By Claire Ferris-Lay
Canada's largest restaurant chain set to open four more UAE stores by year-end
Tim Hortons, Canada’s largest restaurant chain, plans to open 120 stores in the GCC within the next five years, the CEO of its local franchise partner, Apparel Group, has said.
The coffee shop chain, which opened its first restaurant in Dubai in September, will open four new restaurants in the UAE before the end of 2011.
“With the growth in Canadian expatriates and the number of travellers who now visit the country, we know the popularity of the brand will grow here,” Nilesh Ved, chairman and CEO of Apparel Group, said in a statement.
UAE branches will include Deira City Centre, Dubai Outlet Mall and Mushrif Mall in Abu Dhabi. The brand is also in talks with other mall operators for further expansion, David Roy, managing director for international operations for Tim Hortons said.
“We’re certainly pleased with the initial guest reaction [in the first store], particularly during the weekends when it’s been very busy with families,” he said.
“We don’t have a specific timeframes for the other markets yet but certainly our focus will be on the UAE,” he added.
Tim Hortons, named after the hockey player who founded the brand in 1964, is something of an institution in Canada with more than 3,600 outlets worldwide. In its home market the brand has a 40 percent market share of all quick service restaurants and serves up to two billion cups of coffee every year.
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 region.
The first UAE branch of Tim Hortons in Downtown Dubai was mobbed by Canadians before it even opened last month.
“I went there when it first opened and there were these queues coming out the door and they were all Canadians so it’s actually bringing all of these Canadians together. It even tastes the same, it tastes like home,” said Canadian expat Heather Chuter.
“I think it’s reminiscent of routine for us, it’s a part of a daily routine so you go in the morning, or for lunch, it’s something that joints people together,” said Canadian Nicole Rogers. “It really is something people go quite crazy for; there was even one in Kandahar at the military base,” she added.
Tim Hortons in August reported a 1.5 percent increase in profit as it passed on higher coffee costs to customers and saw its US sales increase. The chain, which has previously struggled to replicate its success in the US, said sales in the US increased 6.6 percent and 3.8 percent in Canada.
120 locations in 5 years will never happen unless they accept "B" and "C" real estate locations just to open units. Dubai Outlet Mall is at best a "C" location which will probably not be profitable. There are a few of these types of locations available right now (Uptown Mirdif, Arabian Centre, Green Community, Festival City) if they just need locations regardless of sales & profit potential. The coffee segment is saturated with brands like Starbucks and Costa dominating the market. Second tier players like Second Cup, Coffee Bean & Tea Leaf, Caffe Nero, Gloria Jeans, Caribou Coffee, etc. are all fighting for the same "A" real estate. 120 locations through 2016 is an average of almost 2 a month every month until the end of 2016. This is an ambitious and probably unrealistic plan...
I'm curious about several things not addressed in the story. One: How the food and drinks compare in price and quality to what's available right next door--at Starbucks--and at the many other Western coffee and food chains now in the UAE. Two: Whether this location is attracting local patronage--or just expatriate Canadians? Three: Whether the opening crowds are simply a normal flurry of activity surrounding a "Grand Opening" or whether there is repeat patronage, with local people (not just expats) making this store part of their routine.
This is just the begining, I'm sure Tims will write history in this region,they have the best coffee and tim bits anyone had, I live very close to this new location and have seen how fast and good this store has comeup,wonder who has done this store that fast..... the day signs were up I was curious enough to find what they offer and pricing...to my surprice they are priced much better then most of all in this region......my best wishes to all.
There are several major differences between the target market of Tim Horton's and that of Starbucks. For what it's worth, both are well represented in Canada. In the home market (N. America) Tim's is perceived and branded as a coffee shop, casual dining experience - as opposed to SBux, which is a faster paced cafe experience. Different clientele, different tastes. It will be interesting to follow the Timmie's story as it spreads into the GCC.
They are talking about 120 stores across GCC not just Dubai!!!!
I understand this is a GCC deal, but my original comment stands. I am well aware of the F&B business in Kuwait, Saudi, Egypt, etc. Starbucks & Costa are the dominant players. Starbucks has over 350 locations throughout the Middle East and North Africa. This expansion has taken them I believe 11 or 12 years to achieve and Al Shaya is the #1 retailer in the Middle East. Most of the other brands I mentioned have established locations in the GCC. Tim Horton's will face a struggle to secure "A" real estate because it is not available. In order to achieve 120 units in 5 years Tim Horton's will have to compromise on real estate or open kiosk units which offer low sales and low profit potential. I don't believe 120 units in 5 years is a realistic goal. Maybe in 8 to 10 years but 5 is a serious challenge.