Newspaper article The Canadian Press

Incoming Tim Hortons CEO Reviewing Everything from Coffee Cups to Doughnuts

Newspaper article The Canadian Press

Incoming Tim Hortons CEO Reviewing Everything from Coffee Cups to Doughnuts

Article excerpt

Tim Hortons CEO looks for changes

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OAKVILLE, Ont. - Everything from coffee cup sizes to doughnut selection is under the microscope at Tim Hortons (TSX:THI) as the company's new chief executive settles into his role and begins a widespread review of the chain's operations.

Marc Caira is looking for ways to boost the reputation of the already iconic company, and he wants to improve how customers feel about their experience at the counter, which he calls "the moment of truth" for any quick service restaurant.

"If you make a mistake there, then you're impacting the consumer, and today's new reality is you can't afford to do that," he said in a recent interview at the company's headquarters in Oakville, Ont.

"You cannot give consumers permission to go somewhere else."

Before he joined Tim Hortons, Caira held various executive roles at Nestle's global operations where he helped expand the company's hot and cold beverage division. He says his experience with Nestle means he comes to Tim Hortons with an open mind and thinking like a customer.

"The beauty of my role is that I can ask as many questions as I want," he said.

Hardly two and half months into his tenure at the Canadian chain, Caira is still learning how Tim Hortons operates. So far, he has travelled to more than 20 cities across the country to talk with franchisees, and he's been catching up on how the 49-year-old company has evolved.

His office smells of a fresh coat of paint and new leather chairs, and hints of his roots at Nestle are scattered around the room. A collection of KitKat chocolate bars behind his desk are branded with his image, a personalized option for the Japanese market.

In his new role, that type of creative quirk could come in handy. Tim Hortons has faced an onslaught of competition from coffee chains like Starbucks and fast food restaurants like McDonalds, who have offered deep discounts to their customers along with loyalty programs.

While Tim Hortons still dominates Canada's coffee market, the company has weathered uneven same-store sales growth this year, and expects to fall short of its target ranges.

Overall same-store sales, a retail industry barometer, have improved somewhat, rising 1.5 per cent in the second quarter. Yet the numbers suggest that fewer customers are coming through the doors and overall they're spending less money. Tim Hortons does not provide specific traffic data.

A study from the NPD research group found that Tim Hortons' share of the $4.6-billion coffee chain market fell to about 76 per cent in May, a decline of about two per cent from 2009 before McDonalds launched its McCafes.

At least part of the difficult market can be attributed to slower economic growth and reduced spending by many Canadians in a fickle market. Caira wants to ensure that customers don't walk out of his stores baffled by a complicated menu or feel like they've waited in line too long.

"Future battles are not going to be won, in my view, with who has the best strategy or who has the best innovation," he said.

"The companies that will win will be the companies that can execute flawlessly at the store level."

While nothing has been decided yet, changes will likely involve simplifying the company's menu, which at this point includes a rotating selection of more than 60 types of doughnuts, and no less than five different coffee cup sizes. …

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