Tim Hortons eyes military bases in GCC expansion spree

Tim Hortons, Canada’s largest restaurant chain, may open outlets in military bases under a plan to roll out 120 stores in the GCC over the next five years, the company’s chairman said Tuesday.

Canada opened a military base in Kuwait in September, almost a year after the country’s supply post in the UAE was closed following a diplomatic spat between the two nations.

“We have a great relationship with the armed forces and we have a lot of outlets in their bases,” said Paul House, executive chairman of Tim Hortons.  “It depends on how many troops there are [in Kuwait]. But we would be open to wherever [Canadian troops] have a campaign.”

Tim Hortons, which operates more than 3,600 stores in Canada and the US, kicked off its Gulf expansion spree with the launch of its first regional store in Dubai in September. The restaurant chain will open four further outlets in the emirate this week, with local franchisee Apparel Group, before spanning out across the GCC.

“This is our first real international market and we will be focused on this for the next 24 months. We are focused on making sure our partner is successful,” said David Clanachan, COO of Tim Hortons, US and International operations.

“We have opened the first five stores [this week] in Dubai and Abu Dhabi. We have sites under construction in Sharjah, Fujairah City Centre, in Muscat, Oman and in Qatar.”

The chain has no immediate plans to expand into Saudi Arabia, the GCC’s wealthiest economy, but may look to launch in the kingdom if its UAE rollout proves successful.  

“We have not done anything in Saudi and really we see that as a phase two market as it is a much bigger market,” said Clanachan. “We see opportunities there but it is potentially phase two once we have established the brand here.”

The UAE is home to an estimated 27,000 Canadian expatriates and the Gulf state is Canada’s largest trade partner in the Middle East and North Africa.

Tim Hortons reported a 40 percent rise in third quarter profits in November, despite increased competition in the company’s core coffee business.

The company earned C$103.6m ($101.7m) in the third quarter, up from C$73.8m a year earlier. Revenue rose more than 8 percent to C$726.9m.

Sales at stores open at least 13 months, a key measure for retailers, rose 6.3 percent in the United States and 4.7 percent in Canada, home to the bulk of its operations.