking a little bit of Canada to the world.”
Last year, the company marked its entry into the Philippines, Britain, Spain and Mexico markets and its move into China is set to add to Tim Hortons’ global footprint.
The company has said that the move will be part of a joint venture with private equity firm Cartesian Capital Group.
Further, Macedo revealed in an interview with Reuters that Tim Hortons will keep its beverage offering the same in China but will customize its food menu for the local market.
After becoming president in December, Macedo has focussed on stemming profit declines and sweetening customer sentiment even as it faces a bitter and public feud with a group of unhappy franchisees in Canada and the United States.
The move to China also comes at a time when experts are predicting an upswing in the country’s demand for coffee houses.
According to Statista, by 2020, China’s coffee and tea consumption is expected to climb to 750,218 metric tons, from 693,748 in 2015.
Further, research firm Mintel has revealed that Shanghai alone has an estimated 6,500 coffee houses, with small chains, independent stores and bakeries battling for a slice of a market that could grow to 79 billion yuan ($11.84 billion) by 2022 from 60 billion yuan this year.
Tim Hortons, which has 4,256 locations across Canada, has operated in the U.S. since 1984 and currently has 725 outlets in the U.S..
It has also operated in the United Arab Emirates since 2011 and has between five and 20 outlets in the countries it entered last year.